- Underlying pretax loss of 171.3 mln stg in 2021
- Net interest margin of 1.4% vs 1.22%
- RBC analysts expect break-even between 2023-24
Metro Bank said on Wednesday that its annual loss was down 5.3 million pounds (7.2 million) to resolve an investigation by the UK's financial regulator into the business forecast for 2019.
The London-based bank expressed its concern about its future owing to increased energy costs, tax increases, and inflation.
It refused to provide long-term guidance, but its stocks rose nearly 3% following results which showed net interest margin, a key measure of profitability, increased to 1.4 percent from 1.22% last year. It wants to further benefit from rising interest rates.
Metro Bank, which was the first lender to receive a high-street banking licence in Britain in 150 years in 2010, was had to be cleared two years after an accounting incident in 2019 weighed on its shares and prompted investigation by UK authorities.
According to media sources, a resolution of the Financial Conduct Authority's investigation into the accounting issues was "closer" than previously thought, allowing the company to make the provision.
On Wednesday, the lender said it was closing three branches: Earl's Court, Milton Keynes Midsummer, and Windsor.
Metro had been fined in December, after declaring that the company provided a misleading picture of its regulatory capital in regulatory returns between May 2016 and January 2019.
The lender has launched a turnaround strategy focusing on costs control, revenue, and margin growth, among others.
For the fiscal year ended December 31, Metro reported a preliminary pretax loss of 171.3 million pounds ($232.9 million) comparativement to a 271.8 million loss the previous year.
Frumkin has declined to provide a list of the returns that the company may return to profitability.
Metro will break even at some point between 2023 and 2024, according to RBC Capital.
Loans increased by 2% to 12.29 billion pounds for the year, while deposits increased by 2% to 16.45 billion pounds.
($1 = 0.7356 pounds)