|
Metro Bank Holdings PLC (MTRO)
Metro Bank Holdings PLC: Results for year ended 31 December
2024
27-Feb-2025 / 07:00 GMT/BST
Metro Bank
Holdings PLC
Full year
results
Trading update
2024
27 February 2025
Metro Bank
Holdings PLC (LSE: MTRO LN)
Results for year
ended 31 December 2024
|
Highlights
-
2024 statutory
profit after tax of £42.5 million, post recognition of the deferred
tax asset
-
Underlying profit
of £12.8 million in H2 2024, in excess of guidance of returning to
profitability during Q4 2024
-
Net Interest
Margin at year end of 2.65%, ahead of guidance of 2.50% and up
113bps from nadir of 1.52% in February 2024
-
Cost of deposits
at year end of 1.40%, down from a peak of 2.29% in February
2024
-
Corporate and
Commercial new loan originations grew by 71% during 2024 and by 40%
from H1 2024 to H2 2024
-
Credit approved
pipeline for corporate/commercial/SME already at >50% of total
2024 lending
-
Continued balance
sheet optimisation through the sale of £2.5 billion prime
residential mortgages and £584 million of unsecured personal
loans
-
Transformational
year in 2024 has created strong momentum; reiterating existing
guidance for 2025, 2026 and 2027
|
Daniel Frumkin, Chief
Executive Officer at Metro Bank, said:
"It has been a transformational
year for Metro Bank as we made substantial progress against our
strategy, ending the period ahead of guidance, profitable, and with
strong momentum going forward.”
“We have successfully continued our
pivot towards higher margin business in the form of corporate,
commercial and SME lending and specialist mortgages, while also
taking significant steps to reduce our costs and optimising our
funding model. We have simplified and strengthened our balance
sheet, and as a result, end the year with a robust capital
position.”
“Our network of stores helps us
grow our target markets, with our specialist relationship banking
colleagues driving positive outcomes for customers and communities
across the UK. We are delivering on our strategy. Looking forward,
we are confident that Metro Bank has a strong and compelling plan,
differentiated model and clear path forward to further
growth.”
Key Financials
|
£ in
millions
|
31 Dec
2024
|
31 Dec
2023
|
Change
from
FY
2023
|
30 Jun
2024
|
Change
from
H1
2024
|
|
|
|
|
|
|
|
|
Assets
|
£17,582
|
£22,245
|
(21%)
|
£21,489
|
(18%)
|
|
Loans
|
£9,013
|
£12,297
|
(27%)
|
£11,543
|
(22%)
|
|
Deposits
|
£14,458
|
£15,623
|
(7%)
|
£15,726
|
(8%)
|
|
Loan to deposit ratio
|
62%
|
79%
|
(17pp)
|
73%
|
(11pp)
|
|
|
|
|
|
|
|
|
CET1 capital
ratio1
|
12.5%
|
13.1%
|
(56bps)
|
12.9%
|
(36bps)
|
|
Total capital ratio (TCR)
1
|
14.9%
|
15.1%
|
(24bps)
|
15.0%
|
(14bps)
|
|
MREL ratio1
|
23.0%
|
22.0%
|
100bps
|
22.2%
|
75bps
|
|
Liquidity coverage ratio
|
337%
|
332%
|
5pp
|
365%
|
(28pp)
|
|
£ in
millions
|
FY
2024
|
FY
2023
|
Change
from
FY
2024
|
H2
2024
|
H1
2024
|
Change
from
H1
2024
|
|
|
|
|
|
|
|
|
|
Total underlying
revenue2
|
£503.5
|
£546.5
|
(8%)
|
£269.5
|
£234.0
|
15%
|
|
Underlying profit/(loss) before
tax3
|
(£14.0)
|
(£16.9)
|
17%
|
£12.8
|
(£26.8)
|
148%
|
|
Statutory profit/(loss) before
tax
|
(£212.2)
|
£30.5
|
(795%)
|
(£178.6)
|
(£33.5)
|
(433%)
|
|
Statutory profit/(loss) after
tax
|
£42.5
|
£29.5
|
44%
|
£75.6
|
(£33.1)
|
328%
|
|
Net interest margin
|
1.91%
|
1.98%
|
(7bps)
|
2.22%
|
1.64%
|
58bps
|
|
Lending yield
|
5.33%
|
4.72%
|
61bps
|
5.48%
|
5.18%
|
30bps
|
|
Cost of deposits
|
1.95%
|
0.97%
|
98bps
|
1.72%
|
2.18%
|
(46bps)
|
|
Cost of risk
|
0.06%
|
0.26%
|
(20bps)
|
0.01%
|
0.10%
|
(10bps)
|
|
Underlying EPS
|
(2.1p)
|
(8.4p)
|
75%
|
1.9p
|
(3.9p)
|
139%
|
|
Book value per share
|
£1.76
|
£1.70
|
4%
|
£1.76
|
£1.64
|
7%
|
|
Tangible book value per
share
|
£1.21
|
£1.40
|
(13)%
|
£1.21
|
£1.37
|
(12)%
|
-
Excluding recently announced unsecured
personal loans portfolio sale. Pro forma on completion of the
performing unsecured personal loans portfolio sale in late Q1 2025
is estimated to result in a total capital plus MREL ratio of 24.5%
and CET1 ratio of 13.4%
-
Underlying revenue excludes grant
income recognised relating to the Capability & Innovation
fund
-
Underlying loss before tax is an
alternative performance measure and excludes impairment and
write-off of property, plant & equipment (PPE) and intangible
assets, transformation costs, remediation costs, costs incurred as
part of the holding company insertion and costs of the capital
raise and refinancing in H2 2023
Investor
presentation
A presentation for investors and
analysts will be held at 9AM (UK time) on 27 February 2025. The
presentation will be webcast on:
https://webcast.openbriefing.com/metrobank-fy24/
For those
wishing to dial-in:
From the UK dial: +44 800
358 1035
From the US dial: +1 855 979
6654
Access code: 126674
Other global dial-in
numbers:
https://www.netroadshow.com/events/global-numbers?confId=67110
Financial
performance for the year ended 31 December 2024
Deposits
|
£ in
millions
|
31 Dec
2024
|
31 Dec
2023
|
Change
from
FY
2023
|
30 Jun
2024
|
Change
from
H1
2024
|
|
|
|
|
|
|
|
|
Demand: current accounts
|
£5,791
|
£5,696
|
2%
|
£5,662
|
2%
|
|
Demand: savings accounts
|
£7,534
|
£7,827
|
(4%)
|
£8,108
|
(7%)
|
|
Fixed term: savings
accounts
|
£1,133
|
£2,100
|
(46%)
|
£1,956
|
(42%)
|
|
Deposits from
customers
|
£14,458
|
£15,623
|
(7%)
|
£15,726
|
(8%)
|
|
|
|
|
|
|
|
|
Deposits from
customers includes:
|
|
|
|
|
|
Retail customers (excluding retail
partnerships)
|
£5,968
|
£7,235
|
(18%)
|
£7,170
|
(17%)
|
|
SMEs4
|
£4,442
|
£3,782
|
17%
|
£4,224
|
5%
|
|
|
£10,410
|
£11,017
|
(6%)
|
£11,394
|
(9%)
|
|
Retail partnerships
|
£1,785
|
£1,708
|
5%
|
£1,734
|
3%
|
|
Commercial customers (excluding
SMEs4)
|
£2,263
|
£2,898
|
(22%)
|
£2,598
|
(13%)
|
|
|
£4,048
|
£4,606
|
(11%)
|
£4,332
|
(6%)
|
|
-
SME defined as enterprises which employ
fewer than 250 persons and which have an annual turnover not
exceeding €50 million, and/or an annual balance sheet total not
exceeding €43 million and have aggregate deposits less than €1
million.
|
-
Customer deposits
reduced by 7% at 31 December 2024 to £14.5 billion, down £2.0
billion on February 2024 peak of £16.5 billion (31 December 2023:
£15.6 billion) reflecting
the deliberate focus to
reduce excess liquidity and cost of deposits. The core customer
deposit base continues to be predominantly Retail and SME. Higher
cost fixed-term deposits
have reduced by 46% year-on-year as deposits from the successful Q4
2023 deposit campaign have started to mature and are being allowed
to attrite.
|
-
Cost of deposits
for the year ended December 2024 was 1.95% (31 December 2023:
0.97%), with downward momentum and an exit cost of deposits at the
end of the year of 1.40%, down 0.89% from a February 2024 peak of
2.29%. Half-on-half cost of deposits reduced by 0.46%,
from 2.18% to 1.72%.
|
-
Stores remain a
key element to the Group’s service offering and strategy as an enabler of
our relationship-based approach. Metro Bank will open two new stores in Q2 2025
in Chester and Gateshead with a store in Salford set to open in
late 2025, with all locations selected to not only support local
consumers but to also support our growing corporate, commercial and
SME banking offer.
|
Loans
|
£ in
millions
|
31 Dec
2024
|
31 Dec
2023
|
Change
from
FY
2023
|
30 Jun
2024
|
Change
from
H1
2024
|
|
|
|
|
|
|
|
|
Gross loans and
advances to customers
|
£9,204
|
£12,496
|
(26%)
|
£11,739
|
(22%)
|
|
Less: allowance for
impairment
|
(£191)
|
(£199)
|
(4%)
|
(£196)
|
(3%)
|
|
Net loans and
advances to customers
|
£9,013
|
£12,297
|
(27%)
|
£11,543
|
(22%)
|
|
|
|
|
|
|
|
|
Gross loans and
advances to customers consists of:
|
|
|
|
|
|
|
Retail mortgages
|
£5,145
|
£7,818
|
(34%)
|
£7,512
|
(32%)
|
|
Commercial
lending5
|
£2,661
|
£2,443
|
9%
|
£2,437
|
9%
|
|
Consumer lending
|
£745
|
£1,297
|
(43%)
|
£1,003
|
(26%)
|
|
Government-backed
lending6
|
£653
|
£938
|
(30%)
|
£787
|
(17%)
|
|
-
Includes CLBILS.
-
BBLS, CBILS and RLS.
|
|
-
Total net loans
at 31 December 2024 were £9.0 billion, down 27% from 31 December
2023, primarily driven by the £2.5 billion sale of a prime
residential mortgage portfolio in H2 2024. Post period-end, Metro Bank has also
announced the sale of a £584 million performing unsecured personal
loans portfolio. The remainder of the consumer and
government-backed lending portfolios are in run-off. Loan to
deposit ratio at 31 December 2024 was 62% (31 December 2023: 79%),
providing opportunities to further optimise funding
costs.
-
Retail mortgages
decreased 34% year-on-year to £5.1 billion (31 December 2023: £7.8
billion) following the £2.5
billion mortgage loan, but
remain the largest component of the lending book at 56% (31
December 2023: 63%). The Debt to Value (DTV) of the portfolio at 31
December 2024 was 59% (31 December 2023: 58%). The pivot towards
specialist mortgages continues, following recent investment to
re-platform the mortgage business and enhance the product offering.
Metro Bank’s operating model is tailored to more complex
underwriting which enables the Group to meet the needs of more
customers and scale underserved markets whilst offering improved
risk-adjusted returns.
|
-
Commercial loans
(excluding BBLS, CBILS and RLS) increased by 9% at 31 December 2024
to £2,661 million (31 December 2023: £2,443 million)
in line with the
Group’s strategy. Growth in
new corporate, commercial and SME lending was offset by continued
attrition of commercial real estate and portfolio buy-to-let
portfolios. The DTV of the portfolio at 31 December 2024 was 56%
(31 December 2023: 55%) and the portfolio has a coverage ratio of
1.98% (31 December 2023: 2.13%). Metro Bank is committed to
supporting local businesses as we continue to pivot towards
corporate, commercial and SME lending.
-
Year-on-year
gross new Corporate and Commercial lending grew by 71% from £0.7
billion at 31 December 2023 to £1.2 billion at 31 December
2024, demonstrating that our
strategic shift into corporate, commercial and SME lending is being
delivered at pace.
|
-
Cost of risk
decreased to 0.06% at 31 December 2024 (31 December 2023:
0.26%). The overall impact
of risk profile, credit performance and macroeconomic outlook has
resulted in a lower cost of risk in the year. The credit quality of
new lending continues to be strong through the current
macro-economic environment and the Group retains its prudent
approach to provisioning.
-
Overall arrears
levels have increased to 5.6% at 31 December 2024 (31 December
2023: 3.8%). There has been
some observed crystallisation of the prior economic deterioration
on customer positions; however, this was less than previously
forecasted. The main driver for the increased arrears rate is the
sale of retail mortgage assets and the run-off of the unsecured
personal loans portfolio.
-
Non-performing
loans increased to 5.48% (31 December 2023: 3.11%)
as a result of the mortgage asset
sale (in which accounts in arrears were excluded), the maturity
profile of the unsecured personal loans portfolio that is in
run-off, new mortgage defaults primarily due to accounts moving
into 90+ day arrears, and large single name individually impaired
Commercial cases, partially offset by BBLS claims. Excluding
government-backed lending, non-performing loans were 4.78% at 31
December 2024 (31 December 2023: 2.58%).
-
The loan
portfolio remains highly collateralised and prudently
provisioned. The ECL
provision at 31 December 2024 was £191 million with a coverage
ratio of 2.07%, compared to £199 million with a coverage ratio of
1.59% at 31 December 2023. The level of post-model overlays
currently sits at 9.8% of the ECL stock, or £18.8 million. This has
reduced since 31 December 2023 (11.8% of ECL stock, or £23.4
million).
|
Profit and Loss
Account
-
Returned to
profitability, with underlying profit before tax in H2 2024 of
£12.8 million (H1 2024: loss of £26.8 million), primarily driven by improvements in net
interest income. Underlying loss before tax
at 31 December 2024 was £14.0 million (31 December 2023: £16.9
million).
-
Net interest
margin for the year ended December 2024 was 1.91% (31 December
2023: 1.98%), with an exit net interest margin of
2.65%, ahead of guidance of 2.50%
and up 1.13% from nadir of 1.52% in February 2024,
reflecting lower cost of deposits
and increased asset yields.
|
-
Underlying net
interest income decreased by 8% YoY to £377.9 million (31 December
2023: £411.9 million) driven
by increased cost of deposits in H1 2024. Half-on-half underlying net
interest income increased by 20% to £206.0 million (H1 2024:
£171.9m), reflecting the
continued transition towards higher yielding assets and a reduction
in cost of deposits.
|
-
Underlying net
fee and other income decreased YoY to £125.6 million (31 December
2023: £134.6 million), primarily reflecting increased competition within FX
markets.
|
-
Underlying costs
reduced 4%, or £19.8 million year-on-year, to £510.4 million (31
December 2023: £530.2 million). Annualised run-rate cost savings of £80 million
were successfully delivered in 2024, helping to offset inflationary
pressures and allowing capacity for investment necessary to support
the Group’s future growth plans.
|
-
Statutory loss
before tax of £212.1 million for the year ended 31 December 2024
(31 December 2023: profit of £30.5 million) was primarily driven by £101.6 million loss on
the mortgage sale, £44.0 million write-off of intangible assets,
£31.1 million in transformation costs and £21.3 million of
remediation costs that included the £16.7 million FCA
fine.
-
Statutory profit
after tax of £42.5 million at 31 December 2024 (31 December 2023:
£29.5 million) reflects
recognition of £254.6 million deferred tax asset in anticipation of
future profitability.
|
Capital, Funding and
Liquidity
|
|
|
Position
31
December
2024
|
Pro-forma
Including asset
sale
|
Position
31
December
2023
|
Minimum
requirement
including
buffers7
|
Minimum
requirement
excluding
buffers
|
|
Common Equity Tier 1
(CET1)
|
12.5%
|
13.4%
|
13.1%
|
9.2%
|
4.7%
|
|
Tier 1
|
12.5%
|
13.4%
|
13.1%
|
10.8%
|
6.3%
|
|
Total Capital
|
14.9%
|
15.9%
|
15.1%
|
12.9%
|
8.4%
|
|
Total Capital + MREL
|
23.0%
|
24.5%
|
22.0%
|
21.2%
|
16.7%
|
-
CRD IV buffers
|
-
Total RWAs at 31
December 2024 were £6.4 billion (31 December 2023: £7.5
billion). The movement
reflects the £2.5 billion sale of the prime residential mortgage
portfolio and actions taken to optimise the balance sheet. RWA
density was 36% compared to 30% at 31 December 2023 reflecting the pivot to
corporate, commercial and SME lending.
|
-
Metro Bank’s MREL
ratio was 23.0% as at 31 December 2024, up 100bps year-on-year from
22.0% as at 31 December 2023 (30 June 2024:
22.2%), reflecting ongoing
focus on capital management whilst optimising risk-adjusted returns
on regulatory capital.
