Metro Bank has slashed expansion plans after a “challenging year”, which saw it post heavy losses following an accounting scandal that crushed its stock, forced bosses to quit and led some customers to shut accounts.
The UK challenger bank posted a £130.8m pre-tax loss last year, compared to £40.6m pre-tax profit in 2018. Deposits fell by 8% to £14.48bn.
“Our financial performance reflects a very challenging year for Metro Bank,” said chief executive Dan Frumkin.
The lender, founded in 2010 to offer competition against the UK’s Big four high street banks, will slash new branch openings to 24 over the next three years from a planned 71.
Metro will also hand £50m of a £120m award it received last year from the Banking Competition Remedies (BCR) fund, which is meant to boost competition in the business banking, and will pay a £340,000 penalty for falling short on its commitments. The BCR was set up with £775m cash from the Royal Bank of Scotland and is part of European Union conditions attached to the £45bn government bailout of the high street bank at the height of the financial crisis a decade ago.
Doubts over independence
Metro’s share price fell 19% to an all-time low of 155p in morning trading. Two years ago the shares traded at more than £40.
Last year, it was also the subject of two regulatory inquiries, plus a class-action lawsuit, and it had to offer new investors a very expensive 9% return to stump up the £375m in extra cash to survive.
Metro still faces regulatory probes after it classified £900m of loans as less risky than they were last year. Its then chief executive Craig Donaldson and founder and chairman Vernon Hill have since left the bank, which was once regarded as one of the best run of the challenger banks that sprung up in the wake of the 2008 financial crisis to freshen up competition.
The lender also took a £27m hit to cover the costs of that investigation and a review of its compliance controls, having also breached US sanctions in Iran and Cuba between 2017 and 2019. It also took a £68m charge after scrapping old IT projects that it said were no longer part of its strategy.
City rumours speculate that the weakened bank could be sold to opportunistic investors, or swallowed up by a larger rival. However, Frumkin said: “There’s nobody actively marketing the place for sale.”
Trusted & Regulated Stock & CFD Brokers
What we like
- 0% Fees on Stocks
- 5000+ Stocks, ETFs and other Markets
- Accepts Paypal Deposits
Min Deposit
$200
Charge per Trade
Zero Commission on real stocks
64 traders signed up today
Visit Now67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Available Assets
- Total Number of Stocks & Shares5000+
- US Stocks
- German Stocks
- UK Stocks
- European
- ETF Stocks
- IPO
- Funds
- Bonds
- Options
- Futures
- CFDs
- Crypto
Charge per Trade
- FTSE 100 Zero Commission
- NASDAQ Zero Commission
- DAX Zero Commission
- Facebook Zero Commission
- Alphabet Zero Commission
- Tesla Zero Commission
- Apple Zero Commission
- Microsoft Zero Commission
Deposit Method
- Wire Transfer
- Credit Cards
- Bank Account
- Paypall
- Skrill
- Neteller
What we like
- Sign up today and get $5 free
- Fractals Available
- Paypal Available
Min Deposit
$0
Charge per Trade
$1 to $9 PCM
Visit Now
Investing in financial markets carries risk, you have the potential to lose your total investment.
Available Assets
- Total Number of Shares999
- US Stocks
- German Stocks
- UK Stocks
- European Stocks
- EFTs
- IPOs
- Funds
- Bonds
- Options
- Futures
- CFDs
- Crypto
Charge per Trade
- FTSE 100 $1 - $9 per month
- NASDAQ $1 - $9 per month
- DAX $1 - $9 per month
- Facebook $1 - $9 per month
- Alphabet $1 - $9 per month
- Telsa $1 - $9 per month
- Apple $1 - $9 per month
- Microsoft $1 - $9 per month
Deposit Method
- Wire Transfer
- Credit Cards
- Bank Account
Share
Ali Raza
