Metro Bank reports pre-tax loss of £131m
The drop, from a £40m profit in 2018, is down to 2019 being a ‘challenging year’ said new CEO
Metro Bank is to cut costs and scale back its new branch openings after it posted a £130.8m (€154.5m, $169.1) pre-tax loss in 2019. This compared to a pre-tax profit of £40.6m the previous year.
The loss was down to accounting irregularities; the UK high street bank had under-reported its exposure to higher-risk loans by almost £1bn. As a result it faced two regulatory inquiries that saw its share price drop 90 per cent. Deposits shrank and it had to offer new investors a 9 per cent return to attract the deposits it needed to survive, reports the BBC.
When one-off costs are stripped out, Metro Bank is still losing money. It reported underlying pre-tax losses of £11.7m against profits of £50m in 2018.
New CEO Dan Frumkin said the 71 new branches planned over the next three years would be reduced to 24. Other costs would be cut but there would be no forced redundancies.
“[It’s been] a very challenging year for Metro Bank,” said Frumkin, but the bank is now “on a more positive trajectory”.
There is evidence to support that. Metro Bank continues to attract retail customers – up nearly 25 per cent last year – by its seven-day-a-week opening hours. It is also targeting small businesses and said its capital ratio is also strong.
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