-
Upon completion,
the £584 million unsecured personal loans asset sale post-period is
expected to result in a pro forma improvement in
total capital plus MREL of c152 bps to 24.5% and CET1 of c92 bps to 13.4%.
-
The bank continues to consider
opportunities to optimise the capital
structure to drive growth momentum in delivering strategy.
|
-
Strong liquidity
and funding position maintained. All customer loans are fully funded by customer
deposits with a loan-to-deposit ratio of 62% compared to 79% at the
end of 2023. This provides further opportunities to optimise
funding costs.
-
Liquidity
Coverage Ratio (LCR) was
337% compared to 332% as at 31 December 2023, with cash balances of
£2.8 billion.
-
Net Stable
Funding Ratio (NSFR) has
increased to 169% compared to 145% as at 31 December 2023, driven
by the reduction in loan advances, primarily from the £2.5 billion
mortgage portfolio sale, offset by the repayment of TFSME with sale
proceeds.
-
The Treasury portfolio of £7.3
billion includes £4.5 billion of investment securities, of
which 78%
are rated AAA and 22% are rated AA. Of the total investment securities, 92% is
held at amortised cost and 8% is held at fair value through other
comprehensive income.
-
Over the next 3 years more than £2.0
billion of fixed rate treasury assets will mature
at an average blended yield of just
over 1%, these will be replaced by asset with yields in line with
or greater than the prevailing base rate.
-
UK leverage ratio was 5.6% as at 31
December 2024 (31 December 2023: 5.3%).
|
Strong guidance
reconfirmed.
|
|
|
|
|
|
ROTE
|
-
Mid-to-upper single digit in 2025,
double digit in 2026 and mid-to-upper teens thereafter
|
|
NIM
|
-
Continued NIM expansion driven by
asset rotation, and exit NIMs in 2025, 2026 and 2027 to be between
3.00%-3.25%, 3.60%-4.00% and 4.00%-4.50%, respectively
|
|
Costs
|
-
Year-on-year 4-5% reduction in cost
for 2025
-
Cost to income ratios in 2026, 2027
and 2028 to be between 75%-70%, 65%-60% and 55%-50%
respectively
|
| |
|
|
|
|
Metro Bank Holdings
PLC
Summary Balance Sheet and
Profit & Loss Account
(Unaudited)
|
Balance
Sheet
|
YoY
change
|
|
31 Dec
2024
|
30 Jun
2024
|
31 Dec
2023
|
|
|
|
|
£'million
|
£'million
|
£'million
|
|
Assets
|
|
|
|
|
|
|
Loans and advances to
customers
|
(27%)
|
|
£9,013
|
£11,543
|
£12,297
|
|
Treasury assets8
|
|
|
£7,301
|
£8,819
|
£8,770
|
|
Other assets9
|
|
|
£1,268
|
£1,127
|
£1,178
|
|
Total
assets
|
(21%)
|
|
£17,582
|
£21,489
|
£22,245
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Deposits from customers
|
(7%)
|
|
£14,458
|
£15,726
|
£15,623
|
|
Deposits from central
banks
|
|
|
£400
|
£3,050
|
£3,050
|
|
Debt securities
|
|
|
£675
|
£675
|
£694
|
|
Other liabilities
|
|
|
£866
|
£934
|
£1,744
|
|
Total
liabilities
|
(22%)
|
|
£16,399
|
£20,385
|
£21,111
|
|
Total
shareholder's equity
|
|
|
£1,183
|
£1,104
|
£1,134
|
|
Total equity and
liabilities
|
|
|
£17,582
|
£21,489
|
£22,245
|
-
Comprises investment securities and
cash & balances with the Bank of England.
-
Comprises property, plant &
equipment, intangible assets and other assets.
|
|
YoY
change
|
|
|
|
Profit & Loss
Account
|
31 Dec
2024
|
31 Dec
2023
|
|
|
|
£'million
|
£'million
|
|
|
|
|
|
|
Underlying net interest
income
|
(8%)
|
£377.9
|
£411.9
|
|
Underlying net fee and other
income
|
(5%)
|
£125.4
|
£131.9
|
|
Underlying net gains on sale of
assets
|
|
£0.2
|
£2.7
|
|
Total underlying
revenue
|
(8%)
|
£503.5
|
£546.5
|
|
|
|
|
|
|
Underlying operating
costs
|
(4%)
|
(£510.4)
|
(£530.2)
|
|
Expected credit loss
expense
|
79%
|
(£7.1)
|
(£33.2)
|
|
|
|
|
|
|
Underlying
profit/(loss) before tax
|
17%
|
(£14.0)
|
(£16.9)
|
|
|
|
|
|
|
Impairment and write-off of
property plant & equipment and intangible assets
|
|
(£44.0)
|
(£4.6)
|
|
Transformation costs
|
|
(£31.1)
|
(£20.2)
|
|
Remediation costs
Mortgage sale
|
|
(£21.3)
(£101.6)
|
-
|
|
Capital raise and
refinancing
|
|
(£0.1)
|
£74.0
|
|
Holding company
insertion
|
|
-
|
(£1.8)
|
|
Statutory
profit/(loss) before tax
|
|
(£212.1)
|
£30.5
|
|
|
|
|
|
|
Statutory taxation
|
|
£254.6
|
(£1.0)
|
|
|
|
|
|
|
Statutory
profit/(loss) after tax
|
|
£42.5
|
£29.5
|
|
|
|
|
|
|
|
Key
metrics
|
31 Dec
2024
|
31 Dec
2023
|
|
|
|
|
|
|
Underlying earnings per share –
basic
|
|
(2.1p)
|
(8.4p)
|
|
Number of shares
|
|
672.7m
|
672.7m
|
|
Net interest margin
(NIM)
|
|
1.91%
|
1.98%
|
|
Lending yield
|
|
5.33%
|
4.72%
|
|
Cost of deposits
|
|
1.95%
|
0.97%
|
|
Cost of risk
|
|
0.06%
|
0.26%
|
|
Arrears rate
|
|
5.6%
|
3.8%
|
|
Underlying cost: income
ratio
|
|
101%
|
97%
|
|
Book value per share
|
|
£1.76
|
£1.69
|
|
Tangible book value per
share
|
|
£1.21
|
£1.40
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Half year
ended
|
|
Profit & Loss
Account
|
HoH
change
|
31 Dec
2024
|
30 Jun
2024
|
31 Dec
2023
|
|
|
|
£'million
|
£'million
|
£'million
|
|
|
|
|
|
|
|
Underlying net interest
income
|
20%
|
£206.0
|
£171.9
|
£190.4
|
|
Underlying net fee and other
income
|
2%
|
£63.4
|
£62.0
|
£68.6
|
|
Underlying net gains on sale of
assets
|
|
£0.1
|
£0.1
|
£1.9
|
|
Total underlying
revenue
|
15%
|
£269.5
|
£234.0
|
£260.9
|
|
|
|
|
|
|
|
Underlying operating
costs
|
0%
|
(£255.8)
|
(£254.6)
|
(£272.0)
|
|
Expected credit loss
expense
|
|
(£0.9)
|
(£6.2)
|
(£21.9)
|
|
|
|
|
|
|
|
Underlying
profit/(loss) before tax
|
148%
|
£12.8
|
(£26.8)
|
(£33.0)
|
|
|
|
|
|
|
|
Impairment and write-off of
property plant & equipment and intangible assets
|
|
(£43.7)
|
(£0.3)
|
(£4.6)
|
|
Transformation costs
|
|
(£26.6)
|
(£4.5)
|
(£20.2)
|
|
Remediation costs
|
|
(£19.5)
|
(£1.8)
|
(£0.8)
|
|
Mortgage sale
|
|
(£101.6)
|
-
|
-
|
|
Capital raise and
refinancing
|
|
-
|
(£0.1)
|
£74.0
|
|
Holding company
insertion
|
|
-
|
-
|
(£0.3)
|
|
Statutory
profit/(loss) before tax
|
|
(£178.6)
|
(£33.5)
|
£15.1
|
|
|
|
|
|
|
|
Statutory taxation
|
|
£254.2
|
£0.4
|
£1.7
|
|
|
|
|
|
|
|
Statutory
profit/(loss) after tax
|
|
£75.6
|
(£33.1)
|
£16.8
|
|
|
|
Half year
ended
|
|
Key
metrics
|
31 Dec
2024
|
30 Jun
2024
|
31 Dec
2023
|
|
|
|
|
|
|
|
|
Underlying earnings per share –
basic
|
|
1.9p
|
(3.9p)
|
(12.2p)
|
|
|
Number of shares
|
|
672.7m
|
672.7m
|
672.7m
|
|
|
Net interest margin
(NIM)
|
|
2.22%
|
1.64%
|
1.85%
|
|
|
Lending yield
|
|
5.48%
|
5.18%
|
4.91%
|
|
|
Cost of deposits
|
|
1.72%
|
2.18%
|
1.29%
|
|
|
Cost of risk
|
|
0.01%
|
0.10%
|
0.34%
|
|
|
Arrears rate
|
|
5.6%
|
3.8%
|
3.8%
|
|
|
Underlying cost:income
ratio
|
|
95%
|
109%
|
104%
|
|
|
Book value per share
|
|
£1.76
|
£1.64
|
£1.70
|
|
|
Tangible book value per
share
|
|
£1.21
|
£1.37
|
£1.40
|
|
|
Risk weighted assets
(RWAs)
|
|
£6,442m
|
£7,239m
|
£7,533m
|
|
|
Risk weight density (RWAs / total
assets)
|
|
36.6%
|
35.9%
|
33.9%
|
|
| |
|
|
|
|
|
Enquiries
For more information, please
contact:
Metro Bank PLC
Investor Relations
Stella Gavaletakis
+44 (0) 20 3402 8900
IR@metrobank.plc.uk
Metro Bank PLC
Media Relations
Victoria Gregory
+44 (0) 7773 244608
pressoffice@metrobank.plc.uk
FGS
Global
Chris Sibbald
+44 7855 955 531
Metrobank-lon@fgsglobal.com
ENDS
About Metro
Bank
Metro Bank is celebrated for its
exceptional customer experience. It holds the number two spot for
personal and business service instore in the Competition and
Markets Authority’s Service Quality Survey in February
2025.
Since 2012, Metro Bank has
originated and approved just over £10bn in commercial
lending.
The community bank offers retail,
business, commercial and private banking services, and prides
itself on giving customers the choice to bank however, whenever and
wherever they choose, and supporting the customers and communities
it serves. Whether that’s through its network of 76 stores; on the
phone through its UK-based contact centres; or online through its
internet banking or award-winning mobile app, the bank offers
customers real choice.
Metro Bank is a multi-award-winning
organisation.
The Bank has also been awarded
“Large Loans Mortgage Lender of the Year”, 2024 and 2023 Mortgage
Awards, accredited as a top ten Most Loved Workplace 2023, “2023
Best Lender of the Year – UK” in the M&A Today, Global Awards,
the “Inclusive Culture Initiative Award” in the 2023 Inclusive
Awards, “Diversity, Equity & Inclusion Award” and “Leader of
the Year Award 2023” at the Top 1% Workplace Awards, “Best Women
Mortgage Leaders in the UK” from Elite Women 2023, “Diversity Lead
of the Year”, 2023 Women in Finance, Best Large Loan Lender, 2023
Mortgage Strategy Awards,, “Best Business Credit Card”, Forbes
Advisor Best of 2023 Awards, “Best Business Credit Card”, 2023
Moneynet Personal Finance Awards.
Metro Bank Holdings PLC (registered
in England and Wales with company number 14387040, registered
office: One Southampton Row, London, WC1B 5HA) is the listed entity
and holding company of Metro Bank PLC.
Metro Bank PLC (registered in
England and Wales with company number 6419578, registered office:
One Southampton Row, London, WC1B 5HA) is authorised by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority and Prudential Regulation Authority. ‘Metrobank’
is a registered trademark of Metro Bank PLC. Eligible deposits are protected by the
Financial Services Compensation Scheme. For further information
about the Scheme refer to the FSCS website www.fscs.org.uk. All
Metro Bank products are subject to status and approval.
Metro Bank is an independent UK
bank – it is not affiliated with any other bank or organisation
(including the METRO newspaper or its publishers) anywhere in the
world. Please refer to Metro Bank using the full name.
Metro Bank Holdings PLC
Preliminary Announcement
(Unaudited)
For the year ended 31 December 2024
Chief Executive Officer’s statement
2024 has been a transformational year for Metro Bank.
We have made significant progress in creating a simpler, more agile
Bank and continued, at pace, the strategic shift towards corporate,
commercial, and SME lending, and specialist mortgages – a
compelling opportunity in an underserved area of the
market.
We have delivered on an ambitious transformation, delivering £80
million annualised run rate cost savings in FY 2024- primarily from
reducing on-shore headcount numbers by more than 30% from 4,458 to
2,972. These cost savings helped offset headwinds and created
capacity for investment to support future growth. In Q4 2024, we
announced a new partnership with Infosys, a world leader in
strategic outsourcing, to enhance digital capabilities, improve
automation, and embed further AI capabilities.
We continued to optimise the balance sheet, including a £2.5
billion sale of prime residential mortgages in Q3 2024 and a £584
million sale of unsecured personal loans announced post year-end.
Both transactions are in line with Metro Bank’s strategy to
reposition its balance sheet, actively manage the asset rotation
and enhance risk-adjusted returns on capital. The transactions
create additional lending capacity to enable Metro Bank to continue
its shift towards higher yielding corporate, commercial, and SME
lending, and specialist mortgages.
We delivered strong growth momentum supporting our strategy, with
corporate, commercial and SME gross new lending growing by 71%
year-on-year. Effective asset rotation has also allowed us to
actively manage down excess liquidity, particularly expensive
fixed-term deposits, resulting in a significant reduction in cost
of deposits throughout the year. Underlying momentum in the
franchise remains strong, with 110,000 new personal and 36,000 new
business current accounts opened in the year.
Successful operational execution has resulted in Metro Bank
outperforming the 2024 guidance and reconfirming all guidance
previously provided at half-year results, building to best-in-class
performance:
-
Underlying
profit of £13m in H2’24, beating guidance of profitability during
the 4th quarter
-
Net interest
margin at year-end was 2.65%, beating guidance of 2.50%
-
Cost savings
delivered
-
RoTE
guidance reconfirmed to mid to upper single digit in 2025, double
digit in 2026 and mid to upper teens thereafter
-
Continued
NIM expansion driven by asset rotation and cost of deposits, with
2025 exit run-rate expected to be between 3.00%-3.25%, 3.75%-4.00%
in 2026 and 4.00-4.50% in 2027, respectively
-
Continued
cost discipline and control, guiding to a 4-5% year-on-year
reduction in costs for 2025. Cost to income ratio improves to be
between 75%-70% in 2026, 65%-60% in 2027 and 55%-50% in
2028
Delivery in 2024 provides strong
growth momentum and proves Metro Bank’s ability to deliver on an
ambitious future strategy. By 2027, we remain committed to
generating one of the best returns on tangible equity of any UK
High Street bank.
Progress on
Strategic Priorities
Revenue
We made strong progress in the
strategic shift toward corporate, commercial, and SME lending, and
specialist mortgages in the year. Corporate, commercial and SME
gross new lending grew by 71% year-on-year, and we ended 2024 with
a credit approved pipeline which was two times larger than at the
start of 2024. 78% of new Corporate and Commercial lending was
non-broker led, c.30% of this came from refinancing existing
customers. On average, new originations attracted a margin in
excess of 350 bps over base rate, driving year-on-year improvements
in yield. Progress in specialist mortgage originations was strong,
with the launch of new propositions helping drive a significant
increase in spread over swaps on new mortgage originations. New
lending, together with attrition of legacy portfolios at lower
yields, has led to a 61 bps year-on-year improvement in overall
lending yield.
