Skip to main content

Metro Bank Holdings PLC: Interim results for half year ended 30 June 2025

6th August 2025

Interim results for half year ended 30 June 2025

Strategic actions drive strong financial performance

  • Underlying profit before tax of £45 million in H1 2025 – more than treble the profit in H2 2024
  • Revenue up 22% year-on-year to £286 million
  • Operating costs down 8% year-on-year
  • Exit Net Interest Margin at June 2025 of 2.95%, up 117 bps year-on-year
  • Exit Cost of Deposits, at 1.02%, the lowest of any UK high street bank
  • Record £1 billion of new corporate/ commercial/SME lending in H1 2025, twice the lending originated in H1 2024, with a £800 million credit approved pipeline for H2 2025
  • Future benefit expected from changes to MREL regime

Daniel Frumkin, Chief Executive Officer at Metro Bank, said:

“Metro Bank’s strong performance in the first half of the year reflects the successful execution of our strategy and decisive actions we have taken. We trebled profits, doubled new lending to corporate, commercial and SME customers, meaningfully reduced operating costs and optimised funding to have the lowest cost of deposits of any UK high street bank.”

“As we celebrate our 15-year anniversary, our unique relationship-led model, specialist lending expertise and expanding store network allows us to support customers, communities and help businesses to grow. This differentiates Metro Bank and fuels our growth.”

“Looking ahead, we have a clear path to growth, delivering mid-to-upper teens RoTE by 2027, with cost of deposits and operating costs both already below levels needed to meet 2027 targets. We are confident in reconfirming guidance, as the actions we have already taken continue to build momentum to 2027 and beyond.”

Key Financials

 

£ in millions

H1

2025

H2

2024

Change from

H2 2024

H1

2024

Change from

H1 2024

 

 

 

 

 

 

Assets

16,428

£17,582

(7%)

£21,489

(24%)

Loans

8,715

£9,013

(3%)

£11,543

(24%)

Deposits

13,363

£14,458

(8%)

£15,726

(15%)

Loan to deposit ratio

65%

62%

3pp

73%

(8pp)

 

 

 

 

 

 

CET1 capital ratio

12.8%

12.5%

30bps

12.9%

(10bps)

Total capital ratio (TCR)

18.9%

14.9%

400bps

15.0%

390bps

MREL ratio

27.0%

23.0%

400bps

22.2%

480bps

Liquidity coverage ratio

315%

337%

(22pp)

365%

(50pp)

 

 

£ in millions

H1

2025

H2

2024

Change from

H2 2024

H1

2024

Change from

H1 2024

 

 

 

 

 

 

Total underlying revenue1

£286.1

£269.5

6%

£234.0

22%

Underlying profit/(loss) before tax2

£45.1

£12.8

252%

(£26.8)

268%

Statutory profit/(loss) before tax

£43.1

(£178.6)

(124%)

(£33.5)

(>200%)

Statutory profit/(loss) after tax3

£30.4

£75.6

(60%)

(£33.1)

(>100%)

Net interest margin

2.87%

2.22%

65bps

1.64%

123bps

Lending yield

5.67%

5.48%

19bps

5.18%

49bps

Cost of deposits

1.16%

1.72%

(56bps)

2.18%

(102bps)

Cost of risk

0.14%

0.01%

13bps

0.10%

4bps

Earnings per share

4.5p

11.2p

(6.7p)

(4.9p)

9.4p

Book value per share

£2.17

£1.76

£0.41

£1.64

£0.53

Tangible net asset value per share

£1.61

£1.57

£0.04

£1.38

£0.24

 

  1. Underlying revenue excludes grant income recognised relating to the Capability & Innovation fund
  2. Underlying loss before tax is an alternative performance measure and excludes impairment and write-off of property, plant & equipment (PPE) and intangible assets, transformation costs, remediation costs, net profit/(loss) on portfolio sales and costs associated with capital raise
  3. H2 2024 profit after tax reflects recognition of Deferred Tax Asset in the period

 

Investor presentation

A presentation for investors and analysts will be held at 9AM (UK time) on 6 August 2025. The presentation will be webcast on:

https://webcast.openbriefing.com/metro-h125/ 

For those wishing to dial-in:

From the UK dial: +44 800 189 0158

From the US dial: +1 855 979 6654

Access code: 289883

Other global dial-in numbers: https://www.netroadshow.com/events/global-numbers?confId=67110

 

Financial performance for the half year ended 30 June 2025

Deposits

£ in millions

H1

2025

H2

2024

Change from

H2 2024

H1

2024

Change from

H1 2024

 

