Metro Bank Holdings PLC (LSE:MTRO) shares jumped over 6% after the FTSE 250-listed lender reported third-quarter profit growth and reaffirmed full-year guidance.
Lending in target areas, including corporate, commercial, SME and specialist mortgages, rose 12% versus H1 as the bank’s asset rotation strategy advanced.
Lending in target areas rose 12% from the first half to £4.84 billion, while loans in run-off books declined 9%.
Total net loans and advances to customers were £8.8 billion, up 1% from the first half of the year but down 3% compared to a year ago.
Credit quality remained strong with a highly collateralised loan book.
Net interest margin reached 3.03% by the end of the quarter, within full-year guidance.
CEO Daniel Frumkin said: "Our positive momentum has continued in the third quarter, as we delivered strong financial performance and increased lending in our key target areas of corporate, commercial and SME and specialist mortgages."
"As well as our successful asset rotation into these sectors, we have the lowest cost of deposits of any UK high street bank, and our exit net interest margin is already within full year guidance range."
He said the board expects Metro to be classified a 'transfer firm' under the Bank of England’s new policy.
This removes the need to comply with the more strenuous MREL regulations going forward, with its minimum level of equity and eligible debt only needing to be equal to its existing minimum capital requirements.
The shares rose to 116..4p in early trading, up 7.4p.