Metro Bank posts record revenue growth as cost-cutting continues

Metro Bank has reported record revenue growth after benefiting from higher interest on customer loans so far this year.

The bank said its revenue grew by 31% to £236.2 million in the six months to June 30, compared with £179.8 million in the same period last year.

It also saw pre-tax losses more than halve, totalling £60.2 million compared with £138.9 million last year.

Chief executive Daniel Frumkin said the bank’s cost-cutting efforts means it expects to reach monthly breakeven next year.

“We have delivered a strong first-half performance and I am encouraged by the continued momentum we are seeing across the bank,” he said.

“Initiatives we have put in place have helped us to improve net interest margin and lending yield, and drive record revenue growth.

“We have also maintained our cost discipline and improved our cost-to-income ratio, with the focus on generating greater earnings from our capital base.

“As a result, we have built a sustainable business and we now expect to reach monthly breakeven during Q1 2023.”

Recognising a cautious macroeconomic outlook, the bank put its expected credit loss expense at £17.9 million, a much higher figure than the £7.8 million put aside in the second half of last year.

But the lender said the credit performance of its lending portfolio remained stable this year with non-performing loans and arrears both reducing, despite the worsening cost of living.

Last year, Metro Bank was fined by the Central Bank’s Prudential Regulation Authority (PRA) over failings relating to its reporting and governance between May 2016 and January 2019.