How Metro Bank suffered pre-tax losses for 2021 of £245.1m

Metro Bank suffered a heavy loss last year as the high street lender put aside cash to cover fines imposed on it by UK regulators.

The bank said pre-tax losses for 2021 hit £245.1m, which was an improvement on the £311.4m loss a year earlier due to Covid-19.

But it failed to match its rivals, who have reported huge boosts in profits as they benefit from the recovering economy.

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Metro Bank said it had improved its lending mix and maximised its risk-adjusted returns on capital.

Metro Bank in Sheffield.

Bosses added they have put in place cost-cutting measures and controls to improve the institutions, and remain on track to reach a breakeven position.

An investigation remains ongoing by the Financial Conduct Authority (FCA), alongside costs as part of a restructuring and a £5.4m fine by the Bank of England - meaning a loss was reported.

Last year the Central Bank's Prudential Regulation Authority (PRA) fined Metro Bank over failings between May 2016 and January 2019 relating to its reporting and governance failures.

Chief executive Daniel Frumkin said: "Two years into the turnaround, our strategy is delivering meaningful results as we move towards profitability.

"In a changing macro-economic environment, we have accelerated the shift of our balance sheet, with improved yields and lower cost of deposits.

"There is still more to do but our focus on delivering higher margins through unsecured and specialist mortgage lending, as well as tight cost control, is enabling transformational change."

Total underlying revenues rose 17 per cent to £397.9m, with deposits up £370m to £16.5bn.

Metro Bank signed up 300,000 new customers and now has 2.5 million. Total net loans were £12.3bn, up 2 per cent on the year, although commercial loans - excluding Government support loans - fell 13 per cent to £3.2bn.

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