Metro Bank heads for first profit after record start to 2016
High street lender Metro Bank said it notched up a record start to the year and was heading towards its first profit as it narrowed losses further.
In its first set of figures since floating on the stock market in March, the challenger bank said customer savings deposits surged by £790 million in the first three months of 2016 to £5.9 billion - up 15% since the end of last year.
Metro Bank also said it attracted a record 62,000 new customers in the quarter, while net lending more than doubled year on year to £4.1 billion.
It trimmed underlying losses by 7% to £7.9 million, although £3.2 million in costs for its stock market listing saw it post bottom-line losses of £11.1 million.
Chief executive Craig Donaldson said it had been a "strong opening quarter".
"Metro Bank continues to move towards profitability with revenue up 60% year on year," he added.
The group raised £400 million in its March float, but it cut the size of the listing from £500 million, reducing the price of its shares to £20 from £24 as turmoil gripped the markets.
The group opened its 41st store in the quarter and plans to open another eight this year, at a time when the major high street lenders are shutting branches and cutting staff.
Royal Bank of Scotland dealt the latest blow last week, axing 600 jobs amid plans to close 32 branches and reducing opening hours for hundreds of remaining branches.
Vernon Hill, chairman and founder of Metro Bank, said: "We continue to build Metro Bank into a major banking force in the UK."
Lending on a net basis - gross loans less redemptions - surged by 125% on a year earlier.
It said by branch, customer deposits rose to a record £6.6 million a month, up from £6.3 million in the previous three months, with more than half - 53% - of deposits coming from businesses.
Analysts at Jefferies said Metro Bank's performance per branch was "incredibly impressive" and predicted the lender would break even later this year and deliver its first profit in 2017.
Metro Bank employs more than 2,000 people across 41 branches in London and the South East.
It was the first new high street bank to enter the industry for 150 years when it launched in Holborn six years ago.