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"Following the CCyB increase, the bank is now operating within both the Tier 1 and MREL buffers and continues to strategically manage RWA allocation to ensure all regulatory minimum requirements are met and the group is able to gradually accrete capital headroom."
They have been operating within buffers for a long time, it's a delicate balancing act. See their investor calls and the most frequent question they get is around this especially around Metro perhaps needing to tap the debt markets or do a rights issue. It's one of the reasons why they offloaded their mortgage book. They are hamstrung until PRA relaxes the rules for smaller banks or they get AIRB accreditation. Getting AIRB accreditation would change regulatory capital requirements which would then free up that capital to be used for increasing revenue and profits.
Clare Gilligan only joined this year but what an impact. No comment about how it’ll stop operating within the buffers. The share price is sinking because there risk that Metro will have to tap the debt markets or do a rights issue is higher than it was, either option are expensive.
For what it's worth they also reported higher impairment charges, now around £50m, up from around £100k. But even with that and the roughly £50m fine they got for their IT glitches, they are still in profit and looking to issue a dividend to their owners. I can't imagine we'll see a dividend from Metro Bank any time soon but if they are at least break even or in small profit with a better outlook then this will fly.
If it is a short then it will show up in the FCA short positions report. Hasn’t so far, and they need to disclose in 24 hours (??) so it looks like a long position.
If they acquired that level of voting rights outside of a CFD then Metro would have skyrocketed given how tight the available short float is right now.
There’s a very strong possibility Metro outperforms, especially if they get the AIRB accreditation and we finally see something in terms of more favourable regulatory capital rules. Although, even without that we now have better NIM, an executive team with a better handle on the factors in their control, and no more overhanging investigations.
Looks positive from here (finally). Let’s see what the next update in a month or so brings.
Metro Bank published their annual report 2020
https://www.metrobankonline.co.uk/globalassets/investor-relations/metro-bank-annual-report-2020.pdf
Not had a chance to look at it yet. Perhaps there is something new of value in there though.
Yep, good signal from the Chairman. Hopefully we see some of the other c-suite follow.
It does suggest no known news is imminent from Metro, of course they could get a massive surprise but nothing they already know about which hasn't been disclosed is coming in the next month or so.
Still, I guess we have the completion of the RateSetter loan book to look forward to.
dropping to 4.48% on 08/03/2021 from 9.85%
nearly all the entries under B 2: Financial Instruments with similar economic effect according to DTR5.3.1R (1) (b) are gone with the exception of the 12/04/2021 cash swap of 7,675,465 (4.45%)