Metro Bank PLC (LON:MTRO) shares jumped on Thursday as the challenger bank swung to a quarterly loss but said it was looking for “the right balance” between growth and profits.
The bank has been under fire since January's massive accounting blunder, which forced it into a £350mln equity raise and sparked investigations by UK regulators, still affecting its financial performance and reputation nine months later, with founder Vernon Hill stepping down as chairman on Wednesday.
READ: Metro Bank founder steps down early
In the three months to 30 September, Metro reported a swing to a £2mln underlying loss before tax from the £6mln underlying profit before tax in the second quarter and £15mln this time last year.
The company said the loss was due to efforts to keep “a resilient balance sheet”, including a one-off £2.5mln charge following a £521mln portfolio sale in July.
While net loans were up 13% year-on-year to £14.8bn, deposits from customers were down 4% to £14.2bn and are expected to fall further in Q4 as Metro said it is looking for “the right balance between growth, cost of deposits and capital efficiency”.
Customer accounts were 1.9mln at the end of the period, with 106,000 new registrations in Q3, bringing fee and other income up 36% quarter-on-quarter to £25mln.
“This financial performance reflects a challenging nine months for the bank,” said Craig Donaldson, who has been chief executive of the bank since its foundation in 2010.
“Despite considerable headwinds, we have made strong progress in reducing costs, increasing fee income and further strengthening our capital and liquidity position whilst also retaining our top position for overall quality of service for personal current account holders.”
The shares were up 10% to 214p on Thursday morning, still well down from the all-time high around £40 last year and the £22 in January.