(Alliance News) - Metro Bank PLC on Wednesday said its 2020 loss more than doubled from the loss reported in 2019, as the lender suffered a sharp rise in expected credit losses and saw income slump on lower margins.
Shares in the challenger bank were down 7.6% in London on Wednesday morning at 138.55 pence each.
For 2020, Metro posted a pretax loss of GBP311.4 million, widened from 2019's loss of GBP130.8 million loss.
The lender's expected credit losses ballooned to GBP126.7 million in 2020 from GBP11.7 million in 2019.
Total income rose 4.1% to GBP432.6 million from GBP415.6 million. The was attributed the bank's GBP73.3 million gain on sales during 2020. Underlying net revenue slumped 15% to GBP340.9 million from GBP400.1 million.
Net interest income dropped 19% in 2020 to GBP249.7 million from GBP308.1 million, as its net interest margin worsened to 1.22% from 1.51%.
Metro's loan book ended 2020 at GBP12.09 billion compared to GBP14.68 billion at the end of 2019, but customer deposits improved to GBP16.07 billion from GBP14.48 billion.
Metro ended 2020 with a CET1 ratio of 15.0% from 15.6% at the same point the year before.
Chief Executive Daniel Frumkin said: "It has been a truly unprecedented year for our business, colleagues and customers. Never has the role of a community bank been more important for people across the UK and I am incredibly proud of the way Metro Bank has continued to support and deliver for our customers."
Frumkin said the pandemic "has clearly" impacted Metro's performance, particularly the "significant" rise in expected credit losses, but claimed the lender's transformation strategy is "firmly on track".
"We have accelerated initiatives to shift our asset mix, bringing higher yield and improving net interest margin, as evidenced in the second half," he continued.
Frumkin added: "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 2.2 million."
By Paul McGowan; paulmcgowan@alliancenews.com
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Metro Bank (MTRO)