Metro Bank has reported a nearly £500m fall in lending at the start of 2024 but saw a rise in deposits as it looks to rebound from potential collapse last year.
The bank said in a trading update on Tuesday that its loan book shrank four per cent to £11.82bn from £12.3bn during the first three months of 2024.
This figure was down nine per cent from £12.92bn in the first quarter of 2023.
The branch-focused lender said the decline was in line with expectations and came as it “strategically repositions its balance sheet” towards higher-yielding specialist mortgages and loans to small and medium-sized businesses, as well as other commercial lending.
“The focus remains on optimising risk-adjusted returns on regulatory capital to improve margins and profitability,” it added.
Meanwhile, Metro Bank posted a four per cent rise in deposits to £16.21bn from £15.62bn – also up four per cent from a year ago.
The bank said its “underlying service-led core deposit franchise” continued to grow by more than 50,000 personal and business current accounts during the quarter.
Its assets came in at £22.61bn, up two per cent from £22.25bn in the previous quarter and £22.1bn year-on-year.
Metro Bank swung to its first annual profit since 2018 last year after a rocky few years that culminated in it being rescued by Colombian billionaire Jaime Gilinski Bacal after his firm, Spaldy Investments, led a £925m refinancing package.
The lender is now implementing measures to lower costs, including cutting 1,000 jobs, automating some processes and reducing opening times at branches.
Chief executive Daniel Frumkin said on Tuesday: “Following the successful deposit campaign launched in Q4, we have implemented our plans to reduce cost of deposits and optimise our elevated liquidity position; this led to a modest reduction of higher cost deposits in March.”
“Based on performance in the first quarter we remain confident that financial results will continue to improve throughout 2024 as we optimise funding, deliver on cost savings, continue our asset rotation and benefit from lower yielding fixed rate treasury and mortgage maturities,” he added.