Member Info for 3xcogitator

Dan Frumkin, CEO:
“So we have rates built into the forecast that gets us to break even that the Bank of England base rate will be 1.4% at the end of the year. And that rate rise, which is a bit odd because a 15 basis point rate rises isn’t actually going to happen. But fine it’s what we modelled and that rate rise would occur in December. So we had basically flat rates from here that gets us to break even.”

28 Jul Transcript (Page 3):
https://www.metrobankonline.co.uk/globalassets/documents/customer_documents/business-and-commercial/transcript-of-h1-2022-results-call.pdf

BOE has lost control of inflation. Traders bet BOE will double rates in next 6 months

https://www.bloomberg.com/news/articles/2022-08-17/traders-bet-bank-of-england-will-double-rates-in-next-six-months

https://www.bloomberg.com/news/articles/2022-08-17/uk-interest-rates-may-need-to-rise-to-4-andrew-sentance-says

https://www.dailymail.co.uk/news/article-11118905/Inflation-surges-40-year-high-10-1.html

I don’t know how much its cost of deposit will need to eventually go up. The fact is that its cost of deposit is at 0.15% as of Q2:

0.15% Cost of Deposit (slide 3 or pg2):
https://www.metrobankonline.co.uk/globalassets/documents/customer_documents/business-and-commercial/results-presentation-h1-2022.pdf

The bank’s high operating expenses have to do with delighting its customers while attracting deposits at lower rates. It has been losing money in a razor thin interest rate environment, however, in this rising rate environment, Metro will have a lot more room to make money.

Potential increase in interest income over time =
12 billion loan portfolio x 2.5% rate increase = 300 million/year (179p PER SHARE)

Seems like a business model that was struggling to make good returns for shareholders is now looking a lot better.

Dec 2021 Vs. Aug 2022 prices (Metro Bank Plc Mortgage)

75% LTV 2-Year Fixed: was 2.09% Vs. now 4.59% (2.5% INCREASE)

75% LTV 5-Year Fixed: was 2.24% Vs. now 4.79% (2.55% INCREASE)

85% LTV 5-Year Fixed: was 2.99% Vs. now 4.99% (2% INCREASE)

https://www.metrobankonline.co.uk/globalassets/documents/customer_documents/personal/residential_mortgagerange.pdf

New Prices

Incoming Chief Financial Officer bought 168,000 shares.

His appointment is effective 5th of Sep.

50bps rate rise, more than three times metro’s assumption, and more rate rises to come it seems. tailwind for metro

interesting that guidance is based on a 15bps rate rise to 1.4% at the end of year.
when many are expecting either 25bps or 50bps rate rise tomorrow

Break even expected during Q1 2023 on a reported basis

Profits
Then back to growth

UK Investor Magazine

Two Inflation Winners, Bidstack and Upcoming Events with @Alan__Green

We discuss Metrobank #MTRO Rio Tinto #RIO and Bidstack #BIDS

https://ukinvestormagazine.co.uk/two-inflation-winners-bidstack-and-upcoming-events-with-alan-green/

Investec raises Metro Bank to BUY

https://www.morningstar.co.uk/uk/news/AN_1646301723286789100/london-broker-ratings-downgrades-for-hikma-pharma-and-royal-mail.aspx
https://www.sharesmagazine.co.uk/news/market/1646301723286789100/london-broker-ratings-downgrades-for-hikma-pharma-and-royal-mail
https://shareprices.com/news/london-broker-ratings-downgrades-for-hikma-pharma-and-royal-mail-xv2oaum3kkzwo41/

Robert Sharpe, the chairman, wrote his opinion in the annual report. he wrote that the bank has turned a corner.

according to the chairman, Robert Sharpe, metro bank has turned a corner.
I believe him.

BOE eases the MREL rule for smaller banks to boost competition. exciting time ahead

according to the chairman, Robert Sharpe, metro bank has turned a corner. I believe him.

no need to respond immediately to it. metro bank has turned a corner.

no, I don’t think so. no need to response

why prompt response? results wed next week.

https://www.reuters.com/world/uk/bank-england-proposes-ease-crisis-rule-smaller-lenders-2021-07-22/

https://www.bankofengland.co.uk/-/media/boe/files/paper/2021/the-boes-review-of-its-approach-to-setting-a-mrel-cp.pdf?la=en&hash=52E1314B77A402EC4AC4F16DAD2471FD389CBD51

Offwork, nice, those are the buys. can you post the total here as well. Thx