Following our successful deposit
campaign at the end of 2023, we have observed a subsequent decline
in balances as we optimise our deposits and cost of funding. The
cost of deposits at year-end of 1.40% continues to fall, down from
a peak of 2.29% in February 2024, as more expensive fixed term
deposits are allowed to attrite.
The combined impact of increased
lending yields and a lower cost of deposits has resulted in an exit
NIM of 2.65%, ahead of guidance of 2.50%, and up 1.13% from nadir
of 1.52% in February 2024.
Cost
Over the past year, we have
fundamentally transformed our cost base, reducing operating costs
in line with a bank of our size and driving towards sustained
profitability. We continue to take a disciplined approach to costs,
with underlying costs down YoY by 4%, despite inflationary
pressures. We have delivered £80 million of annualised run rate
cost savings in FY 2024, after reducing on-shore headcount numbers
by > 30% from 4,458 to 2,972 within 12 months. We fundamentally
repositioned our store and call centre propositions in line with
customer usage patterns, and enhanced cost control frameworks. We
have driven efficiencies across the business. Metro Bank
established a strong strategic partnership with Infosys to enhance
digital capabilities, improve automation, refine data, and embed
further AI capabilities. This collaboration has helped make the
Metro Bank model more scalable.
Infrastructure
To drive our next stage of growth,
we have strategically invested in platforms and capabilities.
Central to this is a partnership with Infosys which will
revolutionise our digital capabilities, including actionable data
analytics, automated processes, and compelling digital
platforms.
Our redesigned store offering
empowers colleagues to drive growth in the SME and commercial
segments. We are on track to continue our store openings in the
North of England, with new stores planned for Chester, Gateshead
and Salford in Q2 2025. The store proposition has been streamlined
to drive efficiency and improve the customer experience. Back-end
processes, particularly around lending and digital customer
onboarding, have also been improved key customer interactions.
Lastly, we have built a range of new products and platforms, such
as online chat and an enhanced business overdraft via mobile app
which will enable customers to engage with us how they want. We
also implemented over 450 technical changes to systems, products
and infrastructure – even more than last year – along with
upgrading our financial crime architecture, fraud tools, and our
new first line risk function.
The bank also resolved the FCA’s
enquiries into transaction monitoring systems and controls that
began in 2016 and were remediated by 2020. The conclusion of these
enquiries draws a line under this legacy issue, allowing the bank
to move forward and fully focus on the future, building on the
solid foundations it has already laid.
Balance sheet optimisation
We have made significant progress
in restructuring our balance to align with strategic growth
opportunities, including a £2.5 billion sale of prime residential
mortgages in Q3 2024 and £584 million sale of unsecured personal
loans post year-end. The mortgage sale proceeds were used to repay
TFSME[1],
providing further opportunity to continue optimising our funding
capabilities. Both transactions are in line with Metro Bank’s
strategy to reposition its balance sheet, actively manage the asset
rotation and enhance risk-adjusted returns on capital.
Following the successful deposit
campaign in Q4 2023, we have worked to reduce our cost of funds and
excess liquidity. Overall, customer deposits reduced by 7% at 31
December 2024 to £14.5 billion, down £2.0 billion on February 2024
peak of £16.5 billion (31 December 2023: £15.6 billion) reflecting
the deliberate focus on reducing excess liquidity and cost of
deposits. The core deposit base continues to be predominantly
Retail and SME. Higher cost fixed-term deposits have reduced by 46%
year-on-year as deposits from the successful Q4 2023 deposit
campaign have started to mature and are either being allowed to
attrite.
Communications
We continue to focus on engaging
our colleagues, communities and other
stakeholders.
Our focus on delivering excellent
customer service is reflected in the latest independent Competition
and Markets Authority survey where we
ranked number two for
in-store service quality for retail customers, an increase from
third place in August 2024. We were also placed second for service
quality in stores and our business service centres for business
customers. We remain
committed to maintaining a physical presence and ensuring that
stores remain both accessible and at the heart of local
communities. We
will be opening three new stores in 2025 in Chester, Gateshead and
Salford.
Following a year of transformation,
we are a leaner organisation, and as part of our continuous
improvement, we will keep creating an environment where colleagues
can grow, thrive and be their true authentic
selves.
We continue to focus on our culture
of promoting from within, with over 55% of the positions in the
year filled by colleagues being promoted or moving around the
business. Given our strategic focus on SME/Commercial lending, we
have hired additional staff into Corporate and Commercial
relationship and credit teams to drive our next stage of
growth.
Our ECB partnership went from
strength to strength, as we continue to be committed to growing
Women’s and Girls’ Cricket. We launched Metro Bank Girls in Cricket
Fund contributing in one year to 21% increase in number of girls’
teams. We also launched our Relationship Banking specialists’ brand
positioning to ensure we are uniquely positioned to serve our
Corporate, Commercial and SME customers.
Capital
Our capital position continues to strengthen, with the Bank’s MREL
ratio 23.0% as at 31 December 2024, up 100bps year-on-year from
22.0% as at 31 December 2023, reflecting the mortgage sale and
ongoing focus on capital management whilst optimising risk-adjusted
returns on regulatory capital.
Post completion of the personal unsecured loan portfolio sale, the
pro forma total capital plus MREL ratio will increase from 23.0% to
24.5% and CET1 will increase from 12.5% to 13.4%. The additional
lending capacity provided by this sale will enable us to continue
our shift into high yielding assets in niche and underserved
markets and become a specialist lender of
choice.
We continue to consider opportunities to optimise capital structure
to continue to drive growth momentum as seen during 2024,
facilitating delivery of our strategy.
[1] Bank of England
Term Funding Scheme with additional incentives for SMEs
Looking ahead
2024 has been a pivotal year for Metro Bank. We outperformed market
guidance and delivered an ambitious transformation plan. But we
know the work is not done if we are to realise our ambition of
generating one of the best returns on tangible equity of any UK
High Street bank by 2027.
As we move into 2025, we are focussed on continuing to grow
higher-yielding corporate, commercial, and SME and specialist
mortgages, whilst optimising deposits to lower cost of funds and
grow revenue.
All while maintaining a focus on cost discipline, and a prudent
approach to credit risk. With a strong capital base, a growing
customer base, and a clear path for future growth, Metro Bank is
well-positioned to capitalise on the opportunities
ahead.
Finance review
Summary of the year
2024 was an important year as we pivoted our focus to commercial
and specialist lending and took proactive steps across the bank to
position ourselves for further growth and future profitability in
the coming years.
For the full year ended 31 December 2024, we recorded an underlying
loss before tax of £14.0 million, a reduction of 17% from £16.9
million as at 31 December 2023 reflecting the commitment to greater
cost discipline and a transition to a leaner, more agile operating
model designed to most effectively support our customers and better
position the bank for profitability.
We recognised a statutory loss before tax of £212.1 million for the
full year, largely driven by a one-off loss on the sale of a £2.5
billion mortgage portfolio to NatWest Group Plc and various charges
relating to the transformation of the business and remediation
costs. However, we recognised an underlying profit of £12.8 million
in H2 (H1: loss of £26.8 million) that supported a forecast
indicative of future profits. We recognised a deferred tax asset on
unused tax losses and subsequently recorded a statutory profit
after tax of £42.5 million for the full year (2023: £29.5
million).
Our proactive and positive management of our balance sheet and our
dedication to the cost reduction programme we outlined at the
beginning of the year support the future prosperity of a profitable
bank and position us well looking into 2025.
Income statement
|
|
2024
£m
|
2023
£m
|
Change
%
|
|
Underlying net interest income
|
377.9
|
411.9
|
(8%)
|
|
Underlying non-net interest income
|
125.6
|
134.6
|
(7%)
|
|
Total underlying revenue
|
503.5
|
546.5
|
(8%)
|
|
Underlying operating expenses
|
(510.4)
|
(530.2)
|
4%
|
|
Expected credit loss expense
|
(7.1)
|
(33.2)
|
79%
|
|
Underlying loss before tax
|
(14.0)
|
(16.9)
|
17%
|
|
Non-underlying items
|
(198.1)
|
47.4
|
(518%)
|
|
Statutory (loss)/profit before tax
|
(212.1)
|
30.5
|
(796%)
|
|
Taxation
|
254.6
|
(1.0)
|
256%
|
|
Statutory profit after tax
|
42.5
|
29.5
|
44%
|
Interest income
Interest income benefitted from a higher average base rate during
the period, increasing 9% to £935.4 million (2023: £855.7 million).
Lending income continues to make up the largest proportion of our
interest income though following the sale of our mortgage portfolio
has decreased marginally to £586.2 million (2023: £599.9
million).
Asset yields increased to to 4.17% (2023: 3.37%) as we pivoted
towards more specialist mortgages and sold £2.5 billion of prime
residential mortgages. Our remaining retail mortgages are 90% fixed
with an average time to reversion of 2.23 years (31 December 2023:
2.41 years). We expect to see further improvements to asset yields
and associated income in the years ahead as older balances roll-off
and are replaced with new lending at a higher rate.
Our commercial lending portfolio income grew, predominantly driven
by our floating business loans which have seen greater yields as a
result of the higher base rate environment, as well as the
continued attrition of lower-yielding commercial real estate. The
Consumer and Government-backed lending portfolios are in run-off as
the Group continues to pivot its strategy towards commercial,
corporate and SME lending, and specialist mortgages.
We also saw the benefits of increased rates flowing through to our
floating treasury portfolio, as well as the fixed rate treasury
assets maturing at an average blended yield of 1% and replaced by
assets in line with base rate.
Interest expense
Interest expense increased 126% to £557.5 million (2023: £443.8
million). This increase reflected an increase in cost of deposits
that followed our deposit campaign in Q4 2023. We sought to
increase deposit inflows by launching a range of products such as
Instant Access accounts at competitive rates, the impact of which
has materialised in 2024 where the average cost of deposits
increased to 1.95% (2023: 0.97%) as a result. We actively managed
down the costly deposits in the latter half of the year reducing
the average cost of deposits from 2.18% as at 30 June 2024 to 1.72%
at 31 December 2024.
In January 2024, we repaid a £255 million repurchase agreement with
NatWest Group Plc, reducing the associated interest expense for the
year.
We continue to see the impact of the increased cost of funding
following our repricing and restructuring of debt securities in
2023. The successful debt refinancing strengthened our balance
sheet and enabled us to embed our strategy to pivot to specialist
and commercial lending throughout 2024. The launch of products such
as Limited Company Buy-to-let represented the realization of our
revised strategy and the enablement to enhance future earnings
through asset growth and risk adjusted returns.
Non-interest income
Net fee and commission income has increased by £2.8 million to
£93.2 million in 2024 (2023: £90.4 million), reflecting nation-wide
use of Metro Bank products including safe deposit boxes and Metro
Bank cards. Both safe deposit box income and ATM and interchange
income remained fairly static at £19.0m and £40.4 million
respectively (2023: £18.2 million and £40.0 million). Service
charge and other fee income grew by £1.8 million to £38.6 million
(2023: £36.8 million) providing a valuable source of income, whilst
having minimal impact on our capital ratios.
Operating expenses
|
|
2024
|
2023
|
|
Underlying cost:income ratio
|
101%
|
97%
|
|
Statutory cost:income ratio
|
151%
|
90%
|
In Q4 2023, we committed to a cost reduction plan to support a
return to sustainable profitability. Despite inflationary
pressures, we have seen this disciplined approach to cost
management materialise into a 4% improvement in underlying
operating expenses, year on year and a decrease in general
operating expenses from £502.9 million in 2023 to £489 million in
2024.
People related costs remain our biggest contributor to operating
expenses but reduced to £209.6m in 2024 (2023: £241.2 million)
following successful implementation of restructuring plans. This is
offset partially by an increase in transformation costs. We expect
a similar trend going into 2025 as we move to a simpler, more agile
operating model. The provision for the restructure is recognized as
a non-underlying item.
Professional fees increased by 16% to £27.7 million (2023: £23.2
million) as we prioritised digital enablement and enhancement to
deliver customer initiatives.
Information technology costs remained broadly flat at £60.1 million
(2023: £59.7 million) reflecting investment into digitizing and
improving new and existing products and making internal processes
more efficient.
Occupancy expenses are driven by costs associated with our
continued store presence. Despite inflationary pressures, costs
remained broadly flat at £30.9 million (2023: £31.7 million)
reflective of our disciplined approach to cost
management.
We seek to continuously exercise discipline around cost whilst
acknowledging the costs associated with greater investment in
diversifying our product capabilities to both boost deposits and
transition further into specialist lending. We value our
relationship-centric approach to banking and will continue to drive
proactive cost management whilst maintaining and growing our
physical presence.
Non-underlying items
|
|
2024
£m
|
2023
£m
|
Change
%
|
|
Impairment and write-off of property, plant, equipment and
intangible assets
|
(44.0)
|
(4.6)
|
(857%)
|
|
Remediation costs
|
(21.3)
|
–
|
n/a
|
|
Transformation costs
|
(31.1)
|
(20.2)
|
(54%)
|
|
Mortgage portfolio sale
|
(101.6)
|
-
|
n/a
|
|
Holding company insertion costs
|
-
|
(1.8)
|
n/a
|
|
Cost of capital raise1
|
(0.1)
|
-
|
n/a
|
|
Non-underlying items
|
(198.1)
|
47.4
|
(518%)
|
-
Relates to capital raise in Q4
2023.
We have recognised non-underlying items of £198.1 million in 2024
(2023: income of £47.4 million) driven by a loss on the sale of a
£2.5 billion mortgage portfolio, write off’s and impairments of £44
million in relation to intangible assets, and the costs associated
with restructuring.
The sale of the mortgage portfolio provides us with additional
lending capacity to enable a further shift to high yielding assets
in niche markets, supporting our strategic focus to become a
specialist lender of choice.
Transformation costs consist primarily of the costs associated with
restructuring, specifically movements to appropriately size the
bank and
make operations and support services more agile and efficient going
forward.
Remediation costs refer to any and all costs associated with legal
or professional proceedings such as the sale of the mortgage
portfolio and the final conclusion of FCA enquiries.
At the end of 2024, we wrote off the outstanding net book value of
a number of intangible assets as at 31 December 2024. The larger
proportion of the balance related to RateSetter and AIRB platforms
where we have ceased lending through our RateSetter brand and not
achieved AIRB status as originally expected.
Expected credit loss expense
|
31 December 2024
|
ECL Allowance
£m
|
Coverage ratio
%
|
Non-performing loan ratio
%
|
|
Retail mortgages
|
15
|
0.29%
|
3.93%
|
|
Consumer lending
|
108
|
14.43%
|
13.15%
|
|
Commercial
|
68
|
2.06%
|
6.16%
|
|
Total lending
|
191
|
2.07%
|
5.48%
|
|
31 December 2023
|
|
|
|
|
Retail mortgages
|
19
|
0.24%
|
1.87%
|
|
Consumer lending
|
108
|
8.33%
|
5.94%
|
|
Commercial
|
72
|
2.13%
|
4.91%
|
|
Total lending
|
199
|
1.59%
|
3.11%
|
We recognised an expected credit loss expense of £7.1 million in
2024 (2023: £33.2 million) primarily due to improvements in the
proportion of commercial lending balances in stage 2 and 3. Some
deterioration has been noted in the outstanding retail lending
balances due to the macroeconomic environment including lower house
prices, increased cost of living and higher interest rates. We
recognised management overlays and adjustments of £18.74 million
(2023: £23.4 million) which represents 10% of ECL stock (31
December 2023: 12%). As at 31 December 2024, our coverage ratio was
2.07% (2023: 1.59%) and we believe we remain appropriately provided
at this stage in the economic cycle.
