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Metro Bank loan book drops but pleased with improved lending mix

(Alliance News) - Metro Bank PLC on Wednesday reported an improvement in its lending mix in the ...

Alliance News 20 October, 2021 | 10:37AM
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(Alliance News) - Metro Bank PLC on Wednesday reported an improvement in its lending mix in the third quarter, but saw its loan book fall.

At September 30, the challenger bank's loan book stood at GBP12.32 billion, down slightly from GBP12.33 billion three months earlier, and down 18% from GBP15.09 billion at the same point the year before.

"Third quarter total net loans of were broadly flat and reflected growth in consumer unsecured lending and specialist mortgages, offset by the attrition of lower-yielding residential mortgages and commercial term loans including the initial repayment of Bounce Back Loan Scheme," Metro said.

"Front-book yield continued to improve benefiting from the mix shift towards higher-yielding lending categories, partially offset by pricing pressures in the mortgage market. Credit impairments were benign, in line with guidance provided at the half year," the lender continued.

Deposits stood at GBP16.41 billion on September 30, down slightly from GBP16.62 billion at June 30, but up from GBP15.62 billion the year before.

Chief Executive Daniel Frumkin said: "The bank has continued to deliver against its strategic priorities during the quarter. We have seen improvements in our lending mix from our expanded product offering. We are seeing signs of a gradual return to normality and have adopted a hybrid way of working for office-based colleagues. We remain focused on executing on our plans and returning the Bank to sustainable profitable growth."

Metro's minimum requirement for own funds & eligible liabilities, MREL, currently exceeds its requirement of 20.5%. MREL is an EU banking regulatory requirement for lenders to maintain equity and eligible debt should it require a bail out. The bank said it is "comfortable" operating within these buffers.

Shares in Metro Bank were 0.8% lower in London on Wednesday at 115.50 pence each.

By Paul McGowan; paulmcgowan@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Metro Bank PLC 97.00 -

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