Metro Bank (MTRO) H1 2025 earnings summary

Executive summary

• Underlying profit before tax reached £45.1 million in H1 2025, up 268% year-over-year, driven by 22% revenue growth and 8% cost reduction.

• Strategic focus on relationship banking, cost discipline, asset rotation, and deposit optimization drove improved returns and operational efficiency.

• Net interest margin improved to 2.87% for H1 2025, with an exit NIM of 2.95%, nearing 2025 guidance.

• Record £1 billion in new corporate/commercial/SME lending, double H1 2024, with a strong £800 million credit-approved pipeline.

• Robust capital and liquidity positions maintained, with CET1 at 12.8% and LCR at 315%.

Financial highlights

• Revenue rose to £286 million, up 22% year-over-year; net interest income increased 30% to £223 million.

• Statutory profit before tax was £43.1 million, reversing a loss in H1 2024; statutory profit after tax was £30 million.

• Cost reduced by 8% year-over-year, improving cost-to-income ratio from 95% to 82%.

• Net interest margin expanded to 2.87% (up 123bps YoY); cost of deposits at 1.16% (exit rate 1.02%).

• Loan-to-deposit ratio at 65%, with risk-weighted assets stable at £6.4 billion.

Outlook and guidance

• Guidance reconfirmed: ROTE expected in mid-to-upper single digits for 2025, double digits in 2026, and mid-to-upper teens by 2027.

• NIM expected to reach 3.00–3.25% by end-2025, 3.60–4.00% in 2026, and 4.00–4.50% in 2027.

• Cost-to-income ratio expected to fall to 70–75% in 2026 and 60–65% in 2027.

• Lending book to grow 8–11% CAGR, with commercial lending rising to 70% of total by 2029.

• Future benefit anticipated from changes to the MREL regime, reducing capital requirements.