Balance sheet
Lending
|
|
31 December
|
|
|
|
2024
£m
|
2023
£m
|
Change
%
|
|
Retail mortgages
|
5,145
|
7,817
|
(34%)
|
|
Consumer lending
|
745
|
1,297
|
(43%)
|
|
Commercial
|
3,314
|
3,382
|
(2%)
|
|
Gross lending
|
9,204
|
12,496
|
(26%)
|
|
ECL allowance
|
(191)
|
(199)
|
4%
|
|
Net lending
|
9,013
|
12,297
|
(27%)
|
Net loans and advances to customers ended the year at £9,013
million, down 27% from £12,297 million as at 31 December 2023, in
large part driven by the sale of the mortgage portfolio. As a
result, retail mortgages represented a smaller proportion of our
lending base than in previous years, 56% compared to 63% as at 31
December 2023, as we pivoted our strategy to commercial and
specialist lending.
The consumer portfolio has decreased from £1,189 million at the end
of 2023, to £637 million on a net basis as at 31 December 2024
driven by the cessation of lending through the RateSetter brand,
further supporting our strategic transition.
Commercial lending has reduced by a smaller margin than retail and
consumer lending, representing a greater proportion of our overall
lending base, 36% as at 31 December 2024 compared to 28% as at 31
December 2023. Net position is down to £3,246 million as at 31
December 2024 (31 December 2023: £3,310 million) driven by a run
off of government backed lending and Professional Buy to let but is
offset by more core commercial lending.
Throughout 2024, we have supported our shift to commercial and
specialist lending by digitalizing more products and launching
products such as Limited Company Buy-to-let. As we look forward to
2025, commercial lending will be a focus for us specifically those
parts of the market where our manual underwriting capacity present
a competitive advantage.
Treasury portfolio
Over the year we have continued to optimise our treasury portfolio
to maximise our risk adjusted return on regulatory capital,
particularly as rates have risen. We ended the year with £7,301
million of treasury assets (31 December 2023: £8,770 million),
comprising £4,490 million investment securities and £2,811 million
cash and balances at the Bank of England (31 December 2023: £4,879
million and £3,891 million respectively). Our investment securities
remain high quality and liquid with 75% being either AAA-rated or
gilts (31 December 2023: 75%).
Other assets
Property, plant and equipment ended the year at £711 million, down
from £723 million as at 31 December 2023. No new store openings
took place in 2024 though we remain committed to identifying
appropriately sized sites in the North of England that are
conveniently located for surrounding businesses. We obtained the
freehold of two more stores in 2024, a more cost-effective way of
delivering our store-based service-led model.
Intangible assets have decreased to £126 million,
down from £193 million in 2023, reflecting a more selective
approach to investments and write offs including the RateSetter
platform in line with the cessation of our RateSetter brand and the
AIRB platform. Our investments in 2024 have included Mobile Live
Chat and Online Self-serve.
Deposits
|
|
31 December
|
|
|
|
2024
£m
|
2023
£m
|
Change
%
|
|
Retail customer (excluding retail partnerships)
|
5,968
|
7,235
|
(18%)
|
|
Retail partnership
|
1,785
|
1,708
|
5%
|
|
Commercial customers (excluding SMEs)
|
2,263
|
2,898
|
(22%)
|
|
SMEs
|
4,442
|
3,782
|
(17%)
|
|
Total customer deposits
|
14,458
|
15,623
|
(7%)
|
|
Of which:
|
|
|
|
|
Demand: current accounts
|
5,791
|
5,696
|
2%
|
|
Demand: savings accounts
|
7,534
|
7,827
|
(4%)
|
|
Fixed term: savings accounts
|
1,133
|
2,100
|
(46%)
|
We are committed to being a relationship-focused deposit-driven
bank. We ended the year with deposits of £14,458 million (31
December 2023: £15,623 million), a decrease of 7% year on year.
Macroeconomic conditions remained a contributing factor as we
entered 2024 but the deposit campaign at the end of 2023 helped to
manage this reduction whilst increasing the overall cost of
deposits.
Our overall deposit base remains diversified with a 54%:46% between
retail and commercial customers (31 December 2023: 57%:43%) with
growth noted within the SME and retail partnership areas, a trend
we expect to see continue in 2025.
Wholesale funding
In 2024, we significantly reduced our TFSME balance from £3,050
million to £400 million, utilizing the proceeds of our mortgage
portfolio sale to NatWest Group Plc to fund the reduction, to repay
our holding early.
Taxation
We recorded a tax credit of £255 million (2023: £1.0 million tax
charge) in the year.
We've recognised DTA on unused tax losses totalling £1,073 million
which equated to a DTA of £268 million. £13 million was already
recognised so the credit to the income statement in 2024 was £255
million.
The future profit projections as per the board approved long-term
plan support the recognition of the deferred tax asset. There is no
time limit on the utilisation of tax losses.
Liquidity
Our liquidity position remains strong and in excess of regulatory
minimum requirements despite efforts being made to reduce the more
costly deposits. We ended the year with a liquidity coverage ratio
of 337% (31 December 2023: 332%) and a net stable funding ratio of
169% (31 December 2023: 145%).
We hold large amounts of high-quality liquid assets totalling
£6,071 million (2023: £6,656 million). This included £2,811 million
of cash held at the Bank of England (2023: £3,891
million).
Capital
|
|
2024
£m
|
2023
£m
|
Change
|
|
CET1 capital1
|
808
|
985
|
(18%)
|
|
RWAs
|
6,442
|
7,533
|
(14%)
|
|
CET1 ratio1
|
12.5%
|
13.1%
|
(0.6%)
|
|
Total regulatory capital ratio1
|
14.9%
|
15.1%
|
(0.2%)
|
|
Total regulatory capital + MREL ratio1
|
23.0%
|
22.0%
|
1.0%
|
|
UK regulatory leverage ratio1
|
5.6%
|
5.3%
|
0.3%
|
-
All the capital figures as at
31 December 2024 are presented on a proforma basis, including our
profit for the year. The profit will only be eligible to be
included in our capital resources following the completion of our
audit and publication of our Annual Report and
Accounts.
We ended the year with CET1, total capital and total capital plus
MREL ratios of 12.5%, 14.9% and 23.0% respectively (31 December
2023: 13.1%, 15.1% and 22%), above regulatory minima, including
buffers (excluding any confidential buffers, where applicable), of
9.2%, 10.8% and 21.2%.
We noted improvements in our total capital plus MREL ratio in
excess of those expected as part of the capital raise, as we
actively constrained lending in an effort to preserve capital. The
sale of a portfolio of £2.5 billion of prime residential mortgages
to NatWest Group PLC in Q3 24 demonstrated further commitment to
Metro Bank’s strategy to reposition its balance sheet and enhance
risk-adjusted returns on capital. The transaction was capital ratio
accretive and created additional lending capacity to enable Metro
Bank to continue its asset rotation.
We ended the year with risk-weighted assets of £6,442 million (31
December 2023: £7,533 million), reflecting the proactive steps to
effectively manage our capital position for positive future
growth.
Looking ahead
We took proactive steps to position ourselves for future growth
throughout 2024 and will continue to build on that progress as we
enter 2025.
We will integrate our agile working model in collaboration with
Infosys as we simplify and digitise our ways of working to maintain
strong cost discipline.
We will continue to prioritise a reduction in cost of deposits
whilst remaining committed to positive and meaningful relationships
with our customers opening new stores and offering more specialist
products.
Risk summary
This year there has been a clear risk focus on safely supporting
the Bank as it executes a programme of strategic change and
transformation. Alongside our continued management of
business-as-usual risks, this has positioned the Bank to deliver
its growth objectives.
Approach to risk management
Our risk management framework underpins our ability to safely
deliver, ensuring risks are carefully considered when making
decisions and are managed within acceptable limits on an ongoing
basis. It sets out the tools and techniques used to manage each of
our principal risks within our stated appetite.
Risk management is a key aspect of every colleague’s objectives and
is embedded within our scorecard, against which performance
is
measured. We work to create an environment in which colleagues are
encouraged and able to raise concerns and act to meet all
applicable legal and regulatory requirements and maintain
constructive relationships with our regulators.
We operate a ‘three lines of defence’ model of risk management and
by leveraging well-defined governance structures and processes,
promote individual accountability and action in mitigating our risk
exposures.
Risk environment in 2024
The 2024 risk agenda has been framed by the need to safely execute
on the Bank’s transformation initiatives whilst continuing to
manage business-as-usual risks.
Whilst some of our risk exposures have changed, measures taken have
ensured these have been managed within our risk appetite. The
Bank’s resilience has been maintained and we remain focused on
ensuring our customers receive good outcomes. Achieving these
objectives has guided strategic decision-making and is at the heart
of the value proposition for our new partnership with
Infosys.
Greater macroeconomic stability including a decline in inflation
has supported a reduction in expected credit losses,
partially offset by run-off
of the personal loan and credit card portfolios and limited arrears
and defaults in the retail mortgage portfolio.
Capability is being put in place to support targeted lending growth
objectives, including risk expertise to safely expand into higher
yielding specialist mortgage lending and capabilities in commercial
underwriting. Plans are in place to scale this capability in line
with delivery of commercial objectives.
We have continued to actively manage our capital position including
through the successful sale of a portion of our residential
mortgage book in the second half of the year. This supported the
Bank’s strategy to enhance risk-adjusted returns and to increase
capacity for future lending. Maintaining capital above regulatory
requirements and to support strategic growth remains a key focus
for the Bank.
Work has been completed to establish and embed the Bank’s approach
to meeting the FCA’s Consumer Duty. This remains a key priority
subject to ongoing close monitoring and enhancement. This year we
also completed the third operational resilience self-assessment
which demonstrated further maturity in our approach and capability
in line with FCA and PRA regulatory requirements. Alongside, we
have continued to comprehensively risk assess our key third party
relationships including our partnership with Infosys, the success
of which is a key growth enabler.
The FCA concluded their enquiries into the Bank’s historic
transaction monitoring systems and controls in place between 2016
and 2020. Since then, the Bank has invested in transaction
monitoring enhancements and management of financial crime risk
remains a key priority. Progress has been made in strengthening our
financial crime controls, including through establishing enhanced
central operational and risk management capabilities. Responding to
the dynamic external threat, we have also invested further in our
fraud systems and controls to safeguard our customers and
funds.
Principal risk exposures
On an ongoing basis, we assess our risks against risk appetite,
including those that could result in events or circumstances that
might threaten our business model, future performance, solvency or
liquidity, and reputation. We consider the potential impact and
likelihood of internal and external risk events and circumstances,
and the timescales over which they may occur.
We identify, define and assess a range of principal risks to which
we are exposed. These are the high-level risks we face, for which
risk appetite is set and monitored via key risk indicators. They
are consistent with those set out in last year’s annual report and
comprise:
-
credit
risk
-
capital
risk
-
liquidity
and funding risk
-
market
risk
-
financial
crime risk
-
operational
risk
-
conduct
risk
-
regulatory
risk
-
legal
risk
-
model
risk
-
strategic
risk.
Amongst these, certain risks have been considered most material
over the course of the year. Further details on these four risks
are set out below:
|
Strategic risk
|
Exposure
Strategic risk can arise from an insufficiently defined, flawed, or
poorly implemented strategy resulting in the expectations of our
stakeholders not being met, including our customers, regulators and
investors.
We are confident that the strategy set in 2024 lays the foundations
for long term growth but recognise that its success is dependent on
our effective execution. Volatility in the external environment,
the challenge of safely exploiting opportunities for efficiency and
the possible impact of negative external sentiment are all
recognised as having the potential to push us off
course.
Response
The Board completes an annual review of the strategy and Long-Term
Plan, supported by a risk assessment reviewed at the Risk Oversight
Committee. The Executive team and Board monitor strategy execution
risks closely across all business lines and transformation
initiatives.
Elevated reputational risk exposure has been monitored closely
throughout the year with proactive and coordinated responses seeing
coverage and sentiment normalise by year-end.
Outlook
Through 2024 we have seen evidence that our strategy and hard work
is bearing fruit, with the bank re-entering the FTSE250 and seeing
its credit rating upgraded in 2024. Supported by stabilised
inflation, focus in 2025 will be on delivering the Bank’s targeted
lending growth objectives.
Our established Risk management Framework will be applied to
oversee the Bank’s evolving risk profile and act to ensure we
operate inside our agreed risk appetite. The Bank also continues to
conduct horizon scanning against emerging risks with the potential
for a severe impact and will adjust its approach
accordingly.
|
|
Capital risk
|
Exposure
Capital risk exposures arise from the depletion of our capital
resources which may result from:
-
increased
RWAs
-
losses
-
changes to
regulatory minima or other regulatory rules.
Our capital risk management approach is therefore focused on
ensuring we can maintain appropriate levels of capital to both meet
regulatory minima and support our objectives, both under normal and
stress conditions.
Response
Our capital risk mitigation is focused on three key
components:
-
a return to
sustainable profitability that will allow us to generate organic
capital growth
-
the
continued optimisation of our balance sheet to ensure we are
utilising our capital stack efficiently
-
continuing
to assess the raising of external regulatory debt capital, as and
when market conditions and opportunities allow.
The Board is committed to these principles and has taken steps
through 2024 to strengthen the capital base which has positioned
the Bank for sustained profitability.
Outlook
The focus for 2025 remains on supporting the Bank’s strategy
through an appropriate and efficient capital stack that allows us
to lend in our target market whilst maintaining ratios above our
regulatory minima.
The Bank continually monitors and assesses external pricing for
opportunities to support the execution of our strategy
whilst
ensuring it is done safely and on a sound capital
footing.
|
|
Credit
risk
|
Exposure
Our primary source of credit risk is through the loans, limits and
advances we make available to our customers. We have exposures
across three key areas: corporate and commercial, retail mortgages,
and consumer lending.
Over the course of 2024, the macroeconomic outlook has gradually
improved, and arrears and loss outcomes have been lower than prior
expectations. Inflation reduced significantly and property prices
exceeded prior forecasts. Whilst we saw some deterioration in
economic variables these were generally less severe than previously
forecast.
We have observed some crystallisation of the prior economic
deterioration on customer positions, this was lower than previously
forecast. As affordability for customers came under pressure from
higher interest rates, we observed an increase in arrears for the
mortgage portfolio as existing customers transitioned from low
fixed rate products onto higher rates. Although customers continue
to be impacted by higher interest rates, arrears have shown signs
of stabilising. Furthermore, given the forward-looking nature of
IFRS9, ECL stock was built in prior years and has not been
materially impacted by this increase in arrears.
Response
We have an appetite and credit criteria appropriate for managing
lending through an economic cycle. We have enhanced our credit risk
appetite, framework, and policies where appropriate to support the
Bank’s strategy to grow corporate and commercial lending, and drive
the pivot to specialist mortgage lending, whilst managing our
exposure to risk to minimise losses.
We support customers who are in arrears, have payment shortfalls or
are in financial difficulties to obtain the most appropriate
outcome for both the Bank and the customer. The primary objectives
of our policy are to ensure that appropriate mechanisms and tools
are in place to support customers during periods of financial
difficulty and to minimise the duration of the difficulty and the
consequence, costs and other impacts arising.
Outlook
Our updates to risk appetite and policies puts in a strong position
to deliver on the Bank’s strategy for growth in a way that
appropriately manages credit risk. The macroeconomic outlook has
improved during 2024, although risks remain as central banks manage
the course of interest rates with a background of potential trade
friction from political risk, and geopolitical instability
continues from conflicts.
We utilise forward looking macroeconomic scenarios provided by
Moody’s Analytics in the assessment of provisions. The use of an
independent supplier for the provision of scenarios helps to ensure
that the estimates are unbiased. The macroeconomic scenarios are
assessed and reviewed monthly to ensure appropriateness and
relevance to the ECL calculation.
|
|
Financial crime
risk
|
Exposure
We may be exposed to financial crime risk if we do not effectively
identify and appropriately mitigate the risks of criminals using
our products and services for financial crime. Financial crime
risks include money laundering, sanctions violations, bribery and
corruption, facilitation of tax evasion, proliferation financing
and terrorist financing.
Failure to prevent financial crime may result in harm to our
customers, ourselves and third parties. In addition, non-compliance
with regulatory and legal requirements may result in enforcement
action such as regulatory fines, restrictions, or suspension of
business or cost of mandatory corrective action, which will have an
adverse effect on us from a financial and reputational
perspective.
