First quarter figures from Metro, one of the UK's best-known challenger banks, suggest the march of the challengers isn't just hype.
Revenues at Metro Bank rose 11 per cent to £37.7m in the quarter to the end of March, from £34.1m in the previous quarter. That pushed its post-tax loss down to £7.9m, 23 per cent lower than last quarter's £10.2m.
At this stage in proceedings, investors will want to know whether Metro has the nouse to keep drawing in the customers. Things were looking positive: loans rose to £4.1bn in the first quarter, up 125 per cent from the same period last year. That was driven by mortgage lending, which rose 173 per cent from last year, to £2.6bn.
Meanwhile, deposits were up 75 per cent, to £5.9bn, while assets were up 74 per cent, at £7.4bn.
Shares edged 0.3 per cent higher in the first hour of trading, at 2,013.5p.
Why it's interesting
Metro Bank was a little late to the challenger bank IPO party - it only floated in March, after rivals Virgin Money and Aldermore both went public in 2014. And its timing could have been better, given volatility in the markets, which meant it has only just returned to its IPO price of 2,000p per share.
But recent share price performance suggests that, like most things in life, investors just had to give it time. This morning chief executive Craig Donaldson suggested the bank, which was founded in 2010, is moving towards profitability.
If the nation's educators are anything to go by, investors should have plenty of confidence: last month founder Vernon Hill was awarded an honorary professorship by Cass Business School. So there's that...
What Metro Bank said
Donaldson said: “We have had a strong opening quarter in 2016. I am particularly pleased with the momentum and quality of our lending."
To which Hill added: "Every day we welcome new customers into our stores and make them Fans with our exceptional customer service.” Quite.
Market volatility may have caused Metro Bank's IPO to be rockier than anticipated, but the bank has high hopes for the future.