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Metro Bank to hand back £50mln competition grant as new CEO cuts back

Metro racked up losses of £131mln in 2019 with a dip in underlying revenue to £400.1mln.

Metro Bank -
An error in the way it accounted for its loans plunged it into crisis.

Metro Bank PLC (LON:MTRP) is to hand back 40% of the £120mln competition grant it was awarded last year after curbing expansion plans.

The challenger bank received the funding from BCR, the body responsible for handing out money from an RBS-funded pool to encourage banking competition.

Under a new agreement with BCR, Metro is handing back £50mln and has agreed to spend £140mln of its own money developing a digital and community bank model.

Expansion in the North has been slashed, with only 15 branches to open there by 2025 instead of the 30 originally planned.

“We've fully evaluated our strategy and have a clear plan which will return the bank to sustainable growth built around a community banking model,” said new chief executive Dan Frumkin.

He added the ‘external headwinds, internal challenges and actions we took to put the business on a more positive trajectory are reflected in the results’.

Metro racked up losses of £131mln in 2019 with a dip in underlying revenue to £400.1mln.

In a tumultuous year, its chairman and chief executive both departed after the bank was forced to raise £375m after an error in the way it accounted for its loans plunged it into crisis.

Net loans still rose slightly to £14.7bn with 71% of gross lending comprising mortgages.

Shares tumbled 8% to 175.8p.

Quick facts: Metro Bank

Price: 119.45 GBX

LSE:MTRO
Market: LSE
Market Cap: £205.96 m
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