Metro Bank swings to profit as customer accounts pass one million

Challenger bank Metro reported its results for the first half of 2017 after the close on Tuesday, swinging to a profit for the first time since its stock market debut in March of last year.

Metro Bank's underlying profits between January and June came in at £6m, in comparison with a £13m loss during the first two quarters of last year.

Pre-tax profit for the second quarter came in at £4m, up from £2m in the first quarter. The strong performance was based on strong organic lending, with its loan to deposit ratio increasing to 79%.

Having debuted on the London Stock Exchange just last March and only been in existence for the last seven years, the bank has also now surpassed one million customer accounts.

Metro also announced it was planning to open as many as 10 new branches before the end of the year in order to expand its coverage.

"Almost seven years in and the Metro Bank story just gets better and better,” said chairman and founder of Metro Bank, Vernon Hill.

“Our ability to meet the banking needs of business, commercial and retail customers in and outside London is proving to be an attractive proposition for British consumers and businesses alike. In the last six months alone we have opened a further 130,000 accounts.”

Metro also announced the placing of new ordinary shares with the aim of raising £278m in capital, with more than 8m shares being introduced to market at Tuesday’s closing price of 3465p.

Despite the bank’s swing to profit, analysts at Goldman Sachs still rate the company as ‘sell’, with a 12-month target price of 2580p, well below its current level.

At 0947 BST, the shares were up 2.1% to 3,568.65p.