Metro Bank losses hit £245m as lender reels from fines and sanctions
The high street lender was fined by the Bank of England and faces a Financial Conduct Authority investigation.
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Your support makes all the difference.Metro Bank suffered a heavy loss last year as the high street lender put aside cash to cover fines imposed on it by UK regulators and over historical global sanctions.
The bank said pre-tax losses for 2021 hit £245.1 million, which was an improvement on the £311.4 million loss a year earlier due to Covid-19.
But it failed to match its rivals, which have reported huge boosts in profits as they benefit from the recovering economy.
Metro Bank said it has improved its lending mix and maximised its risk-adjusted returns on capital.
Bosses added that they have put in place cost-cutting measures and controls to improve the institution, and remain on track to reach a break-even position – although it is unclear exactly when that will be.
An investigation by the Financial Conduct Authority (FCA) is continuing, but the bank has put aside £5.3 million for any potential fine.
Its losses were also attributed to a £5.4 million fine by the Bank of England and a further £35.2 million has been put aside for historical sanctions costs.
Last year, the Central Bank’s Prudential Regulation Authority (PRA) fined Metro Bank over failings between May 2016 and January 2019 relating to its reporting and governance failures.
These costs are likely to fall away in the coming year, the bank added.
A further £24.7 million was spent closing three branches – in London’s Earl’s Court, one in Milton Keynes and the Windsor branch – although a new one was opened in Bradford and a further site will launch in Leicester.
We're completely committed to the high street and we're completely committed to opening more stores
Chief executive Daniel Frumkin said the store closures were necessary because customer levels were too low in those areas.
“We’re completely committed to the high street and we’re completely committed to opening more stores,” he said.
“These three store closures for us were for very specific issues.
“At Earl’s Court, the reality is nobody walks around there.”
He added: “In Windsor, if you look at the footfall you’d think there are lots of people, but … it’s lots of people who sound like me (tourists), so it’s not a great location.
“When you look at Milton Keynes, I think just one store makes a tonne of sense.”
Total underlying revenues rose 17% to £397.9 million, with deposits up £370 million to £16.5 billion.
Metro Bank signed up 300,000 new customers and now has 2.5 million.
Total net loans were £12.3 billion, up 2% on the year, although commercial loans – excluding Government support loans – fell 13% to £3.2 billion.