Metro Bank Holdings PLC's (LSE:MTRO) shares rose 2.3% following an upgrade from RBC, which lifted its price target to 150p from 100p.
The broker removed its speculative risk rating, signalling growing confidence in the bank’s prospects.
RBC highlights potential tailwinds from an expected increase in the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) threshold.
This regulatory change could ease capital pressures for Metro, boosting profit before tax by around 20% by 2027.
The threshold hike is anticipated imminently, possibly as soon as the Bank of England’s Financial Stability Report or the Chancellor’s upcoming Mansion House speech.
Financially, Metro Bank is on a recovery path after a challenging few years.
RBC forecasts adjusted earnings per share of 14.9p in 2026 and 26.7p in 2027, reflecting net interest income growth and improved cost efficiency. The cost-income ratio is expected to fall from 81% in 2025 to 61% by 2027, underpinning rising profitability.
The Canadian bank notes management’s strong execution in asset rotation, deposit cost control, and cost reductions.
The shares rose 3p to 133p.