Metro Bank Holdings PLC on Tuesday said assets and deposits grew, while loans were reduced, in the first quarter of 2024, as it expressed confidence in improving performance throughout 2024.

The London-based retail bank said total deposits at March 31 were £16.21 billion, up 3.9% from £15.60 billion a year earlier, while assets grew 2.3% to £22.61 billion from £22.10 billion.

‘The significant levels of liquidity raised in [the fourth quarter of] 2023 now enable the group to focus on low-cost relationship deposits to manage down the cost of funding. Deposits decreased by over £200 million in March,’ Metro Bank said.

Loans outstanding, meanwhile, fell 8.5% to £11.82 billion from £12.92 billion. Metro Bank’s loan-to-deposit ratio was reduced to 73% from 83% as a result.

Metro Bank said this was due to the bank strategically repositioning its balance sheet towards higher yielding specialist mortgages and small-to-medium enterprises/commercial lending.

The focus ‘remains on optimising risk-adjusted returns on regulatory capital to improve margins and profitability’, Metro Bank said.

Chief Executive Officer Daniel Frumkin commented: ‘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.

‘Lending activity levels are in line with expectations and the pivot to higher margin commercial and residential lending progresses, with lending balances reflecting the time lag between committing facilities and subsequent draw down. During the period we also maintained our focus on people-people banking and relationship-based services, with further growth across personal and business current accounts.’

Looking ahead, Frunkin continued: ‘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.’

Shares in Metro Bank were down 1.2% to 34.28 pence each in London on Tuesday late morning.

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