Response
We are committed to safeguarding
both ourselves and our customers from financial crime. We continue
to invest in our financial crime control framework to ensure
compliance with current as well as newly issued legal and
regulatory requirements. We continue to identify emerging trends
and typologies through conducting horizon scanning activity,
through information obtained from investigative and intelligence
teams and through attending key industry forums (or associations)
such as those hosted by UK Finance. As required, we continue to
update our control framework to ensure emerging risks are
identified and mitigated.
Outlook
Recognising the evolving landscape
of financial crime risk against the backdrop of increasing
regulatory focus, we continue to invest in our financial crime
control environment to prevent financial crime and remain aligned
to our legal and regulatory requirements.
|
Consolidated statement of comprehensive income
For the year ended 31 December 2024
|
|
|
Years ended 31 December
|
|
|
Notes
|
2024
£’million
|
2023
£’million
|
|
Interest income
|
2
|
935.4
|
855.7
|
|
Interest expense
|
2
|
(557.5)
|
(443.8)
|
|
Net interest income
|
|
377.9
|
411.9
|
|
Fee and commission income
|
3
|
98.0
|
95.0
|
|
Fee and commission expense
|
3
|
(4.8)
|
(4.6)
|
|
Net fee and commission income
|
|
93.2
|
90.4
|
|
Net (loss)/gain on sale of assets
|
4
|
(101.4)
|
2.7
|
|
Other income
|
5
|
35.6
|
143.9
|
|
Total income
|
|
405.3
|
648.9
|
|
General operating expenses
|
6
|
(489.0)
|
(502.9)
|
|
Depreciation and amortisation
|
11, 12
|
(77.3)
|
(77.7)
|
|
Impairment and write-offs of property, plant, equipment and
intangible assets
|
11, 12
|
(44.0)
|
(4.6)
|
|
Total operating expenses
|
|
(610.3)
|
(585.2)
|
|
Expected credit loss expense
|
14
|
(7.1)
|
(33.2)
|
|
(Loss)/profit before tax
|
|
(212.1)
|
30.5
|
|
Taxation
|
7
|
254.6
|
(1.0)
|
|
Profit for the year
|
|
42.5
|
29.5
|
|
Other comprehensive income for the year
|
|
|
|
|
Items which will be reclassified subsequently to profit or
loss:
|
|
|
|
|
Movement in respect of investment securities held at FVOCI (net of
tax):
|
|
|
|
|
|
|
3.4
|
2.4
|
|
Total other comprehensive income
|
|
3.4
|
2.4
|
|
Total comprehensive profit for the year
|
|
45.9
|
31.9
|
|
Earnings per share
|
|
|
|
|
Basic (pence)
|
17
|
6.3
|
13.8
|
|
Diluted (pence)
|
17
|
6.3
|
13.4
|
Consolidated balance sheet
As at 31 December 2024
|
|
|
Years ended 31 December
|
|
|
Notes
|
2024
£’million
|
2023
£’million
|
|
Cash and balances with the Bank of England
|
|
2,811
|
3,891
|
|
Loans and advances to customers
|
9
|
9,013
|
12,297
|
|
Investment securities held at fair value through other
comprehensive income
|
10
|
377
|
476
|
|
Investment securities held at amortised cost
|
10
|
4,113
|
4,403
|
|
Derivative financial assets
|
|
16
|
36
|
|
Property, plant and equipment
|
11
|
711
|
723
|
|
Intangible assets
|
12
|
126
|
193
|
|
Prepayments and accrued income
|
|
93
|
118
|
|
Deferred tax asset
|
7
|
240
|
-
|
|
Other assets
|
|
82
|
108
|
|
Total assets
|
|
17,582
|
22,245
|
|
Deposits from customers
|
|
14,458
|
15,623
|
|
Deposits from central banks
|
|
400
|
3,050
|
|
Debt securities
|
|
675
|
694
|
|
Repurchase agreements
|
|
391
|
1,191
|
|
Derivative financial liabilities
|
|
1
|
–
|
|
Lease liabilities
|
13
|
205
|
234
|
|
Deferred grants
|
|
13
|
16
|
|
Provisions
|
|
11
|
23
|
|
Deferred tax liability
|
7
|
-
|
13
|
|
Other liabilities
|
|
245
|
267
|
|
Total liabilities
|
|
16,399
|
21,111
|
|
Called-up share capital
|
|
–
|
–
|
|
Share premium
|
|
144
|
144
|
|
Retained earnings
|
|
1022
|
978
|
|
Other reserves
|
|
17
|
12
|
|
Total equity
|
|
1,183
|
1,134
|
|
Total equity and liabilities
|
|
17,582
|
22,245
|
Consolidated statements of changes in equity
For the year ended 31 December 2024
|
|
Called-up
share
capital
£’million
|
Share
premium
£’million
|
Merger
reserve
£’million
|
Retained
earnings
£’million
|
FVOCI
reserve
£’million
|
Share
option
reserve
£’million
|
Total
equity
£’million
|
|
Balance as at 1 January 2024
|
–
|
144
|
-
|
978
|
(11)
|
23
|
1,134
|
|
Profit for the year
|
–
|
–
|
–
|
43
|
–
|
–
|
43
|
|
Other comprehensive income (net of tax) relating to investment
securities held at FVOCI
|
–
|
–
|
–
|
–
|
4
|
–
|
4
|
|
Total comprehensive income
|
–
|
-
|
–
|
43
|
4
|
–
|
47
|
|
Equity-settled share based payment charges
|
-
|
-
|
-
|
-
|
-
|
2
|
2
|
|
Transfer of b/f share option reserve
|
–
|
–
|
–
|
1
|
–
|
(1)
|
-
|
|
Balance as at 31 December 2024
|
–
|
144
|
–
|
1,022
|
(7)
|
24
|
1,183
|
|
Balance as at 1 January 2023
|
–
|
1,964
|
–
|
(1,015)
|
(13)
|
20
|
956
|
|
Profit for the year
|
–
|
–
|
–
|
29
|
–
|
–
|
29
|
|
Other comprehensive income (net of tax) relating to investment
securities held at FVOCI
|
–
|
–
|
–
|
–
|
2
|
–
|
2
|
|
Total comprehensive income
|
–
|
–
|
–
|
29
|
2
|
–
|
31
|
|
Net share
option movements
|
–
|
–
|
–
|
–
|
–
|
3
|
3
|
|
Cancellation
of Metro Bank PLC share capital and share premium
|
–
|
(1,964)
|
–
|
1,964
|
–
|
–
|
–
|
|
Issuance
of Metro Bank Holdings PLC share capital
|
–
|
–
|
965
|
(965)
|
–
|
–
|
–
|
|
Bonus
issuance
|
965
|
–
|
(965)
|
-
|
–
|
–
|
–
|
|
Capital
reduction of Metro Bank Holdings PLC share capital
|
(965)
|
–
|
–
|
965
|
–
|
–
|
–
|
|
Shares
issued
|
–
|
150
|
–
|
–
|
–
|
–
|
150
|
|
Cost of
shares issued
|
–
|
(6)
|
–
|
–
|
–
|
–
|
(6)
|
|
Balance as at 31 December 2023
|
–
|
144
|
–
|
978
|
(11)
|
23
|
1,134
|
Consolidated cash flow statement
For the year ended 31 December 2024
|
|
|
Years ended 31 December
|
|
|
Notes
|
2024
£’million
|
2023
£’million
|
|
Reconciliation of loss before tax to net cash flows from operating
activities:
|
|
|
|
|
(Loss)/profit before tax
|
|
(212)
|
31
|
|
Adjustments for non-cash items
|
18
|
(359)
|
(376)
|
|
Interest received
|
|
948
|
834
|
|
Interest paid
|
|
(585)
|
(370)
|
|
Changes in other operating assets
|
|
3,320
|
744
|
|
Changes in other operating liabilities
|
|
(4,497)
|
(235)
|
|
Net cash (outflows)/inflows from operating activities
|
|
(1,385)
|
628
|
|
Cash flows from investing activities
|
|
|
|
|
Sales, redemptions and paydowns of investment securities
|
|
1,017
|
1,870
|
|
Purchase of investment securities
|
|
(630)
|
(816)
|
|
Purchase of property, plant and equipment
|
11
|
(41)
|
(12)
|
|
Purchase and development of intangible assets
|
12
|
(19)
|
(26)
|
|
Net cash inflows from investing activities
|
|
327
|
1,016
|
|
Cash flows from financing activities
|
|
|
|
|
Repayment
of capital elements of leases
|
13
|
(22)
|
(23)
|
|
Issuance
of new shares
|
|
-
|
150
|
|
Cost of
share issuance
|
|
-
|
(6)
|
|
Issuance
of debt securities
|
|
0
|
175
|
|
Cost of
debt issuance
|
|
(0)
|
(5)
|
|
Net cash (outflows)/inflows from financing activities
|
|
(22)
|
291
|
|
Net (decrease)/increase in cash and cash equivalents
|
|
(1,080)
|
1,935
|
|
Cash and
cash equivalents at start of year
|
|
3,891
|
1,956
|
|
Cash and
cash equivalents at end of year
|
|
2,811
|
3,891
|
1. Basis of preparation and significant accounting
policies
Basis of preparation
Our unaudited condensed consolidated financial statements have been
prepared using International Financial Reporting Standards (IFRSs)
as adopted by the UK.
There have been no changes in the accounting policies compared with
the prior year. They were authorised by the Board for issue on 26
February 2025.
2. Net interest income
Interest income
|
|
2024
£’million
|
2023
£’million
|
|
Cash and balances held with the Bank of England
|
193.1
|
120.9
|
|
Loans and advances to customers
|
586.2
|
599.9
|
|
Investment securities held at amortised cost
|
126.1
|
118.6
|
|
Investment securities held at FVOCI
|
18.3
|
6.8
|
|
Interest income calculated using the effective interest rate
method
|
923.7
|
846.2
|
|
Derivatives in hedge relationships
|
11.7
|
9.5
|
|
Total interest income
|
935.4
|
855.7
|
Interest expense
|
|
2024
£’million
|
2023
£’million
|
|
Deposits from customers
|
303.6
|
147.8
|
|
Deposits from central banks
|
124.2
|
161.3
|
|
Debt securities
|
84.8
|
55.7
|
|
Lease liabilities
|
12.4
|
13.1
|
|
Repurchase agreements
|
26.5
|
50.1
|
|
Interest expense calculated using the effective interest rate
method
|
551.5
|
428.0
|
|
Derivatives in hedge relationships
|
6.0
|
15.8
|
|
Total interest expense
|
557.5
|
443.8
|
3. Net fee and commission income
|
|
2024
£’million
|
2023
£’million
|
|
Service charges and other fee income
|
38.6
|
36.8
|
|
Safe deposit box income
|
19.0
|
18.2
|
|
ATM and interchange fees
|
40.4
|
40.0
|
|
Fee and commission income
|
98.0
|
95.0
|
|
Fee and commission expense
|
(4.8)
|
(4.6)
|
|
Total net fee and commission income
|
93.2
|
90.4
|
4. Net loss on sale of asset
|
|
2024
£’million
|
2023
£’million
|
|
Investment securities held at amortised cost
|
-
|
2.9
|
|
Loan portfolios
|
(101.4)
|
(0.2)
|
|
Total (loss)/gain on sale of assets
|
(101.4)
|
2.7
|
Loan portfolio
sales
Loss on sale relates to £2.5
billion of prime residential mortgages to NatWest Group PLC. Metro
Bank completed the sale on 30 September 2024.
5. Other income
|
|
2024
£’million
|
2023
£’million
|
|
Foreign currency transactions
|
29.7
|
34.0
|
|
Gain on debt extinguishment
|
-
|
100.0
|
|
Other income
|
5.9
|
9.9
|
|
Total other income
|
35.6
|
143.9
|
6. General operating expenses
|
|
2024
£’million
|
2023
£’million
|
|
People costs
|
209.6
|
241.2
|
|
Information technology costs
|
60.1
|
59.7
|
|
Occupancy costs
|
30.9
|
31.7
|
|
Money transmission and other banking-related costs
|
49.3
|
49.2
|
|
Transformation costs
|
31.1
|
20.2
|
|
Remediation costs
|
21.3
|
–
|
|
Capability and Innovation Fund costs
|
3.4
|
2.4
|
|
Legal and regulatory fees
|
9.0
|
7.0
|
|
Professional fees
|
27.7
|
23.2
|
|
Printing, postage and stationery costs
|
7.5
|
7.2
|
|
Travel costs
|
1.4
|
1.5
|
|
Marketing costs
|
9.4
|
7.7
|
|
Costs associated with capital raise
|
0.1
|
26.0
|
|
Holding company insertion costs
|
0.0
|
1.8
|
|
Other
|
28.2
|
24.1
|
|
Total general operating expenses
|
489.0
|
502.9
|
7. Taxation
Tax expense
|
|
2024
£’million
|
2023
£’million
|
|
Current tax
|
|
|
|
Current tax
|
(0.0)
|
(0.1)
|
|
Total current tax expense
|
(0.0)
|
(0.1)
|
|
Deferred tax
|
|
|
|
Origination and reversal of temporary differences
|
(254.1)
|
(0.5)
|
|
Effect of changes in tax rates
|
0.0
|
(0.4)
|
|
Adjustment in respect of prior years
|
(0.5)
|
–
|
|
Total deferred tax expense
|
(254.6)
|
(0.9)
|
|
Total tax expense
|
(254.6)
|
(1.0)
|
Reconciliation of the total tax expense
|
|
2024
£’million
|
Effective
tax rate
%
|
2023
£’million
|
Effective
tax rate
%
|
|
Accounting (loss)/profit before tax
|
(212.1)
|
|
30.5
|
|
|
Tax expense at statutory tax rate of 25% (2023: 23.5%)
|
53.0
|
25.0%
|
(7.2)
|
23.5%
|
|
Tax effects of:
|
|
|
|
|
|
Non-deductible expenses – depreciation on non-qualifying fixed
assets
|
(3.0)
|
(1.4%)
|
(2.5)
|
8.3%
|
|
Non-deductible expenses – investment property impairment
|
–
|
-
|
–
|
–
|
|
Non-deductible expenses – remediation
|
–
|
-
|
–
|
–
|
|
Non-deductible expenses – other
|
(7.7)
|
(3.6%)
|
(0.8)
|
2.6%
|
|
Impact of intangible asset write-off on research and development
deferred tax liability
|
-
|
-
|
0.1
|
(0.3%)
|
|
Share-based payments
|
(0.2)
|
(0.1%)
|
(1.2)
|
3.9%
|
|
Adjustment in respect of prior years
|
0.6
|
0.3%
|
–
|
–
|
|
Current year losses for which no deferred tax asset has been
recognised
|
-
|
-
|
(15.4)
|
50.5%
|
|
Losses
offset against current year profits
|
-
|
-
|
1.1
|
(3.6%)
|
|
Movement
in recognised deferred tax asset for unused tax losses
|
211.7
|
99.9%
|
1.8
|
(5.9%)
|
|
Effect of
changes in tax rates
|
-
|
-
|
(0.4)
|
1.3%
|
|
Income
tax not taxable
|
-
|
-
|
23.5
|
(77.0%)
|
|
Tax expense reported in the consolidated income
statement
|
254.6
|
120.0%
|
(1.0)
|
3.3%
|
Deferred tax assets
A deferred tax asset must be regarded as recoverable and therefore
recognised only when, on the basis of all available evidence, it
can be regarded as more likely than not there will be suitable tax
profits from which the future of the underlying timing differences
can be deducted.
