Metro Bank Company Research (MTRO)

Metro Bank’s H1 results provided strong evidence of its strategy’s effectiveness. With momentum building, it has a firm base for further progress in FY25 and beyond. Profitability increased substantially in H125, and management confidently reaffirmed all previous guidance. This includes a mid- to upper-teens percentage return on tangible equity from 2027 as the transition to higher-return corporate, commercial and SME lending and specialist mortgage lending continues. Finally, management expects to be reclassified as a transfer firm in January 2026, under the changed Bank of England’s (BoE’s) MREL regime, which it believes could add c £60m to net interest income (NII) in future years. We have slightly increased our estimates for FY25–27, but remain within guidance.