Metro Bank balance sheet weak, but loan book steadies

METRO Bank today warned that its balance sheet remains somewhat shaky and failed to update the City on whether it is presently profitable or not.

A trading update was steady overall, with the loan book rising by 2% in the last three months to £15.09 billion.

The number of borrowers deferring payments on loans fell from 16% to 3.5%.

But the capital on hand is below regulatory “requirements plus buffers” suggesting it may need to raise cash.

The bank made a loss of £240 million in the first six months of the year.

Metro said: “The bank has continued to provide support to its customers, communities and colleagues, demonstrating the critical importance of community banking to the regions we serve.”

Ian Gordon at Investec said the bank shares “remain speculative, and we do not expect it to return to profit before 2024”.

The shares rose 1p to 60.4p on relief that the statement wasn’t much worse.

There has been City gossip that a bidder might emerge perhaps from private equity. Lloyds Bank has also been a mooted suitor.

Metro Bank bought RateSetter earlier this year. Chief executive Daniel Frumkin said he is “launching new initiatives which enable us to meet more customer needs”.