 

 

 

 

 

Demand: current accounts

£5,682

£5,791

(2%)

£5,662

0%

Demand: savings accounts

£6,991

£7,534

(7%)

£8,108

(14%)

Fixed term: savings accounts

£690

£1,133

(39%)

£1,956

(65%)

Deposits from customers

£13,363

£14,458

(8%)

£15,726

(15%)

 

 

 

 

 

 

Deposits from customers includes:

 

 

 

 

Retail customers (excluding retail partnerships)

£5,000

£5,968

(16%)

£7,170

(30%)

SMEs4

£4,492

£4,442

1%

£4,224

6%

 

£9,492

£10,410

(9%)

£11,394

(17%)

Retail partnerships

£1,913

£1,785

7%

£1,734

10%

Commercial customers (excluding SMEs4)

£1,958

£2,263

(13%)

£2,598

(25%)

 

£3,871

£4,048

(4%)

£4,332

(11%)

 

4.      SME defined as enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding €50 million, and/or an annual balance sheet total not exceeding €43 million and have aggregate deposits less than €1 million.

 

· Excess liquidity has been successfully managed down, with high-cost fixed term deposits now comprising just 5% of the book, down 39% half-on-half. Total customer deposits ended  H1 2025 at £13.4 billion (H2 2024: £14.5 billion, H1 2024: £15.7 billion). The core customer deposit base continues to be predominantly Retail and SME.

· Cost of deposits for H1 2025 was 1.16%, with an exit cost of deposits at June 2025 of 1.02%- the lowest of any UK high street bank. Cost of deposits are already below the level needed to meet 2027 guidance.

· Stores remain a key element to the Group’s service offering and strategy, as an enabler of our relationship-based approach. Metro Bank opened a new store in Chester in July 2025, and two new stores are set to open in Gateshead and Salford later in 2025, with all locations selected to support both local consumers and our growing corporate, commercial and SME banking offer and local communities. 

                   
Loans

£ in millions

H1

2025

H2

2024

Change from

H2 2024

H1

2024

Change from

H1 2024

 

 

 

 

 

 

Gross loans and advances to customers

£8,882

£9,204

(3%)

£11,739

(24%)

Less: allowance for impairment

(£167)

(£191)

(13%)

(£196)

(15%)

Net loans and advances to customers

£8,715

£9,013

(3%)

£11,543

(24%)

 

 

 

 

 

 

Gross loans and advances to customers consists of:

 

 

 

 

 

Commercial lending5

£3,083

£2,661

16%

£2,437

27%

Specialist Mortgages lending

£1,247

£700

78%

-

-

Target segments

£4,330

£3,361

29%

£2,437

78%

Government-backed lending6

£514

£653

(21%)

£787

(35%)

Consumer lending

£133

£745

(82%)

£1,003

(87%)

Prime Mortgages lending

£3,905

£4,445

(12%)

£7,512

(48%)

Total run-off books

£4,552

£5,843

(22%)

£9,302

(51%)

 

5.      Includes CLBILS.

6.      BBLS, CBILS and RLS.

· Balances in the Group’s target lending segments of corporate, commercial and SME, and specialist mortgage lending grew by 29% half-on-half, and 78% year-on-year, to £4.3 billion. Together with legacy books in run-off, which at H1 2025 totalled £4.6 billion, total gross loans at H1 2025 were £8.9 billion. Total net loans at H1 2025 were £8.7 billion.

· Loan to deposit ratio at H1 2025 was 65%, providing further capacity for growth.

· Commercial loans (excluding BBLS, CBILS and RLS) increased by 16% at H1 2025 to £3.1 billion (H2 2024: £2.7 billion, H1 2024: £2.4 billion) following £1 billion of new gross lending in H1 2025- a Metro Bank record. Growth in new corporate, commercial and SME lending continues to be offset by attrition, particularly in commercial real estate and portfolio buy-to-let. The DTV of the portfolio at H1 2025 was 59% (H2 2024: 56%, H1 2024: 57%) and the portfolio has a coverage ratio of 2.09% (H2 2024: 1.98%, H1 2024: 2.08%).

· Specialist Mortgages increased by 78% half-on-half to £1.2 billion. Together with the Prime Mortgage book in run-off, total Retail mortgages were £5.2 billion at H1 2025, and remain the largest component of the lending book at 58% (H2 2024: 56%, H1 2024: 64%). The Debt to Value (DTV) of the portfolio at H1 2025 was 60% (H2 2024: 59%, H1 2024: 61%). Metro Bank’s operating model is tailored to more complex underwriting which enables the Group to meet the needs of more customers and scale underserved markets whilst offering improved risk-adjusted returns.

