Metro Bank Holdings PLC (LSE:MTRO) shares chalked up a near-40% gain on Wednesday after the lender said it expected a return to profitability over the coming months.
“Upgraded guidance includes profitability during the fourth quarter,” Metro said in interim results on Wednesday, following a £26.8 million underlying pre-tax loss over the first half.
This was down on a £33 million loss over the first six months of 2023, which Metro attributed to a lower net interest margin.
“Our upgraded guidance today reflects progress against our strategy,” chief executive Daniel Frumkin commented, including last week’s residential mortgage portfolio sale to NatWest Group PLC (LSE:NWG).
“We expect these actions to positively impact our balance sheet in the fourth quarter of the current financial year, delivering a return to profitability,” he added.
Metro carried out a cost-cutting plan earlier this year, which included the loss of around 1,000 jobs.
This came after shareholders approved a £925 million funding package in November in a bid to secure the bank’s future, leaving Colombian billionaire Jaime Gilinski as its majority shareholder.
Metro added the cuts were set to generate £80 million in savings by the end of this year.
Shares climbed 37.3% to 55.20p following the results.