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UPDATE 1-Metro Bank swings to $314 million loss on pandemic bad loan charges

Wed, 5th Aug 2020 07:20

(Adds details)

LONDON, Aug 5(Reuters) - Britain's Metro Bank swung
to a 240 million pounds ($313.92 million) loss for the first
half of the year on Wednesday, as provisions to cover loan
losses due to the coronavirus crisis wiped out its profits.

The upstart bank, founded in 2015 to take on incumbent high
street lenders, said it took a 109 million pound hit from the
COVID-19 pandemic, mostly from rising expected loan losses as
well as lower transaction fees.

The loss compared to a 3.4 million pound profit in the same
January-June period a year ago.

Metro Bank, whose shares have collapsed since it disclosed
an accounting scandal in January last year, said its
transformation plan remained on track and it grew deposits by
14% in the last year.

"While the pandemic has weighed heavily on our financial
performance, we've made early progress delivering against the
strategic priorities set out in February," Chief Executive
Daniel Frumkin said.

The lender on Monday said it has agreed to buy peer-to-peer
platform RateSetter for an initial payment of 2.5 million pounds
as it tries to improve its revenue sources.

The bank's core capital ratio, a key measure of financial
strength, fell to 14.5% from 15.6% at the end of December.

Metro Bank said it was too early to assess if the
coronavirus pandemic will impact its 2024 financial targets.
($1 = 0.7645 pounds)
(Reporting by Muvija M in Bengaluru and Lawrence White in
London, editing by Sinead Cruise)

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