Metro Bank turnaround sees it win back savings customers

Metro Bank has revealed first quarter lending slumped by nearly 10% but it notched up a hike in savings thanks to turnaround efforts launched in the wake of last year’s funding crisis.

The troubled high street lender reported total lending of £11.8 billion in the three months to March 31, down 9% from £12.9 billion a year ago as it switched focus to more profitable specialist mortgages and commercial loans.

Total deposits rose 4% year-on-year to £16.2 billion after it launched a campaign to win back savers with attractive interest rates following outflows of cash amid fears over its future last October.

The group secured a £925 million rescue funding deal with shareholders last autumn and has since launched a cost-cutting plan that will end its seven-day-a-week trading and see jobs axed.

It announced in March that it was cutting around 1,000 roles, with more job losses possible, as it looks to trim annual costs by £50 million, with another £30 million due to be made in savings by the end of 2024.

The bank added that from March 29 all of its 76 stores will no longer open on Sundays or bank holidays and opening hours will be cut.

Reporting first quarter figures on Tuesday, chief executive Daniel Frumkin said he was “confident that financial results will continue to improve”.

The group is now taking its foot off the pedal in terms of attracting new savers and is focusing more on less costly deposit rates, which saw deposits fall by more than £200 million in March.

Mr Frumkin said: “Following the successful deposit campaign launched in the fourth quarter, we have implemented our plans to reduce cost of deposits… this led to a modest reduction of higher-cost deposits in March.”

He added: “Based on performance in the first quarter we remain confident that financial results will continue to improve throughout 2024.”

Under its branch opening hours overhaul, the group said last month that the bulk of its branches – 44 sites – will only be open
five days a week, from Monday to Friday, 9.30am to 5pm.

The remaining 32 stores will be open six days a week, from 9.30am to 5pm on Monday to Friday, and 11am to 4pm on Saturdays.

Metro Bank branches were previously open from 8.30am until 6pm from Monday to Saturday and 11am to 5pm on Sunday.

Metro Bank has said it would not close any of its branches, with plans to open at least another 11 sites, mainly across the North of England.