Metro Bank's losses shrink as lender targets annual profit in 2017

Shares in Metro Bank climbed over 1.5% on Wednesday morning (22 February), after the challenger bank reported it had moved closer to turn an annual profit in 2016.

Over the last financial year, the FTSE 250-listed lender cut its statutory loss before tax to £17.2m ($21.5m), compared with £56.8m the year before, while its underlying pre-tax loss shrank to £11.7m from £46.6m in the previous 12 months.

Total annual income rose from £120m to £195.1m, with net interest rising from £88.9m to £154.2m. Meanwhile, total assets jumped 64% year-on-year to £10.6bn, while loans were 56% higher than in the previous year and loans rose 66% from the corresponding period 12 months prior.

"The year saw continued major investment in technology, stores and colleague training – around £100m in total – helping us to achieve a 62% full year increase in revenue and our second successive quarter of profitability," said group chief executive Craig Donaldson.

The bank, which unveiled plans to open between 10 and 12 new branches this year, said it was confident to deliver a full year profit in 2017 and had not recorded a shift in customer behaviour since the Brexit vote in June last year.

Chairman Vernon Hill added the response of the British public to Metro Bank had exceeded the lender's expectations.

"Our goal is to create a legendary, emotional brand by creating fans who join our brand, remain loyal and bring their friends," he said.

"I'm very proud of the bank's success over the past 12 months, and my thanks go to our colleagues, investors and fans who are Metro Bank. I am confident that this is just the beginning, the best is yet to come."