Metro Bank warns over more job cuts and will end seven-day trading in branches
The troubled lender is already axing 22% of its workforce and expects more jobs to go, while the bulk of its branches will only open Monday to Friday.
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Metro Bank has confirmed it is axing around 1,000 jobs and warned over further staff cuts as part of an overhaul that will also see branches no longer open seven days a week.
The troubled high street lender said previously announced plans to cut annual costs by £50 million was seeing it shed around 22% of its 4,266-strong workforce by mid-April – higher than the originally expected 20%.
It said it was looking to cut another £30 million by the end of 2024, which chief executive Daniel Frumkin cautioned would “inevitably” lead to more jobs going.
He also said that from March 29, all 76 stores will no longer open on Sundays or bank holidays and opening hours will be cut following a review launched last autumn.
The group said that the bulk of its branches – 44 sites – will only be open five days a week, from Monday to Friday, 9.30am to 5pm.
The remaining 32 stores will be open six days a week, from 9.30am to 5pm on Monday to Friday, and 11am to 4pm on Saturdays.
Metro Bank branches are currently open from 8.30am until 6pm from Monday to Saturday and 11am to 5pm on Sunday.
But Metro Bank said it would not close any of its branches under the overhaul, with plans to open at least another 11 sites, mainly across the North of England.
Mr Frumkin said despite rowing back on its seven-days-a-week trading, it would “still be open more hours than other competitors on the high street”.
On the extra cost savings, he said not all of it would come from additional job losses, but said “inevitably some will have to come from colleague costs”.
Details of the overhaul came as it reported a £16.9 million underlying loss for 2023, narrowed from losses of £50.6 million in 2022.
On a statutory basis, the group said it returned to profit for the first time since 2018, with pre-tax profits of £30.5 million.
The plans to end its seven-days-a-week and extended hours service marks a key climb-down over aims to focus on high street banking.
We expect the fourth quarter of 2024 to be better than the first quarter and we expect the momentum coming out of 2024 to allow us to make money in 2025
The lender was set up in 2010 as a challenger to the regular banks, with the longer opening hours forming a major plank of its strategy.
Metro Bank launched its cost-cutting plan last November after Metro Bank shareholders approved a funding package worth £925 million to secure its future on Britain’s high streets.
Shareholders gave the green light to a capital fundraise which saw Colombian billionaire Jaime Gilinski Bacal become a majority shareholder in the group with a 53% stake.
Mr Gilinski Bacal appointed himself to the Metro Bank board as a non-executive director in January.
Mr Frumkin said the group saw “significant” outflows of cash from worried customers amid fears over its future last October, when reports emerged that the bank was taking action to shore up its finances, but he declined to give details of how much money was withdrawn.
Metro Bank had since launched a campaign to attract new deposits at attractive rates to help boost its customer numbers, but Mr Frumkin admitted it had been “too successful”, leaving the group with savings customers on unsustainably high interest rates.
It said savings deposits grew 1% to £15.6 billion in the final six months of 2023 alone, which had increased further to £16.5 billion by the end of February, marking the second highest level ever achieved by the bank.
The group also opened a record 246,000 accounts in 2023 and more than 52,000 of those were in the fourth quarter.
But it cautioned that turnaround actions will have an impact on results in 2024 and said it may have to shrink its deposit base to improve its banking margins.
Mr Frumkin said the group was not set to return to profitability until 2025.
“We expect the fourth quarter of 2024 to be better than the first quarter and we expect the momentum coming out of 2024 to allow us to make money in 2025,” he said.