Metro Bank reveals profit plunge after ‘challenging’ period
It comes after chairman Vernon Hill stepped down on Wednesday.
Profits plummeted at under-fire Metro Bank in its most recent quarter after a turbulent year for the lender which saw shares lose more than 90% of their value.
The company, which has faced “considerable headwinds”, said it had seen a £15.1 million pre-tax profit turn into a £2.2 million loss in the third quarter.
So far this year, profit has fallen by 71%, compared with the first nine months of 2018, to £11.3 million.
This financial performance reflects a challenging nine months for the bank Chief executive Craig Donaldson
“This financial performance reflects a challenging nine months for the bank,” said chief executive Craig Donaldson.
“Despite considerable headwinds, we have made strong progress in reducing costs, increasing fee income and further strengthening our capital and liquidity position.”
The company showed the poor results after the bell on Wednesday, just hours after announcing it was parting ways with founder and chairman Vernon Hill sooner than expected.
The American stepped down as chairman with immediate effect, but will stay as president and non-executive director.
The amount deposited with the bank fell by 4% in the three months to September 30, but it increased the value of its loan book by 13% to £14.9 billion.
The lender’s nightmare year started in January as it revealed a £900 million accounting error in its books.
It was later forced to abandon a £250 million bond offer.
But earlier this month investors oversubscribed to a £300 million fundraise, allowing the company to raise £475 million.
In its trading update on Wednesday, the lender said it was planning to reassure investors on how it would improve the business later this year.
“We are further evaluating our future growth plans to strike the right balance between growth, costs and capital efficiency,” Mr Donaldson said.
Jefferies analyst Joseph Dickerson said he expects investors “may push for… curbing store expansion plans for eight stores” per year.
Shares rose 0.3% to 193.6p, but markets closed before the update.