The following table shows deferred tax recorded in the statement of
financial position and changes recorded in the tax
expense:
|
|
31 December 2024
|
|
|
Unused
tax losses
£’million
|
Investment
securities
and
impairments
£’million
|
Share-
based
payments
£’million
|
Property,
plant and
equipment
£’million
|
Intangible
assets
£’million
|
Total
£’million
|
|
Deferred tax assets
|
269
|
1
|
1
|
–
|
–
|
271
|
|
Deferred tax liabilities
|
–
|
3
|
–
|
(31)
|
(3)
|
(31)
|
|
Deferred tax assets (net)
|
269
|
4
|
1
|
(31)
|
(3)
|
240
|
|
1 January 2024
|
14
|
6
|
1
|
(29)
|
(5)
|
(13)
|
|
Prior year movement
|
(1)
|
(1)
|
-
|
-
|
1
|
(1)
|
|
Income statement
|
256
|
-
|
-
|
(2)
|
1
|
255
|
|
Other comprehensive income
|
-
|
(1)
|
-
|
-
|
-
|
(1)
|
|
31 December 2024
|
269
|
4
|
1
|
(31)
|
(3)
|
240
|
|
|
31 December 2023
|
|
|
Unused
tax losses
£’million
|
Investment
securities
and
impairments
£’million
|
Share-
based
payments
£’million
|
Property,
plant and
equipment
£’million
|
Intangible
assets
£’million
|
Total
£’million
|
|
Deferred tax assets
|
14
|
2
|
1
|
–
|
–
|
17
|
|
Deferred tax liabilities
|
–
|
4
|
–
|
(29)
|
(5)
|
(30)
|
|
Deferred tax liabilities (net)
|
14
|
6
|
1
|
(29)
|
(5)
|
(13)
|
|
1 January 2023
|
12
|
7
|
1
|
(26)
|
(6)
|
(12)
|
|
Income statement
|
2
|
(1)
|
–
|
(3)
|
1
|
(1)
|
|
Other comprehensive income
|
14
|
6
|
1
|
(29)
|
(5)
|
(13)
|
|
31 December 2023
|
14
|
2
|
1
|
–
|
–
|
17
|
Offsetting of deferred tax assets and liabilities
We have presented all the deferred tax assets and liabilities above
on a net basis within the balance sheet. This is on the basis that
all our deferred tax assets and liabilities relate to taxes levied
by HMRC and we have a legally enforceable right to offset
these.
Deferred Tax on unused Tax losses
We have total unused tax losses of
£1,073m, and a deferred tax asset has been recognised on these
losses. The future profit projections as per the board approved
long-term plan support the recognition of the deferred tax asset.
There is no time limit on the utilisation of tax losses.
8. Financial instruments
Our financial instruments primarily comprise customer deposits,
loans and advances to customers and investment securities, all of
which arise as a result of our normal operations.
The main financial risks arising from our financial instruments are
credit risk, liquidity risk and market risks (price and interest
rate risk).
The financial instruments we hold are simple in nature and we do
not consider that we have made any significant or material
judgements relating to the classification and measurement of
financial instruments under IFRS 9.
Cash and balances with the Bank of
England, trade and other receivables, trade and other payables and
other assets and liabilities which meet the definition of financial
instruments are not included in the following tables.
Classification of financial instruments
|
|
31 December 2024
|
|
|
Fair value
through
profit and
loss
£’million
|
FVOCI
£’million
|
Amortised
cost
£’million
|
Total
£’million
|
|
Assets
|
|
|
|
|
|
Loans and advances to customers
|
–
|
–
|
9,013
|
9,013
|
|
Investment securities
|
–
|
377
|
4,113
|
4,490
|
|
Derivative financial assets
|
16
|
–
|
–
|
16
|
|
Liabilities
|
|
|
|
|
|
Deposits from customers
|
–
|
–
|
14,458
|
14,458
|
|
Deposits from central bank
|
–
|
–
|
400
|
400
|
|
Debt securities
|
-
|
–
|
675
|
675
|
|
Derivative financial liabilities
|
1
|
-
|
-
|
1
|
|
Repurchase agreements
|
–
|
–
|
391
|
391
|
|
|
31 December 2023
|
|
|
Fair value
through
profit
and loss
£’million
|
FVOCI
£’million
|
Amortised
cost
£’million
|
Total
£’million
|
|
Assets
|
|
|
|
|
|
Loans and advances to customers
|
–
|
–
|
12,297
|
12,297
|
|
Investment securities
|
–
|
476
|
4,403
|
4,879
|
|
Derivative financial assets
|
36
|
–
|
–
|
36
|
|
Liabilities
|
|
|
|
|
|
Deposits from customers
|
–
|
–
|
15,623
|
15,623
|
|
Deposits from central bank
|
–
|
–
|
3,050
|
3,050
|
|
Debt securities
|
–
|
–
|
694
|
694
|
|
Repurchase agreements
|
–
|
–
|
1,191
|
1,191
|
9. Loans and advances to customers
|
|
31 December 2024
|
31 December 2023
|
|
|
Gross
carrying
amount
£’million
|
ECL
allowance
£’million
|
Net
carrying
amount
£’million
|
Gross
carrying
amount
£’million
|
ECL
allowance
£’million
|
Net
carrying
amount
£’million
|
|
Consumer lending
|
745
|
(108)
|
637
|
1,297
|
(108)
|
1,189
|
|
Retail mortgages
|
5,145
|
(15)
|
5,130
|
7,817
|
(19)
|
7,798
|
|
Commercial lending
|
3,314
|
(68)
|
3,246
|
3,382
|
(72)
|
3,310
|
|
Total loans and advances to customers
|
9,204
|
(191)
|
9,013
|
12,496
|
(199)
|
12,297
|
Gross loans and advances by product category
|
|
31 December
2024
£’million
|
31 December
2023
£’million
|
|
Overdrafts
|
39
|
40
|
|
Credit cards
|
20
|
28
|
|
Term loans
|
679
|
1,219
|
|
Consumer auto-finance
|
7
|
10
|
|
Total consumer lending
|
745
|
1,297
|
|
Residential owner occupied
|
3,692
|
5,851
|
|
Retail buy-to-let
|
1,453
|
1,966
|
|
Total retail mortgages
|
5,145
|
7,817
|
|
Total retail lending
|
5,890
|
9,114
|
|
Professional buy-to-let
|
283
|
465
|
|
Bounce back loans
|
346
|
524
|
|
Coronavirus business interruption loans
|
47
|
86
|
|
Recovery loan scheme1
|
260
|
328
|
|
Core commercial lending
|
1,599
|
1,341
|
|
Commercial term loans
|
2,535
|
2,744
|
|
Overdrafts and revolving credit facilities
|
220
|
172
|
|
Credit cards
|
7
|
4
|
|
Asset and invoice finance
|
552
|
462
|
|
Total commercial lending
|
3,314
|
3,382
|
|
Gross loans and advances to customers
|
9,204
|
12,496
|
Recovery loan scheme includes £45 million acquired from third
parties under forward flow arrangements (31 December 2023: £70
million). The loans are held in a trust arrangement in which we
hold 99% of the beneficial interest, with the issuer retaining the
remaining 1% (the trust retains the legal title loans).
10. Investment securities
|
|
31 December
2024
£’million
|
31 December
2023
£’million
|
|
Investment securities held at FVOCI
|
377
|
476
|
|
Investment securities held at amortised cost
|
4,113
|
4,403
|
|
Total investment securities
|
4,490
|
4,879
|
Investment securities held at FVOCI
|
|
31 December
2024
£’million
|
31 December
2023
£’million
|
|
Sovereign bonds
|
149
|
220
|
|
Residential mortgage-backed securities
|
0
|
-
|
|
Covered bonds
|
83
|
112
|
|
Multi-lateral development bank bonds
|
145
|
144
|
|
Total investment securities held at FVOCI
|
377
|
476
|
Investment securities held at amortised cost
|
|
31 December
2024
£’million
|
31 December
2023
£’million
|
|
Sovereign bonds
|
875
|
938
|
|
Residential mortgage-backed securities
|
876
|
954
|
|
Covered bonds
|
478
|
594
|
|
Multi-lateral development bank bonds
|
1,576
|
1,729
|
|
Asset backed securities
|
308
|
188
|
|
Total investment securities held at amortised cost
|
4,113
|
4,403
|
11. Property, plant and equipment
|
|
Investment
property
£’million
|
Leasehold
improvements
£’million
|
Freehold
land and
buildings
£’million
|
Fixtures,
fittings and
equipment
£’million
|
IT Hardware
£’million
|
Right-of-use
assets
£’million
|
Total
£’million
|
|
Cost
|
|
|
|
|
|
|
|
|
1 January 2024
|
12
|
256
|
386
|
23
|
10
|
279
|
966
|
|
Additions
|
0
|
1
|
37
|
0
|
2
|
1
|
41
|
|
Disposals
|
–
|
-
|
–
|
–
|
–
|
(25)
|
(25)
|
|
Transfers
|
–
|
(13)
|
13
|
–
|
–
|
–
|
–
|
|
31 December 2024
|
12
|
244
|
436
|
23
|
12
|
255
|
982
|
|
Accumulated depreciation
|
|
|
|
|
|
|
|
|
1 January 2024
|
8
|
79
|
42
|
21
|
4
|
89
|
243
|
|
Depreciation charge
|
0
|
5
|
12
|
1
|
4
|
12
|
34
|
|
Impairments
|
-
|
-
|
-
|
-
|
-
|
1
|
1
|
|
Disposals
|
–
|
(0)
|
–
|
–
|
–
|
(7)
|
(7)
|
|
Transfers
|
–
|
3
|
(3)
|
–
|
–
|
–
|
-
|
|
31 December 2024
|
8
|
87
|
51
|
22
|
8
|
95
|
271
|
|
Net book value
|
4
|
157
|
385
|
1
|
4
|
160
|
711
|
|
|
Investment
property
£’million
|
Leasehold
improvements
£’million
|
Freehold
land and
buildings
£’million
|
Fixtures,
fittings and
equipment
£’million
|
IT Hardware
£’million
|
Right-of-use
assets
£’million
|
Total
£’million
|
|
Cost
|
|
|
|
|
|
|
|
|
1 January 2023
|
12
|
261
|
372
|
22
|
8
|
283
|
958
|
|
Additions
|
–
|
–
|
9
|
1
|
2
|
–
|
12
|
|
Disposals
|
–
|
–
|
–
|
–
|
–
|
(4)
|
(4)
|
|
Transfers
|
–
|
(5)
|
5
|
–
|
–
|
–
|
–
|
|
31 December 2023
|
12
|
256
|
386
|
23
|
10
|
279
|
966
|
|
Accumulated depreciation
|
|
|
|
|
|
|
|
|
1 January 2023
|
8
|
69
|
34
|
20
|
2
|
77
|
210
|
|
Depreciation charge
|
–
|
13
|
5
|
1
|
2
|
13
|
34
|
|
Disposals
|
–
|
–
|
–
|
–
|
–
|
(1)
|
(1)
|
|
Transfers
|
–
|
(3)
|
3
|
–
|
–
|
–
|
–
|
|
31 December 2023
|
8
|
79
|
42
|
21
|
4
|
89
|
243
|
|
Net book value
|
4
|
177
|
344
|
2
|
6
|
190
|
723
|
12. Intangible assets
|
|
Goodwill
£’million
|
Brands
£’million
|
Software
£’million
|
Total
£’million
|
|
Cost
|
|
|
|
|
|
1 January 2024
|
10
|
2
|
355
|
367
|
|
Additions
|
–
|
–
|
19
|
19
|
|
Write-offs
|
–
|
–
|
(85)
|
(85)
|
|
31 December 2024
|
10
|
2
|
289
|
301
|
|
Accumulated amortisation
|
|
|
|
|
|
1 January 2024
|
–
|
1
|
173
|
174
|
|
Amortisation charge
|
–
|
-
|
43
|
43
|
|
Write-offs
|
–
|
–
|
(42)
|
(42)
|
|
31 December 2024
|
–
|
1
|
174
|
175
|
|
Net book value
|
10
|
1
|
115
|
126
|
|
|
Goodwill
£’million
|
Brands
£’million
|
Software
£’million
|
Total
£’million
|
|
Cost
|
|
|
|
|
|
1 January 2023
|
10
|
2
|
338
|
350
|
|
Additions
|
–
|
–
|
26
|
26
|
|
Write-offs
|
–
|
–
|
(9)
|
(9)
|
|
31 December 2023
|
10
|
2
|
355
|
367
|
|
Accumulated amortisation
|
|
|
|
|
|
1 January 2023
|
–
|
–
|
134
|
134
|
|
Amortisation charge
|
–
|
1
|
43
|
44
|
|
Write-offs
|
–
|
–
|
(4)
|
(4)
|
|
31 December 2023
|
–
|
1
|
173
|
174
|
|
Net book value
|
10
|
1
|
182
|
193
|
13. Leases
Lease liabilities
|
|
2024
£’million
|
2023
£’million
|
|
1 January
|
234
|
248
|
|
Additions and modifications
|
1
|
–
|
|
Disposals
|
(20)
|
(4)
|
|
Lease payments made
|
(22)
|
(23)
|
|
Interest on lease liabilities
|
12
|
13
|
|
31 December
|
205
|
234
|
Minimum lease payments
|
|
31 December
2024
£’million
|
31 December
2023
£’million
|
|
Within one year
|
20
|
22
|
|
Due in one to five years
|
74
|
83
|
|
Due in more than five years
|
101
|
145
|
|
Total
|
195
|
250
|
14. Expected credit losses and credit risk
Expected credit loss expense
|
|
2024
£’million
|
2023
£’million
|
|
Retail mortgages1
|
(4)
|
(1)
|
|
Consumer lending1
|
(0)
|
33
|
|
Commercial lending1
|
(4)
|
(20)
|
|
Investment securities
|
-
|
1
|
|
Write-offs and other movements
|
15
|
20
|
|
Total expected credit loss expense
|
7
|
33
|
1. Represents
the movement in ECL stock during the year and therefore excludes
write-offs which are shown separately.
Loss allowance
Total loans and advances to customers
|
|
Gross carrying amount
|
|
Loss allowance
|
|
Net carrying amount
|
|
£’million
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
1
January
2024
|
10,596
|
1,511
|
389
|
0
|
12,496
|
|
(63)
|
(43)
|
(93)
|
–
|
(199)
|
|
10,533
|
1,468
|
296
|
0
|
12,297
|
|
Transfers
to/(from)
Stage
11
|
385
|
(368)
|
(17)
|
-
|
-
|
|
(11)
|
10
|
1
|
-
|
(0)
|
|
374
|
(358)
|
(16)
|
-
|
-
|
|
Transfers
to/(from)
Stage
2
|
(409)
|
416
|
(7)
|
-
|
-
|
|
2
|
(2)
|
-
|
-
|
-
|
|
(407)
|
414
|
(7)
|
-
|
-
|
|
Transfers
to/(from)
Stage
3
|
(192)
|
(100)
|
292
|
-
|
-
|
|
4
|
7
|
(11)
|
-
|
-
|
|
(188)
|
(93)
|
281
|
-
|
-
|
|
Net
remeasurement
due to transfers2
|
-
|
-
|
-
|
-
|
-
|
|
9
|
(14)
|
(40)
|
-
|
(45)
|
|
9
|
(14)
|
(40)
|
-
|
(45)
|
|
New
lending3
|
1,716
|
147
|
1
|
–
|
1,864
|
|
(11)
|
(3)
|
(1)
|
–
|
(15)
|
|
1,705
|
144
|
-
|
–
|
1,849
|
|
Repayments, additional drawdowns
and
interest
accrued
|
(619)
|
(120)
|
(33)
|
(1)
|
(773)
|
|
-
|
-
|
-
|
-
|
-
|
|
(619)
|
(120)
|
(33)
|
(1)
|
(773)
|
|
Derecognitions4
|
(3,755)
|
(507)
|
(121)
|
-
|
(4,383)
|
|
11
|
11
|
20
|
-
|
42
|
|
(3,744)
|
(496)
|
(101)
|
-
|
(4,341)
|
|
Changes
to
model
assumptions5
|
-
|
-
|
-
|
-
|
-
|
|
20
|
5
|
-
|
1
|
26
|
|
20
|
5
|
-
|
1
|
26
|
|
31
December
2024
|
7,722
|
979
|
504
|
(1)
|
9,204
|
|
(39)
|
(29)
|
(124)
|
1
|
(191)
|
|
7,683
|
950
|
380
|
-
|
9,013
|
|
Off-balance
sheet items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and
guarantees6
|
|
|
|
|
718
|
|
|
|
|
|
-
|
|
|
|
|
|
718
|
|
|
Gross carrying amount
|
|
Loss allowance
|
|
Net carrying amount
|
|
£’million
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
1
January
2023
|
10,849
|
2,088
|
352
|
–
|
13,289
|
|
(66)
|
(51)
|
(70)
|
–
|
(187)
|
|
10,783
|
2,037
|
282
|
–
|
13,102
|
|
Transfers
to/(from)
Stage
11
|
872
|
(857)
|
(15)
|
-
|
-
|
|
(15)
|
15
|
-
|
-
|
-
|
|
857
|
(842)
|
(15)
|
-
|
-
|
|
Transfers
to/(from)
Stage
2
|
(581)
|
589
|
(8)
|
-
|
-
|
|
4
|
(6)
|
2
|
-
|
-
|
|
(577)
|
583
|
(6)
|
-
|
-
|
|
Transfers
to/(from)
Stage
3
|
(170)
|
(71)
|
241
|
-
|
-
|
|
3
|
4
|
(7)
|
-
|
-
|
|
(167)
|
(67)
|
234
|
-
|
-
|
|
Net
remeasurement
due to transfers2
|
-
|
-
|
-
|
-
|
-
|
|
12
|
(13)
|
(38)
|
-
|
(39)
|
|
12
|
(13)
|
(38)
|
-
|
(39)
|
|
New
lending3
|
2,060
|
239
|
16
|
–
|
2,315
|
|
(18)
|
(6)
|
(6)
|
–
|
(30)
|
|
2,042
|
233
|
10
|
–
|
2,285
|
|
Repayments, additional drawdowns
and
interest
accrued
|
(685)
|
(172)
|
(40)
|
-
|
(897)
|
|
-
|
-
|
-
|
-
|
-
|
|
(685)
|
(172)
|
(40)
|
-
|
(897)
|
|
Derecognitions4
|
(1,749)
|
(305)
|
(157)
|
–
|
(2,211)
|
|
13
|
10
|
26
|
–
|
49
|
|
(1,736)
|
(295)
|
(131)
|
–
|
(2,162)
|
|
Changes
to
model
assumptions5
|
-
|
-
|
-
|
-
|
-
|
|
4
|
4
|
-
|
-
|
8
|
|
4
|
4
|
-
|
-
|
8
|
|
31
December
2023
|
10,596
|
1,511
|
389
|
–
|
12,496
|
|
(63)
|
(43)
|
(93)
|
–
|
(199)
|
|
10,533
|
1,468
|
296
|
–
|
12,297
|
|
Off-balance
sheet items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and
guarantees6
|
|
|
|
|
718
|
|
|
|
|
|
-
|
|
|
|
|
|
718
|
-
Represents stage transfers
prior to any ECL remeasurements.
