Metro Bank Holdings PLC on Tuesday said it returned to underlying profitability in October, but also confirmed it received a fine from the UK Financial Conduct Authority for inadequate anti-money laundering controls.
The high street lender has not reported annual profit since 2018 but highlighted it is ‘continuing to make strong progress’ in its financial trajectory.
Metro Bank said its current performance aligns with its guidance for 2025 provided in its half-year results, targeting a mid-to-upper single-digit return on tangible equity. The bank’s ROTE was 4% in 2023.
Chief Executive Officer Daniel Frumkin said: ‘The bank returned to profitability in October, in line with guidance, and thanks to our continued emphasis on cost discipline and balance sheet management. Net interest margin improved, driven by our asset rotation into niche and underserved markets, and the successful completion of the mortgage portfolio sale to NatWest.’
Alongside Metro Bank’s quarterly update, the FCA announced a £16.7 million fine for the bank’s failure to monitor over 60 million transactions, totalling £51 billion, for money laundering risks between 2016 and 2020.
The FCA statement read: ‘Metro’s failings risked a gap being left in our defence against the criminal misuse of our financial system. Those failings went on for too long.’
Acknowledging the fine, Metro Bank said it fixed its transaction monitoring systems in 2020.
CEO Frumkin said: ‘The conclusion of these enquiries draws a line under this legacy issue, allowing the bank to move forward and fully focus on the future.’
As of September 30, Metro Bank’s assets totalled £20.80 billion, a 3.2% decrease from £21.49 billion at the end of June.
Total net loans fell to GBP 9.1 billion, down 22% from GBP 11.5 billion on June 30, following the completion of a £2.5 billion mortgage portfolio sale.
Customer deposits stood at £15.1 billion on September 30, a 4.2% decline from £15.7 billion at the end of June, reflecting the bank’s focus on improving cost of deposits.
Metro Bank shares were up 0.1% at 84.60 in London early Tuesday afternoon.
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