By Oliver Smith on Wednesday 26 February 2020
Banking Competition Remedies fund says the money will be made available for other challengers.
High street challenger Metro Bank this morning dramatically scaled back its growth plans upon revealing the business had fallen to a £130.8m pre-tax loss in 2019.
The loss was attributed to a sharp fall in customer deposits, led by business customers in the wake of the bank’s accounting error last January, and a vast write-down on its intangible assets.
Crucially Metro’s new CEO Dan Frumkin said the bank would scale back its plans to open stores in Northern England, from 30 new stores to just 15.
As a consequence Metro Bank said it will be handing back £50m from the £120m it was awarded from the Banking Competition Remedies fund last year, money that was contingent on Metro supporting businesses in the north of England.
“Strategy responds to changing circumstances,” said the BCR chairman Godfrey Cromwell, who praised Metro Bank for its current progress and for coming to the fund to agree revised commitments.
“BCR’s priority is to promote competition in the market for banking services to SMEs. We now have an opportunity to redeploy £50m to further this objective. We will retain a robust focus on monitoring of all grants, while also engaging with the best way to use the returned CIF funds.”
The fund did not reveal how the cash will be redeployed or what the process will be, but the news certainly opens the door for existing and prospective recipients to apply for additional funding.
The BCR was set up with £775m cash from the Royal Bank of Scotland and is part of European Union conditions attached to the £45bn government bailout of the high street bank at the height of the financial crisis a decade ago.