-
Represents the remeasurement
between the 12 month and lifetime ECL due to stage transfer. In
addition, it includes any ECL change resulting from model
assumptions and forward-looking information on these
loans.
-
Represents the increase in
balances resulting from loans and advances that have been newly
originated, purchased or renewed as well as any ECL that has been
recognised in relation to these loans during the year.
-
Represents the decrease in
balances resulting from loans and advances that have been fully
repaid, sold or written off.
-
Represents the change in ECL to
those loans that remain within the same stage through the
year.
Retail mortgages
|
|
Gross carrying amount
|
|
Loss allowance
|
|
Net carrying amount
|
|
£’million
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
1
January
2024
|
6,887
|
784
|
146
|
-
|
7,817
|
|
(7)
|
(6)
|
(6)
|
-
|
(19)
|
|
6,880
|
778
|
140
|
–
|
7,798
|
|
Transfers
to/(from)
Stage
1
|
146
|
(138)
|
(8)
|
-
|
-
|
|
(1)
|
1
|
-
|
-
|
-
|
|
145
|
(137)
|
(8)
|
-
|
-
|
|
Transfers
to/(from)
Stage
2
|
(171)
|
173
|
(2)
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
|
|
(171)
|
173
|
(2)
|
-
|
-
|
|
Transfers
to/(from)
Stage
3
|
(53)
|
(46)
|
99
|
-
|
-
|
|
-
|
1
|
(1)
|
-
|
-
|
|
(53)
|
(45)
|
98
|
-
|
-
|
|
Net
remeasurement
due to transfers
|
-
|
-
|
-
|
-
|
-
|
|
1
|
(1)
|
(2)
|
-
|
(2)
|
|
1
|
(1)
|
(2)
|
-
|
(2)
|
|
New
lending
|
728
|
126
|
-
|
-
|
854
|
|
(1)
|
(2)
|
-
|
–
|
(3)
|
|
727
|
124
|
-
|
-
|
851
|
|
Repayments,
additional
drawdowns
and interest accrued
|
(113)
|
(12)
|
1
|
-
|
(124)
|
|
-
|
-
|
-
|
-
|
-
|
|
(113)
|
(12)
|
1
|
-
|
(124)
|
|
Derecognitions
|
(3,066)
|
(303)
|
(33)
|
-
|
(3,402)
|
|
3
|
2
|
2
|
-
|
7
|
|
(3,063)
|
(301)
|
(31)
|
-
|
(3,395)
|
|
Changes
to
model
assumptions
|
-
|
-
|
-
|
-
|
-
|
|
1
|
1
|
-
|
-
|
2
|
|
1
|
1
|
-
|
-
|
2
|
|
31
December
2024
|
4,358
|
584
|
203
|
-
|
5,145
|
|
(4)
|
(4)
|
(7)
|
-
|
(15)
|
|
4,354
|
580
|
196
|
-
|
5,130
|
|
|
Gross carrying amount
|
|
Loss allowance
|
|
Net carrying amount
|
|
£’million
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
1 January 2023
|
6,195
|
1,343
|
111
|
–
|
7,649
|
|
(6)
|
(11)
|
(3)
|
–
|
(20)
|
|
6,189
|
1,332
|
108
|
–
|
7,629
|
|
Transfers to/(from) Stage 1
|
745
|
(737)
|
(8)
|
–
|
–
|
|
(6)
|
6
|
–
|
–
|
–
|
|
739
|
(731)
|
(8)
|
–
|
–
|
|
Transfers to/(from) Stage 2
|
(193)
|
199
|
(6)
|
–
|
–
|
|
–
|
–
|
–
|
–
|
–
|
|
(193)
|
199
|
(6)
|
–
|
–
|
|
Transfers to/(from) Stage 3
|
(38)
|
(29)
|
67
|
–
|
–
|
|
–
|
–
|
–
|
–
|
–
|
|
(38)
|
(29)
|
67
|
–
|
–
|
|
Net remeasurement due to transfers
|
–
|
–
|
–
|
–
|
–
|
|
5
|
(2)
|
(2)
|
–
|
1
|
|
5
|
(2)
|
(2)
|
–
|
1
|
|
New lending
|
1,195
|
147
|
1
|
–
|
1,343
|
|
(1)
|
(1)
|
–
|
–
|
(2)
|
|
1,194
|
146
|
1
|
–
|
1,341
|
|
Repayments, additional drawdowns
and interest accrued
|
(177)
|
(18)
|
–
|
–
|
(195)
|
|
–
|
–
|
–
|
–
|
–
|
|
(177)
|
(18)
|
–
|
–
|
(195)
|
|
Derecognitions
|
(840)
|
(121)
|
(19)
|
–
|
(980)
|
|
1
|
1
|
–
|
–
|
2
|
|
(839)
|
(120)
|
(19)
|
–
|
(978)
|
|
Changes to model assumptions
|
–
|
–
|
–
|
–
|
–
|
|
–
|
1
|
(1)
|
–
|
–
|
|
–
|
1
|
(1)
|
–
|
-
|
|
31 December 2023
|
6,887
|
784
|
146
|
–
|
7,817
|
|
(7)
|
(6)
|
(6)
|
–
|
(19)
|
|
6,880
|
778
|
140
|
–
|
7,798
|
Consumer lending
|
|
Gross carrying amount
|
|
Loss allowance
|
|
Net carrying amount
|
|
£’million
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
1
January
2024
|
906
|
314
|
77
|
-
|
1,297
|
|
(26)
|
(16)
|
(66)
|
-
|
(108)
|
|
880
|
298
|
11
|
-
|
1,189
|
|
Transfers
to/(from)
Stage
1
|
80
|
(79)
|
(1)
|
-
|
-
|
|
(3)
|
3
|
-
|
-
|
-
|
|
77
|
(76)
|
(1)
|
-
|
-
|
|
Transfers
to/(from)
Stage
2
|
(74)
|
74
|
-
|
-
|
-
|
|
1
|
(1)
|
-
|
-
|
-
|
|
(73)
|
73
|
-
|
-
|
-
|
|
Transfers
to/(from)
Stage
3
|
(27)
|
(14)
|
41
|
-
|
-
|
|
1
|
4
|
(5)
|
-
|
-
|
|
(26)
|
(10)
|
36
|
-
|
-
|
|
Net
remeasurement
due to transfers
|
-
|
-
|
-
|
-
|
-
|
|
2
|
(4)
|
(25)
|
-
|
(27)
|
|
2
|
(4)
|
(25)
|
-
|
(27)
|
|
New
lending
|
4
|
-
|
-
|
-
|
4
|
|
-
|
-
|
-
|
-
|
-
|
|
4
|
-
|
-
|
–
|
4
|
|
Repayments,
additional
drawdowns
and interest accrued
|
(226)
|
(83)
|
(10)
|
(1)
|
(320)
|
|
-
|
-
|
-
|
-
|
-
|
|
(226)
|
(83)
|
(10)
|
(1)
|
(320)
|
|
Derecognitions
|
(167)
|
(59)
|
(10)
|
-
|
(236)
|
|
4
|
2
|
9
|
-
|
15
|
|
(163)
|
(57)
|
(1)
|
-
|
(221)
|
|
Changes
to
model
assumptions
|
-
|
-
|
-
|
-
|
-
|
|
9
|
3
|
(1)
|
1
|
12
|
|
9
|
3
|
(1)
|
1
|
12
|
|
31
December
2024
|
496
|
153
|
97
|
(1)
|
745
|
|
(12)
|
(9)
|
(88)
|
1
|
(108)
|
|
484
|
144
|
9
|
-
|
637
|
|
|
Gross carrying amount
|
|
Loss allowance
|
|
Net carrying amount
|
|
£’million
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
1 January 2023
|
1,180
|
250
|
50
|
–
|
1,480
|
|
(21)
|
(12)
|
(42)
|
–
|
(75)
|
|
1,159
|
238
|
8
|
–
|
1,405
|
|
Transfers to/(from) Stage 1
|
34
|
(34)
|
–
|
–
|
–
|
|
(2)
|
2
|
–
|
–
|
–
|
|
32
|
(32)
|
–
|
–
|
–
|
|
Transfers to/(from) Stage 2
|
(182)
|
182
|
–
|
–
|
–
|
|
2
|
(2)
|
–
|
–
|
–
|
|
(180)
|
180
|
–
|
–
|
–
|
|
Transfers to/(from) Stage 3
|
(35)
|
(9)
|
44
|
–
|
–
|
|
1
|
2
|
(3)
|
–
|
–
|
|
(34)
|
(7)
|
41
|
–
|
–
|
|
Net remeasurement due to transfers
|
–
|
–
|
–
|
–
|
–
|
|
2
|
(6)
|
(28)
|
–
|
(32)
|
|
2
|
(6)
|
(28)
|
–
|
(32)
|
|
New lending
|
311
|
78
|
7
|
–
|
396
|
|
(9)
|
(4)
|
(6)
|
–
|
(19)
|
|
302
|
74
|
1
|
–
|
377
|
|
Repayments, additional drawdowns
and interest accrued
|
(217)
|
(111)
|
(10)
|
–
|
(338)
|
|
–
|
–
|
–
|
–
|
–
|
|
(217)
|
(111)
|
(10)
|
–
|
(338)
|
|
Derecognitions
|
(185)
|
(42)
|
(14)
|
–
|
(241)
|
|
3
|
2
|
12
|
–
|
17
|
|
(182)
|
(40)
|
(2)
|
–
|
(224)
|
|
Changes to model assumptions
|
–
|
–
|
–
|
–
|
–
|
|
(2)
|
2
|
1
|
–
|
1
|
|
(2)
|
2
|
1
|
–
|
1
|
|
31 December 2023
|
906
|
314
|
77
|
–
|
1,297
|
|
(26)
|
(16)
|
(66)
|
–
|
(108)
|
|
880
|
298
|
11
|
–
|
1,189
|
Commercial lending
|
|
Gross carrying amount
|
|
Loss allowance
|
|
Net carrying amount
|
|
£’million
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
1 January 2024
|
2,803
|
413
|
166
|
–
|
3,382
|
|
(30)
|
(21)
|
(21)
|
–
|
(72)
|
|
2,773
|
392
|
145
|
–
|
3,310
|
|
Transfers to/(from) Stage 1
|
159
|
(151)
|
(8)
|
–
|
-
|
|
(7)
|
6
|
1
|
–
|
-
|
|
152
|
(145)
|
(7)
|
–
|
-
|
|
Transfers to/(from) Stage 2
|
(164)
|
169
|
(5)
|
–
|
-
|
|
1
|
(1)
|
-
|
–
|
-
|
|
(163)
|
168
|
(5)
|
–
|
-
|
|
Transfers to/(from) Stage 3
|
(112)
|
(40)
|
152
|
–
|
-
|
|
3
|
2
|
(5)
|
–
|
-
|
|
(109)
|
(38)
|
147
|
–
|
-
|
|
Net remeasurement due to transfers
|
–
|
–
|
–
|
-
|
-
|
|
6
|
(9)
|
(13)
|
–
|
(16)
|
|
6
|
(9)
|
(13)
|
-
|
(16)
|
|
New lending
|
984
|
21
|
1
|
–
|
1,006
|
|
(10)
|
(1)
|
(1)
|
–
|
(12)
|
|
974
|
20
|
-
|
–
|
994
|
|
Repayments, additional drawdowns
and interest accrued
|
(280)
|
(25)
|
(24)
|
-
|
(329)
|
|
–
|
–
|
–
|
–
|
–
|
|
(280)
|
(25)
|
(24)
|
-
|
(329)
|
|
Derecognitions
|
(522)
|
(145)
|
(78)
|
–
|
(745)
|
|
4
|
7
|
9
|
–
|
20
|
|
(518)
|
(138)
|
(69)
|
–
|
(725)
|
|
Changes to model assumptions
|
–
|
–
|
–
|
–
|
–
|
|
10
|
1
|
1
|
-
|
12
|
|
10
|
1
|
1
|
-
|
12
|
|
31 December 2024
|
2,868
|
242
|
204
|
-
|
3,314
|
|
(23)
|
(16)
|
(29)
|
-
|
(68)
|
|
2,845
|
226
|
175
|
-
|
3,246
|
|
|
Gross carrying amount
|
|
Loss allowance
|
|
Net carrying amount
|
|
£’million
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
POCI
|
Total
|
|
1 January 2023
|
3,474
|
495
|
191
|
–
|
4,160
|
|
(39)
|
(28)
|
(25)
|
–
|
(92)
|
|
3,435
|
467
|
166
|
–
|
4,068
|
|
Transfers to/(from) Stage 1
|
93
|
(86)
|
(7)
|
–
|
–
|
|
(7)
|
7
|
–
|
–
|
–
|
|
86
|
(79)
|
(7)
|
–
|
–
|
|
Transfers to/(from) Stage 2
|
(206)
|
208
|
(2)
|
–
|
–
|
|
2
|
(4)
|
2
|
–
|
–
|
|
(204)
|
204
|
–
|
–
|
–
|
|
Transfers to/(from) Stage 3
|
(97)
|
(33)
|
130
|
–
|
–
|
|
2
|
2
|
(4)
|
–
|
–
|
|
(95)
|
(31)
|
126
|
–
|
–
|
|
Net remeasurement due to transfers
|
–
|
–
|
–
|
–
|
–
|
|
5
|
(5)
|
(8)
|
–
|
(8)
|
|
5
|
(5)
|
(8)
|
–
|
(8)
|
|
New lending
|
554
|
14
|
8
|
–
|
576
|
|
(8)
|
(1)
|
–
|
–
|
(9)
|
|
546
|
13
|
8
|
–
|
567
|
|
Repayments, additional drawdowns
and interest accrued
|
(291)
|
(43)
|
(30)
|
–
|
(364)
|
|
–
|
–
|
–
|
–
|
–
|
|
(291)
|
(43)
|
(30)
|
–
|
(364)
|
|
Derecognitions
|
(724)
|
(142)
|
(124)
|
–
|
(990)
|
|
9
|
7
|
14
|
–
|
30
|
|
(715)
|
(135)
|
(110)
|
–
|
(960)
|
|
Changes to model assumptions
|
–
|
–
|
–
|
–
|
–
|
|
6
|
1
|
–
|
–
|
7
|
|
6
|
1
|
–
|
–
|
7
|
|
31 December 2023
|
2,803
|
413
|
166
|
–
|
3,382
|
|
(30)
|
(21)
|
(21)
|
–
|
(72)
|
|
2,773
|
392
|
145
|
–
|
3,310
|
Credit risk exposures
Retail mortgages
|
|
31 December 2024
|
31 December 2023
|
|
£’million
|
Stage 1
12-month
ECL
|
Stage 2
Lifetime
ECL
|
Stage 3
Lifetime
ECL
|
POCI
Lifetime
ECL
|
Total
|
Stage 1
12-month
ECL
|
Stage 2
Lifetime
ECL
|
Stage 3
Lifetime
ECL
|
POCI
Lifetime
ECL
|
Total
|
|
Up to date
|
4,356
|
504
|
57
|
–
|
4,917
|
6,885
|
695
|
37
|
–
|
7,617
|
|
1 to 29 days past due
|
2
|
21
|
11
|
–
|
34
|
2
|
28
|
10
|
–
|
40
|
|
30 to 89 days past due
|
–
|
59
|
21
|
–
|
80
|
–
|
61
|
16
|
–
|
77
|
|
90+ days past due
|
–
|
–
|
114
|
–
|
114
|
–
|
–
|
83
|
–
|
83
|
|
Gross carrying amount
|
4,358
|
584
|
203
|
–
|
5,145
|
6,887
|
784
|
146
|
–
|
7,817
|
Consumer lending
|
|
31 December 2024
|
31 December 2023
|
|
£’million
|
Stage 1
12-month
ECL
|
Stage 2
Lifetime
ECL
|
Stage 3
Lifetime
ECL
|
POCI
Lifetime
ECL
|
Total
|
Stage 1
12-month
ECL
|
Stage 2
Lifetime
ECL
|
Stage 3
Lifetime
ECL
|
POCI
Lifetime
ECL
|
Total
|
|
Up to date
|
496
|
141
|
2
|
(1)
|
638
|
900
|
297
|
3
|
–
|
1,200
|
|
1 to 29 days past due
|
0
|
2
|
1
|
–
|
3
|
6
|
2
|
–
|
–
|
8
|
|
30 to 89 days past due
|
0
|
10
|
5
|
–
|
15
|
–
|
15
|
7
|
–
|
22
|
|
90+ days past due
|
0
|
0
|
89
|
–
|
89
|
–
|
–
|
67
|
–
|
67
|
|
Gross carrying amount
|
496
|
153
|
97
|
(1)
|
745
|
906
|
314
|
77
|
–
|
1,297
|
Commercial lending
|
|
31 December 2024
|
31 December 2023
|
|
£’million
