Embattled high street lender Metro Bank swung to a loss in the third quarter of this year, the bank announced hours after its chairman unexpectedly quit the firm months ahead of his planned exit.
Metro Bank reported an underlying loss before tax of £2.2m in the three months to 30 of September compared to £6.7m profit in the previous quarter and £15.1m profit the year before following a torrid year for the lender.
The firm blamed the loss on a one-off £2.5m charge following the £521m loan portfolio disposal in July 2019 as it attempted to strengthen its balance sheet.
An accounting error, disclosed in January, has wiped nearly 90 per cent off the lender’s share value so far this year.
Metro Bank chief executive Craig Donaldson said the financial performance reflected a “challenging nine months for the bank.”
The third quarter trading update was published hours after Metro Bank chairman Vernon Hill stepped down with immediate effect, ahead of his planned exit at the end of this year.
However, the colourful and controversial founder insisted that “the best is yet to come” for the bank as he announced his departure.
City grandee and senior independent director at Metro Bank Michael Synder has been appointed interim chairman with immediate effect, while Hill will stay on as a non-executive director until the end of December.
This evening, the bank said it would update on its strategy going forward when it publishes its full-year results .
“Metro Bank is further evaluating its future plans to balance growth, profitability and capital efficiency, the results of which will be communicated in conjunction with the full-year results,” it said.
“Some traders will continue to swerve the stock as the lending margins are likely to remain under pressure, and management won’t issue a big picture outlook for another three months,” CMC Markets analyst David Madden said.
He added: “The bank needs to distance itself from Mr Hill on account of the reputational damage, so a change of leadership is a positive step, but in light of today’s third-quarter update, the bank still faces many challenges.”
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