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Metro Bank reports record growth in deposits and loans

20th April 2016

Metro Bank PLC (LSE: MTRO) has delivered a strong trading performance in the first quarter of 2016 as it continues to create Britain’s leading growth bank.

Q1 2016 saw record growth in deposits (+£790m); record organic growth in lending (+£586m); and record customer account acquisition (+62,000).

Q1 Highlights

  • Completion of a £400m capital raise
  • Listing on the main market of the London Stock Exchange
  • Total deposits up 75% year-on-year to £5,898m
  • Record net deposit growth per store per month of £6.6m ($9.5m)
  • Total loans increased 125% year-on-year to £4,129m
  • Revenue up 60% year-on-year
  • Underlying loss after tax1 down to £7.9m (compared to £10.2m in Q4 2015)
  • Underlying loss after tax1 improved by 23% quarter-on-quarter
Quarter ending £ in millions31 March 201631 December 2015% Change In Qtr.31 March 2015% Change In Year
Assets £7,388 £6,148 +20% £4,244 +74%
Loans £4,129 £3,543 +17% £1,833 +125%
Deposits £5,898 £5,108 +15% £3,375 +75%
Total Revenue £37.7 £34.1 +11% £23.6 +60%
Underlying profit/(loss) after tax £(7.9) £(10.2) +23% £(8.5) +7%

[1] Underlying loss after tax excludes listing and related costs of £3.2m. Statutory loss after tax £11.1m.

[2] Excludes gains on sale of investment securities

Craig Donaldson, Chief Executive Officer said: “We have had a strong opening quarter in 2016. I am particularly pleased with the momentum and quality of our lending; net lending increased by 125% per cent year on year to £4.1 billion driven by strong growth in both residential mortgages and commercial lending.

Total deposits increased 75% year-on-year to £5,898m with deposits coming from a diversified mix of both businesses and retail customers.

We continue to move towards profitability with revenue up 60% year-on-year and the underlying quarterly loss after tax down to £7.9m (compared to £10.2m in the final quarter of 2015); an improvement of 23% quarter-on-quarter.”

Vernon Hill, Chairman and Founder said: “We continue to create a banking revolution by building Metro Bank into a major banking force in the UK. Our constant focus on customer service and convenience across all our channels, supported by our flexible IT and powerful AMAZE culture, continues to differentiate us, and provide a compelling competitive advantage in the UK market. Every day we welcome new customers into our stores and make them Fans with our exceptional customer service.”

Highlights for the Quarter Ended 31 March 2016:

  • The bank completed a £400m capital raise and listed on the London Stock Exchange in March 2016.
  • As of 31 March total assets were £7,388m, up from £6,148m at 31 December 2015 and £4,244m at 31 March 2015; representing year-on-year growth of 74% and 20% growth in the quarter.
  • Record net deposit growth per store per month of £6.6m ($9.5m) in Q1 2016 versus £6.3m in Q4 2015, and £5.3m in Q1 2015. Comparative store deposit growth (a measure of deposit growth using deposit numbers from stores that have been operating for more than a full year) is 66%.
  • As of 31 March total deposits were £5,898m, up from £5,108m at 31 December 2015 and £3,375m at 31 March 2015; representing year-on-year growth of 75% and 15% in the quarter. Deposits for the first quarter grew £790m. Deposits from commercial customers represent 53% of 31 March 2015 total deposits (December 2015: 53%).
  31 March 2016
£’000
31 March 2015
£’000
Annual
Growth Rate
Demand: non-interest bearing 1,586,602 930,103 71%
Demand: interest bearing 2,475,779 1,623,483 53%
Fixed term 1,835,851 821,815 23%
Deposits from customers 5,898,232 3,375,401 75%

Deposits from customers include:

  March 2016
£’000
31 March 2015
£’000
Annual
Growth Rate
Deposits from retail customers 2,775,317 1,565,850 77%
Deposits from corporate customers 3,122,915 1,809,551 73%

Total loans as of 31 March were £4,129m, up from £3,543m at 31 December 2015 and £1,833m at 31 March 2015; an increase of 125% year-on-year, and a 17% increase in the quarter. Loans to commercial customers represent 34% of total lending as of 31 March (December 2015: 36%).

