Metro Bank has enjoyed an excellent H1 by all metrics.

At the same time, Metro Bank has successfully raised £303m via a new share placing at no discount to last night’s closing price of £34.22 per share, to boost further expansion.

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In the six months to end June, Metro Bank reported underlying profit before tax of £24.1m, a four-fold increase from £6.0m in the year ago period.

Metro Bank H1 highlights included:

  • Deposits soared by 40% year-on-year to £13.7bn;
  • A key Metro Bank measure – net deposit growth per store per month of £6.2m in H1, equivalent to annualised deposit growth per store of £74m;
  • Loans rose by 55% y-o-y to £12.0bn; the resultant loans-to-deposit ratio of 87% is within Metro Bank’s 2020-2023 target range, and
  • Customer numbers rose by almost 17% from 1.22m to 1.42m.

Total assets rose by 46% y-o-y to £19.1bn.

Metro Bank H1: current accounts growth

Continued growth in current accounts, largely non-interest bearing now comprises 31% of total deposits. Online current account opening has complemented the store network.

Vernon Hill, Chairman and Founder at Metro Bank, said:

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“From a standing start of literally zero, we have won over 1.4 million customer accounts from the big banks, proving British consumers and businesses are turning their backs on poor customer experience and demanding more. Our blend of service, convenience and award winning technology is not just attracting new customers in London and the South, it is helping to make us famous across the UK.

“The Revolution goes from strength to strength.”

Hill told RBI that Metro Bank is on target to end 2018 with around 68 stores, up from its current 57.

Openings this year include stores in Cardiff and Bristol. In 2019, store openings are planned for the Birmingham while 2020 plans include expansion north to the York, Manchester and Liverpool corridor.

The successful shares placement delivers a total capital ratio of 16.2% as at end June in excess of its current regulatory minimum of 12.1%.

In a note to clients, analyst Ian Gordon at Investec said:

” We applaud management’s decision to raise equity capital now to support Metro’s exceptional  pace of loans growth.

“This was the right thing to do. Metro Bank is a unique story with extremely rapid balance sheet growth which is driving improving operational leverage and profitability. We forecast that ROTE will rise from 1.3% in 2017 to 19.1% by 2023.”