Metro Bank Holdings PLC (MTRO)
Metro Bank Holdings PLC: Interim results for half year ended 30 June 2023
01-Aug-2023 / 07:00 GMT/BST
Metro Bank Holdings PLC Interim results Trading update H1 2023 1 August 2023 Metro Bank Holdings PLC (LSE: MTRO LN) Interim results for half year ended 30 June 2023 Highlights | Underlying profit before tax of £16.1 million (H2 2022: loss of £2.6 million) represents the third consecutive quarter of underlying profitability, reflecting improved operating margins driven by the actions taken as part of the turnaround plan to optimise the balance sheet and control cost inflation for sustainable profitability. | | Statutory profit before tax of £15.4 million (H2 2022: loss of £10.5 million) reflects the significant reduction in exceptional items and has supported capital accretion in the half. | | Total underlying revenue was up 21% YoY but remained flat HoH at £285.6 million (H2 2022: £285.9 million, H1 2022: £236.2 million) reflecting improved lending yields offset by increased cost of deposits and limited loan growth given capital availability. | | Total underlying operating expenses reduced 3% both YoY and HoH to £258.2 million (H2 2022: £266.5 million, H1 2022: £266.3 million), driving positive jaws of 24% YoY and 3% HoH, despite persistent high inflation, as a result of the continued focus on cost discipline and the successful implementation of initiatives that enable the bank to scale appropriately. | | The bank’s service-led core deposit franchise remains resilient to increased competition in the market and continues to attract new customers, opening 106,000 Personal Current Accounts and 23,000 Business Current Accounts in the half. The bank remained ranked first for customer service in Stores in the CMA survey. | | Customer deposits reduced 3% HoH to £15.5 billion (31 December 2022: £16.0 billion) in line with prevailing market conditions, though the bank saw net deposit inflows in June, a trend that continued in July. | | The bank’s MREL ratio was 18.1% as at 30 June 2023, up 40bps from 17.7% as at 31 December 2022 and up 70bps from 17.4% as at 1 January 2023, reflecting the disciplined origination strategy and statutory profit for the half. |
Daniel Frumkin, Chief Executive Officer at Metro Bank, said: “I am encouraged by the activity across the business. Our statutory profitability in H1, making this the third consecutive quarter of underlying profitability, demonstrates that our strategy is working. We continue to win new customers every day through our service-led franchise, at the same time as showing ongoing cost discipline and pursuing our targeted store expansion. Whilst we remain watchful of macro-economic headwinds, we have the expertise, capability and infrastructure in place to unlock our future growth potential.” Key Financials £ in millions | 30 Jun 2023 | 31 Dec 2022 | Change from FY 2022 | 30 Jun 2022 | Change from H1 2022 | | | | | | | Assets | £21,747 | £22,119 | (2%) | £22,566 | (4%) | Loans | £12,572 | £13,102 | (4%) | £12,364 | 2% | Deposits | £15,529 | £16,014 | (3%) | £16,514 | (6%) | Loan to deposit ratio | 81% | 82% | (1pp) | 75% | 6pps | | | | | | | CET1 capital ratio | 10.4% | 10.3% | 10bps | 10.6% | (20bps) | Total capital ratio (TCR) | 13.2% | 13.4% | (20bps) | 13.8% | (60bps) | MREL ratio | 18.1% | 17.7% | 40bps | 18.3% | (20bps) | Liquidity coverage ratio | 214% | 213% | 1pp | 257% | (43pps) |
£ in millions | H1 2023 | H2 2022 | Change from H2 2022 | H1 2022 | Change from H1 2022 | | | | | | | Total underlying revenue1 | £285.6 | £285.9 | - | £236.2 | 21% | Underlying profit/(loss) before tax2 | £16.1 | (£2.6) | n.m. | (£48.0) | n.m. | Statutory profit/(loss) before tax | £15.4 | (£10.5) | n.m. | (£60.2) | n.m. | Net interest margin | 2.14% | 2.11% | 3bps | 1.73% | 41bps | Lending yield | 4.50% | 3.93% | 57bps | 3.40% | 110bps | Cost of deposits | 0.66% | 0.25% | 41bps | 0.14% | 52bps | Cost of risk | 0.18% | 0.33% | (15bps) | 0.29% | (11bps) | Coverage ratio | 1.54% | 1.41% | 13bps | 1.36% | 18bps | Underlying EPS | 7.8p | (2.0p) | n.m. | (28.5p) | n.m. | Tangible book value per share | £4.42 | £4.29 | 3% | £4.30 | 3% |
- Underlying revenue excludes grant income recognised relating to the Capability & Innovation fund.
- Underlying profit/(loss) before tax is an alternative performance measure and excludes impairment and write-off of property, plant & equipment (PPE) and intangible assets, transformation costs, remediation costs and costs incurred as part of the holding company insertion.
Investor presentation A presentation for investors and analysts will be held at 9.30AM (UK time) on 1 August 2023. The presentation will be webcast on: https://webcast.openbriefing.com/mb23h1/ For those wishing to dial-in: From the UK: 0800 358 1035 From the US: +1 855 979 6654 Access code: 332501 Other global dial-in numbers: https://www.netroadshow.com/events/global-numbers?confId=52736 Financial performance for the half year ended 30 June 2023 Deposits £ in millions | 30 Jun 2023 | 31 Dec 2022 | Change from FY 2022 | 30 Jun 2022 | Change from H1 2022 | | | | | | | Demand: current accounts | £7,106 | £7,888 | (10%) | £7,770 | (9%) | Demand: savings accounts | £7,218 | £7,501 | (4%) | £7,817 | (8%) | Fixed term: savings accounts | £1,205 | £625 | 93% | £927 | 30% | Deposits from customers | £15,529 | £16,014 | (3%) | £16,514 | (6%) | | | | | | | Deposits from customers includes: | | | | | Retail customers (excluding retail partnerships) | £5,647 | £5,797 |
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