Metro Bank expects defaults to rise during 2021 in line with its provisions as government support offering during the COVID-19 crisis are wound down, it said after posting a deeper annual loss.
Its provisions for loan losses rose to £126.7 million at the end of 2020 from £11.7 million pounds a year earlier, driving up its underlying pretax loss to £271.8 million from £11.7 million .
On the plus side the bank Extended over 36,000 government-backed business loans totalling £1.5 billion, saw a 11% growth in deposits; meaningful mix shift to more current accounts, and a 10% growth in customer accounts
Daniel Frumkin, Chief Executive Officer at Metro Bank, said:
“It has been a truly unprecedented year for our business, colleagues and customers. Never has the role of a community bank been more important for people across the UK and I am incredibly proud of the way Metro Bank has continued to support and deliver for our customers. Whether through our colleagues who have kept all stores open and been available on the phone throughout national and regional lockdowns, or through our back office colleagues who have helped business and personal customers access much-needed government backed loan schemes, Metro Bank has made a real difference to the communities we serve.
“The pandemic has clearly impacted performance, leading to significant expected credit losses, but our transformation strategy is firmly on track and we have accelerated initiatives to shift our asset mix, bringing higher yield and improving net interest margin, as evidenced in the second half. The purchase of the RateSetter platform has allowed us to enter the unsecured lending market. In addition, we have made progress against each of our strategic pillars, including the sale of part of our residential mortgage portfolio to further optimise our balance sheet, the launch of higher yielding products including specialist mortgages, and we have grown customer accounts to 2.2 million.
“2020 marked Metro Bank’s 10th anniversary and whilst challenging, the strategic actions we have taken, supported by our incredible team of dedicated colleagues, means we remain on track to achieve our transformation plan as the UK’s best community bank.”
