Metro Bank posts first annual profit

Metro Bank reported record full-year results on Wednesday, along with its first annual profit as customer accounts pushed past the 1 million mark.

In the year to 31 December 2017, deposit growth was up 47% to £11.7bn, while lending growth was up 64% to £9.6bn. The challenger bank swung to a record underlying pre-tax profit of £20.8m from a loss of £11.7m the year before, and recorded its first annual statutory pre-tax profit of £18.7m.

Underlying earnings per share rose to 18.8p from a loss of 14.7p in 2016 and customer accounts jumped a record 302,000 to 1.2m.

In addition, the bank, which refers to its customers as "fans", said that brand recognition in London has increased to a record 89% from 84% in February last year.

Chief executive Craig Donaldson said: "2017 has been a fantastic year for Metro Bank. We've reported our first full year of profitability, had continued exceptional growth in both deposits (47%) and lending (64%), and have the privilege now of looking after over one million customer accounts.

"All of this at the same time as creating a further 600 jobs, taking our total workforce to over 3,000 and winning 'Most Trusted Financial Provider' for the second year running. Metro Bank, creating fans through 'bricks and clicks', continues to be the compelling service offering for British consumers and businesses alike."

Metro expects to open 12 stores this year, expanding its network further west to Bristol and Cardiff and north to Birmingham and the Midlands, and creating 900 jobs.

The bank upped its deposit per store per month target for 2020 to a range of £5.5m to £6.5m and adjusted the store outlook from around 110 to 100. It also increased its loan to deposit ratio in 2020 to a range of 85% to 90% from around 85% to reflect the momentum of its lending and the market opportunities it sees.

Metro also introduced targets for 2023. The deposits target is between £50bn and £55bn, while the store outlook is 140 to 160, deposit growth per store per month is between £5.5m and £6.5m and the bank targets a loan to deposit ratio between 85% and 90%.