Metro Bank reports Q1 growth as shares fall
The bank’s chairman has seen off what has been called a ‘shareholder revolt’ in recent days.
Metro Bank continues to grow quarter-on-quarter. The challenger bank, arguably Britain’s first, has reported underlying profit before tax of £10m for the first quarter of the year, up 21 per cent from the previous quarter.
Yet the company has seen its shares fall 10 per cent since yesterday, from around £35 per share to around £32.
Yesterday, the BBC reported that founder and chairman Vernon Hill had seen off a shareholder revolt, with 96 per cent of votes going in favour of him continuing in his role at the bank’s annual general meeting. Royal London Asset Management, an investor, had raised questions about payments made to InterArch, a design firm owned by Shirley Hill, the wife of Vernon Hill.
In addition to bolstered profits, Metro Bank has seen significant deposit and lending growth. Its deposits rose 41 per cent year-on-year to £12.7bn, with gross lending climbing to £11bn, up 69 per cent year-on-year. The bank’s customer count now stands at 1,305,000, with another 88,000 joining in the first quarter.
A week ago, Metro Bank unveiled ‘Insights’, a money management tool powered by artificial intelligence. Commenting on its results, chief executive officer Craig Donaldson doubled down on his commitment to fintech.
“We will continue to find new ways to make our customers’ lives easier,” he said. “Over the course of the year we will invest significantly in our digital offering to combine the best of fintech with our fanatical focus on service.”
Yet the bank continues to balance technological innovation with a physical presence. It has twelve openings planned for 2018, beginning with its 56th branch in Watford, which will open in May.
Metro is also in the running for the awards that are on offer through the £425m RBS Remedies Fund. It claims that its application is progressing but anticipates incurring further costs in connection to the bid. The bank spent £590,000 on its bid in the first quarter.
The Remedies fund is designed to help smaller banks and financial innovators improve their business banking offerings.
Metro will be up against other challenger banks, such as Starling and OakNorth, in its pursuit of the RBS awards. Starling CEO Anne Boden recently wrote that the funds should be reserved for true challengers – arguing that the awards are simply not large enough to make a significant impact at such banks as Santander and TSB.