Business
Metro Bank Loses £130m After Disastrous Year
Metro Bank (MTRO.L) swung to a huge loss last year as it battled a loan miscalculation fiasco that upended the business.
Metro Bank said on Wednesday it made a loss of £130.8m ($170m) last year, compared with a profit of £40.6m in 2018.
The bank blamed a £88m write-down of assets, including millions of costs linked to loan issues last year.
However, Metro Bank fell to an £11.7m loss on an underlying basis when one-off costs are stripped out. That compared to an underlying profit of £50m in 2018.
Revenue shrank by 1% to £400m in 2019 and customer deposits declined by 8% to £14.4bn. Demand for its retail savings account fell by 19% and deposits from commercial customers, not including small businesses, halved. Total assets fell by 1% to £21.4bn.
New chief executive Dan Frumkin said the results reflected “a very challenging year for Metro Bank” but said it was now “on a more positive trajectory”.
Metro Bank admitted in January 2019 it had misclassified some loans, which were riskier than first thought. It forced the bank to set aside extra cash to cover potential losses and ask investors for £375m to bolster funds.
The scandal pushed the bank to a quarterly loss, prompted some customers to withdraw their money, and led to the exit of both Metro’s founder and chief executive. Shares in the bank have also fallen over 90% since the loan issue was announced.-UKFInance
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