METRO Bank has swung to its first annual profit since 2018 after the branch-focused lender was rescued from potential collapse by a major refinancing package last October and embarked on a restructuring set to involve 1,000 job cuts.

The firm posted a statutory profit before tax of £30.5m in 2023, compared with a £70.7m loss in 2022. Its underlying loss reduced by 67 per cent year-on-year to £16.9m. Metro Bank took a £20.2m one-off charge tied to its cost reduction efforts, which it said was expected to deliver £30m of annualised cost savings by the end of 2024 - with £50m already planned.

Higher interest rates boosted high street banks' profits last year. Metro Bank's net interest margin - reflecting the difference between what it charges on loans and pays to savers - narrowed in the second half of the year to 1.85 per cent from 2.14 per cent in the first half.

Its underlying revenue grew five per cent year-on-year, which the bank said reflected "effective asset rotation and increased yields plus 12 per cent growth in capital efficient fee income".

As part of restructuring efforts following a turbulent couple of years, Metro Bank said its headcount would be cut by around 1,000 - 22 per cent - by the middle of April.

Other cost-saving measures include automating some processes, reducing opening times at branches and simplifying its business model.

Chief executive Daniel Frumkin said on Wednesday: "We were pleased to return to profit on a statutory basis and deliver our best half-year results for several years.

"Looking forward, I remain confident in our ability to be the number one community bank."

(c) 2024 City A.M., source Newspaper