High street lender Metro Bank announced widening losses this morning, as provisions to cover loan losses due to the Covid pandemic eroded profits.
The dog-friendly bank said its underlying pretax loss was £271.8m to the year to 31 December compared to a £11.7m loss a year earlier.
It estimated £124m hit from the coronavirus pandemic.
Shares sunk 7.9 per cent to 138p this afternoon.
The bank’s statutory loss before tax was even worse, widening from £130m in 2019 to £310m in 2020.
Metro Bank’s loan book shrank from £14.bn to £12bn across the year, its tenth in operation.
Total deposits grew by more than £1.5bn to £16bn as at 31 December and the bank added another 200,000 customers in the year.
Metro Bank CEO David Frumkin said:
“The pandemic has clearly impacted performance, leading to significant expected credit losses, but our transformation strategy is firmly on track and we have accelerated initiatives to shift our asset mix, bringing higher yield and improving net interest margin, as evidenced in the second half.
However, Frumkin looked as recent efforts to move beyond the High Street of evidence that seeds of a revival had been sown.
“The purchase of the RateSetter platform has allowed us to enter the unsecured lending market. In addition, we have made progress against each of our strategic pillars, including the sale of part of our residential mortgage portfolio to further optimise our balance sheet, the launch of higher yielding products including specialist mortgages, and we have grown customer accounts to 2.2m”.