Metro Bank (MTRO) Q4 2024 earnings summary

Executive summary

• Achieved statutory profit after tax of £42.5m in 2024, driven by recognition of a £254.6m deferred tax asset, despite a statutory pre-tax loss of £212.1m due to one-off items.

• Returned to underlying profitability in H2 2024 with £12.8m–£13m profit, beating guidance and marking a successful transitional year.

• Delivered 71% year-over-year growth in new corporate, commercial, and SME loan originations, and opened 110,000 personal and 36,000 business current accounts.

• Achieved £80m annualised cost savings, reducing on-shore headcount by over 30%, with further benefits expected in 2025.

• Completed £2.5bn mortgage portfolio sale and £584m unsecured loan sale, freeing capital and supporting asset rotation.

Financial highlights

• Net interest margin (NIM) at year-end was 2.65%, up from 1.52% in February 2024 and above guidance.

• Statutory profit after tax for the year was £42.5m; underlying profit before tax in H2 2024 was £12.8m.

• Net interest income fell 8% year-over-year to £377.9m, but rose 20% half-on-half in H2 2024; revenue up 15% half-on-half.

• Total costs reduced from £530m to £510m, mainly through a £31m reduction in people costs; underlying cost-to-income ratio at 101%.

• Customer deposits declined 7% year-over-year to £14.5bn, reflecting a deliberate reduction in high-cost fixed-term deposits.

Outlook and guidance

• Reconfirmed guidance for ROTE: mid-to-upper single digit in 2025, double digit in 2026, mid-to-upper teens by 2027.

• NIM expected to grow to 3.00–3.25% in 2025, 3.60–4.00% in 2026, and 4.00–4.50% in 2027.

• Cost-income ratio targeted to fall to 50%–55% by 2028, with 4–5% cost reduction in 2025.

• Lending to grow at 8–11% CAGR, with commercial lending to comprise 70% of the book by 2029.

• Treasury asset repricing and supplier renegotiations to provide significant NIM and ROTE uplift, especially in 2026 and 2027.