 31 March 2016
£’000
31 March 2015
£’000
Annual
Growth Rate
Gross Loans and advances to customers 4,135,867 1,839,328 -
Less: allowance for impairment (7,294) (6,546) -
Net Loans and advances to customers 4,128,573 1,832,782 125%

Gross loans and advances to customers include:

 31 March 2016
£’000
31 March 2015
£’000
Annual
Growth Rate
Commercial loans 1,427,439 835,374 71%
Residential mortgages 2,566,158 940,931 173%
Consumer and other loans and advances 142,270 63,023 126%

Customer acquisition continues to be very strong. Customer accounts have increased from 655,000 on 31 December 2015 to 717,000 at 31 March 2016; a quarterly net increase of 62,000 accounts. An increase of 45% year-on-year and a 9% increase in the quarter.

  • Underlying loss after tax has improved by 23% quarter-on-quarter to £7.9m (compared to £10.2m in Q4 2015). This excludes Listing costs of £3.2m leading to a Statutory loss after tax of £11.1m.
  • Asset quality remains strong. Loan loss reserve as a percentage of total loans was 0.18% at 31 March 2016 compared to 0.36% at 31 March 2015.
  • Kings Road Chelsea (store 41) opened on 15 April.
  • Capital ratios remain robust and well above regulatory requirements. Common Equity Tier 1 Capital (“CET1”) as a percentage of risk weighted assets is 25%. Regulatory Leverage ratio is 9%.
  • The bank has appointed RBC Capital Markets and Jefferies Hoare Govett as joint corporate brokers.

Analyst and investor call


An analyst and investor call will be held as follows:

Date: Wednesday 20 April 2016
Time: 2.00pm (London time)
Dial: +44 (0)20 3139 4830
Dial: +44 (0)808 237 0030 (UK Toll Free)
Participant Pin: 67377918#
URL for International Dial in numbers: http://events.arkadin.com/ev/docs/NE_FEL_Events_International_Access_List.pdf
An operator will assist you in joining the call.


For more information, please contact:


Metro Bank PLC Press Office
Deborah Lewis
+44 (0)20 3427 1485
pressoffice@metrobank.plc.uk

Metro Bank PLC Investor Relations
Jo Roberts
+44 (0) 20 3402 8900
IR@metrobank.plc.uk

Forward looking statements

This announcement contains certain forward looking statements with respect to the business, strategy and plans of Metro Bank PLC and its current goals and expectations relating to its future financial condition and performance. Such statements are not historical facts, nor are they guarantees of future performance.

By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future.

Metro Bank PLC
Balance Sheet and Profit & Loss Account

Assets:

Balance SheetAnnual Growth Rate31 March 2016
£’000
31 March 2015
£’000
31 March 2014
£’000
Loans and advances to customers 125% 4,128,573 3,542,548 1,832,782
Treasury assets [1] - 2,906,176 2,281,940 2,083,752
Other assets [2] - 353,254 323,534 327,460
Total assets 74% 7,388,003 6,148,022 4,243,994
Liabilities 75% 5,898,232 5,107,656 3,375,401
Deposits from customers - 691,357 633,191 413,663
Other liabilities - 6,589,589 5,740,847 3,789,064
Total liabilities 76% 798,414 407,175 454,930

Total shareholder's equity:

Profit & Loss AccountAnnual Growth Rate2016 Q1
£’000
2015 Q4
£’000
Q1
£’000
Net interest income - 30,507 27,413 17,750
Fees & other income - 7,240 6,638 5,874
Net gains on sales of securities - 40 254 3,890
Total revenue 37% 37,787 34,305 27,514
Operating expenses [3] - (47,349) (46,812) (38,045)
Underlying loss before tax 9% (9,562) (12,507) (10,531)
Underlying taxation - 1,617 2,332 2,029
Underlying loss after tax 7% (7,945) (10,175) (8,502)
Listing and related costs - (3,107) (1,465) -
Impairment of PPE and intangible assets (net of tax) - - (7,699) -
Write down of deferred tax asset - - (2,651) -
Statutory loss after tax - 11,052 (21,990) (8,502)

[1] Comprises investment securities, cash & balances with the Bank of England, and loans and advances to banks

[2] Comprises property, plant & equipment, intangible assets and other assets

[3] Includes credit impairment charge