· Cost of risk for H1 2025 remained low, at 0.14% (H2 2024: 0.01%, H1 2024: 0.10%). The credit quality of new lending continues to be strong and the Group retains its prudent approach to provisioning.

· Overall arrears rates have improved and non-performing loans have reduced. Arrears levels have decreased to 4.9% at H1 2025 (H2 2024: 5.6%, H1 2024: 3.8%) and non-performing loans have reduced to 5.42% at H1 2025 (H2 2024: 5.48%, H1 2024: 3.75%).

· The loan portfolio remains highly collateralised and prudently provisioned. The ECL provision at H1 2025 was £167 million with a coverage ratio of 1.88%. The level of post-model overlays currently sits at £23 million or 14% of the ECL stock, up from 10% at H2 2024.

Profit and Loss Account

· Underlying profit before tax of £45 million in H1 2025 is more than treble H2 2024, driven by improvements in net interest income and continued cost reduction (H2 2024: profit £13 million, H1 2024: loss £27 million).

· Underlying costs reduced 8% half-on-half, to £235 million (H2 2024: £256 million, H1 2024: £255 million).

· Net interest margin for H1 2025 was 2.87% (H2 2024: 2.22%, H1 2024: 1.64%), with an exit net interest margin of 2.95% already nearing guidance of 3.00%-3.25% by December 2025. Structural improvements to net interest margin reflect lower cost of deposits and increased asset yields.

· Underlying net interest income increased by 8% half-on-half to £223 million (H2 2024: £206 million, H1 2024: £172 million), reflecting the continued transition towards higher yielding assets and a reduction in cost of deposits.

· Underlying net fee and other income has remained flat half-on-half at £63 million (H2 2024: £63 million, H1 2024: £62 million).

· Expected credit loss expense was £6 million for H1 2025 (H2 2024: £1 million, H1 2024: £6 million) reflecting a continued benign credit environment.

· Statutory profit before tax of £43 million for the half-year ended 30 June 2025 (H2 2024: loss of £179 million, H1 2024: loss of £34 million). Statutory profit after tax for the half was £30 million (H2 2024: £76 million (following £254 million Deferred Tax Asset recognition), H1 2024: loss of £33 million).

Capital, Funding and Liquidity

 

 

Position

H1 2025

Position

H2 2024

Minimum

requirement

including buffers7

Minimum

requirement

excluding buffers7

Common Equity Tier 1 (CET1)

12.8%

12.5%

9.7%

5.2%

Tier 1

16.6%

12.5%

11.4%

6.9%

Total Capital

18.9%

14.9%

13.7%

9.2%

Total Capital + MREL

27.0%

23.0%

22.9%

18.4%

Risk Weighted Assets (£ million)

6,437

6,442

-

-

7.      CRD IV buffers

· Capital position now optimised for growth following the £250 million AT1 securities issuance and completion of £584 million unsecured personal loan portfolio sale in H1 2025.

· Metro Bank’s MREL ratio at H1 2025 was 27.0% a 400bps improvement half-on-half (H2 2024: 23.0%, H1 2024: 22.2%) and 410bps above regulatory minimum requirements (including buffers).

· The Bank remains focused on optimising risk-adjusted returns on regulatory capital.

· Total RWAs remained flat half-on-half at £6.4 billion (H2 2024: £6.4 billion), reflecting the £584 million sale of the unsecured personal loans portfolio.

· RWA density at H1 2025 was 39% compared to 37% at H2 2024 reflecting the continued pivot to corporate, commercial and SME lending.

· Future benefits are expected from recently announced changes in Bank of England’s revised Statement of Policy on MREL. The Group expects to be reclassified as a transfer firm with MREL capital equal to minimum capital requirements. Given this, there are no current plans to raise future MREL. The Group continues to review its liability structure on an economic basis in the context of its ongoing regulatory and liquidity needs.

· Strong liquidity and funding position maintained. All customer loans are fully funded by customer deposits. Loan to deposit ratio at H1 2025 was 65%.

· Liquidity Coverage Ratio (LCR) at H1 2025 was 315% (H2 2024: 337%, H1 2024: 365%), with cash balances in excess of £2 billion.

· Net Stable Funding Ratio (NSFR) at H1 2025 was 165% (H2 2024: 169%, H1 2024: 153%).

