Metro Bank H1 2019 results highlight the difficult year for the UK challenger lender.
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Statutory profit is down for the first half by 84% to £3.4m with underlying profit down 44% to £13.6m.
Moreover, total deposits are flat year-over-year at £13.7bn.
On the other hand, loans are up by 25% y-o-y to £15bn.
Other negative metrics include a 23 basis point drop in the net interest margin from 1.85% a year ago to 1.62%.
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By GlobalDataAnd as has been widely forecast, Metro Bank is to begin its search for an independent chair.
Founder and chair Vernon Hill will remain in post until a successor is appointed. Thereafter, Hill will remain a non-executive director and president of Metro Bank.
The founder of Commerce Bank in the US, sold in 2007 to Toronto Dominion for $8.5bn, Hill is one of the outstanding retail bankers of his generation.
Craig Donaldson, CEO, Metro Bank says: “This has been a challenging first half for the bank. Deposit outflows followed intense speculation at the time of our capital raise in May.”
Metro Bank Q2 2019: a year of transition
Adds Donaldson: “Despite this, we have delivered a resilient performance. Both personal and business current accounts are growing alongside increased revenues and fee income. Deposit growth is returning to normal in June and July to date.
“We described 2019 as a year of transition for Metro Bank. Management has continued its focus on our strategic initiatives, upgrading our cost savings guidance to the upper end of our original range, investing in additional fee service offerings and rebalancing our lending mix.”
Vernon Hill, Chairman and Founder at Metro Bank, adds: “Metro Bank continues to revolutionise the UK banking industry. We remain relentlessly focused on delivering the very best in service and convenience for our customers.”
Metro Bank has endured a torrid 2019. The trouble all started back on 23 January. An accounting error and profits warning resulted in a drop in the Metro Bank shares price from £22.00 to £13.40. In one day, it dropped 40%.
In May Metro Bank raised £375m ($477m) from shareholders amid high demand. Initially it had planned to raise £350m; indeed, there were orders for the new stock of more than double the amount raised. But that represents one of the few positives for the bank this year.
Metro Bank H1 2019: share price -72% YTD
The Metro Bank share price is down by 72% for the year to date, giving a market capitalisation of £862m.
Metro Bank did however achieve a notable double success in February. It ranked top in the CMA survey among retail current account holders for overall service and service in branches. Also in February, Metro Bank was awarded £120m – the largest share – of the Capability and Innovation fund. This is the £775m scheme funded by RBS dating back to its 2008 government bailout.
Other highlights include a rise in customer numbers from 1.42 million a year ago to 1.8 million. Metro Bank ends the first half with 67 stores open, up from 57 a year ago.
