City experts have warned of further pain to come at Metro Bank after the troubled lender revealed widening losses last night.
Metro Bank reported underlying losses before tax of £3.6m for the first nine months of the year after the bell closed yesterday, falling from £25.1m last year as a result of a major accountancy error.
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However, analysts at Barclays said that a “challenged medium term operating outlook” means profits are unlikely to return for at least a year.
“It’s hard to see Metro Bank as anything but loss making in 2020 and beyond,” the bank said in a note this morning.
Barclays is forecasting a return on tangible equity (a measure of profitability) of minus 0.1 per cent, minus 1.4 per cent and minus 0.9 per cent during 2019, 2020 and 2021 respectively.
Shares in the company edged up five per cent this morning, but the value of Metro’s stock has plunged by roughly 90 per cent over the last 12 months.
Investor appetite has waned since January, when the firm discovered it had misclassified £900m-worth of loans as being less risky than they were.
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Metro Bank has since suffered a sharp drop in profits, embarked on a failed bond issue and dramatically shaken up its senior management.
Yesterday the firm’s colourful co-founder Vernon Hill quit the firm with immediate effect, leaving before his expected departure at the end of this year.