· The Treasury portfolio of £6.4 billion includes £4.0 billion of investment securities, of which 80% are rated AAA and 20% are rated AA. Of the total investment securities, 93% is held at amortised cost and 7% is held at fair value through other comprehensive income.

· Over the next 2.5 years approximately £1.5 billion of fixed rate treasury assets will mature at an average blended yield of just over 1%. These will be replaced by asset with yields in line with or greater than the prevailing base rate.

Existing guidance reconfirmed

 

 

 

 

ROTE

• Mid-to-upper single digit in 2025, double-digit in 2026 and mid-to-upper teens thereafter

NIM

• Continued NIM expansion driven by asset rotation, and exit NIMs in 2025, 2026 and 2027 to be between 3.00%-3.25%, 3.60%-4.00% and 4.00%-4.50%, respectively

Costs

•  Year-on-year 4-5% reduction in cost for 2025

•  Cost to income ratios in 2026, 2027 and 2028 to be between 75%-70%, 65%-60% and 55%-50% respectively

         

 

Metro Bank Holdings PLC

Summary Balance Sheet and Profit & Loss Account

(Unaudited)

Balance Sheet

£ in millions

HoH

change

H1

2025

H2

2024

H1

2024

   

 

 

 

Assets

 

 

 

 

Loans and advances to customers

(3%)

£8,715

£9,013

£11,543

Treasury assets8

(13%)

£6,386

£7,301

£8,819

Other assets9

5%

£1,327

£1,268

£1,127

Total assets

(7%)

£16,428

£17,582

£21,489

 

 

 

 

 

Liabilities

 

 

 

 

Deposits from customers

(8%)

£13,363

£14,458

£15,726

Deposits from central banks

-

£400

£400

£3,050

Debt securities

1%

£685

£675

£675

Other liabilities

(40%)

£522

£866

£934

Total liabilities

(9%)

£14,970

£16,399

£20,385

Total shareholder's equity

23%

£1,458

£1,183

£1,104

Total equity and liabilities

(7%)

£16,428

£17,582

£21,489

 

  1. Comprises investment securities and cash & balances with the Bank of England.
  2. Comprises property, plant & equipment, intangible assets and other assets
 

 

 

 

Profit & Loss Account

£ in millions

HoH

change

H1

2025

H2

2024

H1

2024

 

 

 

 

 

 

 

 

 

 

Underlying net interest income

8%

£222.9

£206.0

£171.9

Underlying net fee and other income

0%

£63.4

£63.4

£62.0

Underlying net gains on sale of assets

(>100%)

(£0.2)

£0.1

£0.1

Total underlying revenue

6%

£286.1

£269.5

£234.0

 

 

 

 

 

Underlying operating costs

(8%)

(£234.7)

(£255.8)

(£254.6)

Expected credit loss expense

>100%

(£6.3)

(£0.9)

(£6.2)

 

 

 

 

 

Underlying profit/(loss) before tax

>100%

£45.1

£12.8

(£26.8)

 

 

 

 

 

Impairment and write-off of property plant & equipment and intangible assets

 

 

(£0.1)

 

(£43.7)

 

(£0.3)

Transformation costs

 

(£7.8)

(£26.6)

(£4.5)

Remediation costs

 

£0.4

(£19.5)

(£1.8)

Portfolio sale

 

£5.5

(£101.6)

-

Capital raise and refinancing

 

-

-

(£0.1)

Statutory profit/(loss) before tax

>100%

£43.1

(£178.6)

(£33.5)

 

 

 

 

 

Statutory taxation

 

(£12.7)

£254.2

£0.4

 

 

 

 

 

Statutory profit/(loss) after tax

(60%)

£30.4

£75.6

(£33.1)

 

 

 

 

 

             

 

 

 

Key metrics

H1

2025

H2

2024

H1

2024

 

 

 

 

Earnings per share

4.5p

11.2p

(4.9p)

Average weighted number of basic ordinary shares in issue

673.0m

672.9m

672.7m

Net interest margin (NIM)

2.87%

2.22%

1.64%

Lending yield

5.67%

5.48%

5.18%

Cost of deposits

1.16%

1.72%

2.18%

Cost of risk

0.14%

0.01%

0.10%

Arrears rate

4.9%

5.6%

3.8%

Underlying cost: income ratio

82%

95%

109%

Book value per share

£2.17

£1.76

£1.64

Tangible net asset value per share

£1.61

£1.57

£1.38

Risk weighted assets (RWAs)

£6,437m

£6,442m

£7,239m

Risk weight density (RWAs / total assets)

39%

37%

36%

Loan to deposit ratio

65%

62%

73%