Metro Bank has announced that it swung to a loss of £183.4m in the first half of the year, down from the £13.6m profit reported the year prior.
Its latest results include an impact of around £109m from the effects of Covid-19, equivalent to 60% of the loss, comprising a £97m Covid-19 expected credit loss expense, as well as a lower transaction fee income.
In the six-month period, total deposits grew to £15.6bn, however, marking a 14% rise against the £14.5bn reported the year prior.
There was also an 8% growth in deposits from 31 December 2019, with strong growth in non-interest bearing accounts and improving mix, with 73% from retail and SME customers.
In light of medium-term uncertainty, the group noted it was “too early” to establish if there is any impact on its 2024 financial targets.
Daniel Frumkin, CEO at Metro Bank, said: “These have been testing times but I’m very proud of the way Metro Bank has demonstrated the benefits of its community banking model, with our colleagues stepping up to support our customers and the local communities we serve.
“We entered 2020 at the start of our transformation journey, and while the pandemic has weighed heavily on our financial performance, we’ve made early progress delivering against the strategic priorities set out in February.”
He added: “We’ve opened six new stores, continued to grow our number of customer accounts, built a new lending platform to deliver Bounce Back Loans, and announced the acquisition of RateSetter which will help us meet more customer needs through unsecured lending, whilst also demonstrating cost discipline.
“Our ambition to become the UK’s best community bank has never been more important and I’m confident we can build on this progress in the second half of the year.”
Its latest results come only days after the bank acquired Ratesetter.
It acquired the group for an initial consideration of £2.5m, with up to £9.5m to be paid out after the completion of the deal.
The acquisition presents an “attractive opportunity” for Metro Bank to improve its lending yield, with RateSetter having achieved an average total gross yield of 8% for the financial year ending 31 March 2020.