Metro Bank Holdings PLC - London-based retail bank with 76 ’stores’ - Admits it won’t get approval this year from Bank of England’s Prudential Regulation Authority for a reduction in its capital requirement for residential mortgages. Metro Bank says that in its latest discussions with the UK financial regulator, the PRA indicated more work is required from the company, meaning approval won’t be granted during 2023, if ever. Metro Bank has applied to use an advanced internal ratings based approach to counting the capital it must hold against the residential mortgage lending that it makes.

‘Whilst Metro Bank continues to engage with the PRA on its application, there is no certainty that approval will be obtained, the timing of any approval or the level of any reduction in risk weighted assets and consequential reduction in regulatory capital requirements that might be achieved,’ Metro Bank cautions, adding: ‘The board retains conviction in the merits of Metro Bank’s customer-centric model and strongly believes that there is a significant opportunity set that the company can capitalise on, subject to renewed balance sheet strength.’

UK regulators found an accounting error in Metro Bank’s loan book at the start of 2019. In January of that year, Metro Bank announced it had underestimated the risk on its commercial loans book and needed to raise capital to compensate for the shortfall and, as a result, was forced to issue an update highlighting the increased risk. Metro Bank was demoted from the FTSE 250 index in September 2019. It has not returned since. The company had listed in 2016.

Current stock price: 90.50 pence, down 11% in London late Tuesday morning

12-month change: down 0.6%

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