|
Stage 1
12-month
ECL
|
Stage 2
Lifetime
ECL
|
Stage 3
Lifetime
ECL
|
POCI
Lifetime
ECL
|
Total
|
Stage 1
12-month
ECL
|
Stage 2
Lifetime
ECL
|
Stage 3
Lifetime
ECL
|
POCI
Lifetime
ECL
|
Total
|
|
Up to date
|
2,841
|
205
|
86
|
-
|
3,132
|
2,768
|
350
|
83
|
–
|
3,201
|
|
1 to 29 days past due
|
27
|
16
|
2
|
–
|
45
|
35
|
24
|
5
|
–
|
64
|
|
30 to 89 days past due
|
–
|
21
|
60
|
–
|
81
|
–
|
39
|
20
|
–
|
59
|
|
90+ days past due
|
–
|
–
|
56
|
–
|
56
|
–
|
–
|
58
|
–
|
58
|
|
Gross carrying amount
|
2,868
|
242
|
204
|
-
|
3,314
|
2,803
|
413
|
166
|
–
|
3,382
|
Credit risk concentration
Retail mortgage lending by repayment type
|
|
31 December 2024
£’million
|
|
31 December 2023
£’million
|
|
|
Retail owner occupied
|
Retail
buy-to-let
|
Total
retail mortgages
|
|
Retail owner occupied
|
Retail
buy-to-let
|
Total
retail mortgages
|
|
Interest only
|
1,330
|
1,398
|
2,728
|
|
1,933
|
1,878
|
3,811
|
|
Capital and repayment
|
2,362
|
55
|
2,417
|
|
3,918
|
88
|
4,006
|
|
Total retail mortgage lending
|
3,692
|
1,453
|
5,145
|
|
5,851
|
1,966
|
7,817
|
Retail mortgage lending by geographic exposure
|
|
31 December 2024
£’million
|
|
31 December 2023
£’million
|
|
|
Retail owner occupied
|
Retail
buy-to-let
|
Total
retail mortgages
|
|
Retail owner occupied
|
Retail
buy-to-let
|
Total
retail mortgages
|
|
Greater London
|
1,324
|
808
|
2,132
|
|
2,040
|
1,091
|
3,131
|
|
South-east
|
975
|
283
|
1,258
|
|
1,564
|
381
|
1,945
|
|
South-west
|
313
|
63
|
376
|
|
487
|
87
|
574
|
|
East of England
|
379
|
114
|
493
|
|
590
|
150
|
740
|
|
North-west
|
155
|
44
|
199
|
|
268
|
65
|
333
|
|
West Midlands
|
154
|
47
|
201
|
|
240
|
71
|
311
|
|
Yorkshire and the Humber
|
107
|
25
|
132
|
|
185
|
32
|
217
|
|
East Midlands
|
104
|
40
|
144
|
|
180
|
53
|
233
|
|
Wales
|
67
|
13
|
80
|
|
111
|
17
|
128
|
|
North-east
|
34
|
7
|
41
|
|
60
|
8
|
68
|
|
Scotland
|
80
|
9
|
89
|
|
126
|
11
|
137
|
|
Total retail mortgage lending
|
3,692
|
1,453
|
5,145
|
|
5,851
|
1,966
|
7,817
|
Retail mortgage lending by DTV
|
|
31 December 2024
£’million
|
|
31 December 2023
£’million
|
|
|
Retail owner occupied
|
Retail
buy-to-let
|
Total
retail mortgages
|
|
Retail owner occupied
|
Retail
buy-to-let
|
Total
retail mortgages
|
|
Less than 50%
|
1,282
|
263
|
1,545
|
|
1,994
|
439
|
2,433
|
|
51–60%
|
601
|
210
|
811
|
|
1,069
|
375
|
1,444
|
|
61–70%
|
611
|
417
|
1,028
|
|
1,044
|
642
|
1,686
|
|
71–80%
|
761
|
543
|
1,304
|
|
1,100
|
493
|
1,593
|
|
81–90%
|
397
|
16
|
413
|
|
550
|
16
|
566
|
|
91–100%
|
39
|
3
|
42
|
|
89
|
–
|
89
|
|
More than 100%
|
1
|
1
|
2
|
|
5
|
1
|
6
|
|
Total retail mortgage lending
|
3,692
|
1,453
|
5,145
|
|
5,851
|
1,966
|
7,817
|
Commercial lending – excluding BBLS by repayment type
|
|
31 December 2024
£’million
|
|
31 December 2023
£’million
|
|
|
Professional
buy-to-let
|
Other
term loans
|
Total commercial term loans
|
|
Professional
buy-to-let
|
Other
term loans
|
Total commercial term loans
|
|
Interest only
|
270
|
393
|
663
|
|
438
|
222
|
660
|
|
Capital and repayment
|
13
|
1,513
|
1,526
|
|
27
|
1,533
|
1,560
|
|
Total commercial term loans
|
283
|
1,906
|
2,189
|
|
465
|
1,755
|
2,220
|
Commercial term lending – excluding BBLS by geographic
exposure
|
|
31 December 2024
£’million
|
|
31 December 2023
£’million
|
|
|
Professional
buy-to-let
|
Other
term loans
|
Total commercial term loans
|
|
Professional
buy-to-let
|
Other
term loans
|
Total commercial term loans
|
|
Greater London
|
181
|
813
|
994
|
|
298
|
880
|
1,178
|
|
South-east
|
48
|
334
|
382
|
|
88
|
340
|
428
|
|
South-west
|
10
|
90
|
100
|
|
15
|
111
|
126
|
|
East of England
|
20
|
200
|
220
|
|
31
|
122
|
153
|
|
North-west
|
7
|
115
|
123
|
|
11
|
106
|
117
|
|
West Midlands
|
3
|
185
|
188
|
|
4
|
101
|
105
|
|
Yorkshire and the Humber
|
2
|
11
|
13
|
|
2
|
17
|
19
|
|
East Midlands
|
6
|
55
|
60
|
|
9
|
44
|
53
|
|
Wales
|
2
|
4
|
6
|
|
3
|
8
|
11
|
|
North-east
|
2
|
73
|
75
|
|
3
|
19
|
22
|
|
Scotland
|
1
|
1
|
2
|
|
–
|
5
|
5
|
|
Northern Ireland
|
-
|
3
|
3
|
|
1
|
2
|
3
|
|
National
|
1
|
22
|
23
|
|
0
|
-
|
-
|
|
Total commercial term loans
|
283
|
1,906
|
2,189
|
|
465
|
1,755
|
2,220
|
Commercial
term lending – excluding BBLS by sector exposure
|
|
31 December 2024
£’million
|
|
31 December 2023
£’million
|
|
|
Professional
buy-to-let
|
Other
term loans
|
Total commercial term loans
|
|
Professional
buy-to-let
|
Other
term loans
|
Total commercial term loans
|
|
Real estate (rent, buy and sell)
|
283
|
414
|
697
|
|
465
|
509
|
974
|
|
Hospitality
|
–
|
442
|
442
|
|
–
|
368
|
368
|
|
Health and social work
|
–
|
430
|
430
|
|
–
|
298
|
298
|
|
Legal, accountancy and consultancy
|
–
|
207
|
207
|
|
–
|
150
|
150
|
|
Retail
|
–
|
122
|
122
|
|
–
|
136
|
136
|
|
Real estate (develop)
|
–
|
14
|
14
|
|
–
|
14
|
14
|
|
Recreation, cultural and sport
|
–
|
82
|
82
|
|
–
|
72
|
72
|
|
Construction
|
–
|
36
|
36
|
|
–
|
48
|
48
|
|
Education
|
–
|
13
|
13
|
|
–
|
19
|
19
|
|
Real estate (management of)
|
–
|
5
|
5
|
|
–
|
7
|
7
|
|
Investment and unit trusts
|
–
|
6
|
6
|
|
–
|
7
|
7
|
|
Other
|
–
|
135
|
135
|
|
–
|
127
|
127
|
|
Total commercial term loans
|
283
|
1,906
|
2,189
|
|
465
|
1,755
|
2,220
|
Commercial term lending – excluding BBLS by DTV
|
|
31 December 2023
£’million
|
|
31 December 2022
£’million
|
|
|
Professional
buy-to-let
|
Other
term
loans
|
Total
commercial term loans
|
|
Professional
buy-to-let
|
Other
term
loans
|
Total
commercial term loans
|
|
Less than 50%
|
81
|
578
|
659
|
|
160
|
707
|
867
|
|
51–60%
|
39
|
414
|
453
|
|
59
|
319
|
378
|
|
61–70%
|
59
|
275
|
334
|
|
105
|
185
|
290
|
|
71–80%
|
64
|
65
|
129
|
|
76
|
79
|
155
|
|
81–90%
|
38
|
82
|
120
|
|
60
|
21
|
81
|
|
91–100%
|
1
|
45
|
46
|
|
2
|
11
|
13
|
|
More than 100%
|
1
|
447
|
448
|
|
3
|
433
|
436
|
|
Total commercial term loans
|
283
|
1,906
|
2,189
|
|
465
|
1,755
|
2,220
|
15.
Legal and regulatory matters
As part of the normal course of business we are subject to legal
and regulatory matters. The matters outlined below represent
contingent liabilities and as such at the reporting date no
provision has been made for any of these cases within the financial
statements. This is because, based on the facts currently known, it
is not practicable to predict the outcome, if any, of these matters
or reliably estimate any financial impact. Their inclusion does not
constitute any admission of wrongdoing or legal
liability.
Magic Money Machine litigation
Arkeyo LLC (“Arkeyo”), a software company based in the United
States, filed a civil suit against us in June 2017 in the United
States District Court for the Eastern District of Pennsylvania
alleging, among other matters, that we misappropriated certain of
Arkeyo’s trade secret technology relating to money counting
machines (i.e., our Magic Money Machines). Arkeyo has sought
damages in respect of a number of claims and attempted to serve the
US proceedings on us in the United Kingdom. This claim was decided
in our favour on jurisdictional grounds. However, Arkeyo has filed
a new claim with a stated value of over £24 million. We believe
Arkeyo LLC’s claims are without merit and are vigorously defending
the claim.
16. Fair value of financial instruments
|
|
31 December 2024
|
|
|
Carrying
value
£’million
|
Quoted
market
price
Level 1
£’million
|
Using
observable
inputs
Level 2
£’million
|
With
significant
unobservable
inputs
Level 3
£’million
|
Total fair
value
£’million
|
|
Assets
|
|
|
|
|
|
|
Loans and advances to customers
|
9,013
|
-
|
-
|
8,982
|
8,982
|
|
Investment securities held at fair value through other
comprehensive income
|
377
|
377
|
–
|
–
|
377
|
|
Investment securities held at amortised cost
|
4,113
|
2,857
|
1,122
|
–
|
3,979
|
|
Derivative financial assets
|
16
|
–
|
16
|
–
|
16
|
|
Liabilities
|
|
|
|
|
|
|
Deposits from customers
|
14,458
|
–
|
–
|
14,459
|
14,459
|
|
Deposits from central bank
|
400
|
–
|
–
|
400
|
400
|
|
Debt securities
|
675
|
–
|
711
|
–
|
711
|
|
Derivative financial liabilities
|
1
|
-
|
1
|
-
|
1
|
|
Repurchase agreements
|
391
|
–
|
–
|
391
|
391
|
|
|
31 December 2023
|
|
|
Carrying
value
£’million
|
Quoted
market
price
Level 1
£’million
|
Using
observable
inputs
Level 2
£’million
|
With
significant
unobservable
inputs
Level 3
£’million
|
Total fair
value
£’million
|
|
Assets
|
|
|
|
|
|
|
Loans and advances to customers
|
12,297
|
–
|
–
|
12,156
|
12,156
|
|
Investment securities held at fair value through other
comprehensive income
|
476
|
476
|
–
|
–
|
476
|
|
Investment securities held at amortised cost
|
4,403
|
3,143
|
1,072
|
–
|
4,215
|
|
Derivative financial assets
|
36
|
–
|
36
|
–
|
36
|
|
Liabilities
|
|
|
|
|
|
|
Deposits from customers
|
15,623
|
–
|
–
|
15,622
|
15,622
|
|
Deposits from central bank
|
3,050
|
–
|
–
|
3,050
|
3,050
|
|
Debt securities
|
694
|
–
|
585
|
–
|
585
|
|
Repurchase agreements
|
1,191
|
–
|
–
|
1,191
|
1,191
|
Information on how fair values are calculated are explained
below:
Loans and advances to customers
Fair value is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of
interest at the balance sheet date, adjusted for future credit
losses and prepayments, if considered material.
Investment securities
The fair value of investment securities is based on either observed
market prices for those securities that have an active trading
market (fair value Level 1 assets) or using observable inputs (in
the case of fair value Level 2 assets).
Financial assets held at fair value through profit and
loss
The financial assets at fair value through profit and loss relate
to the loans and advances previously assumed by the RateSetter
provision fund. They are measured at the fair value of the amounts
that we expect to recover on these loans.
Deposits from customers
Fair values are estimated using discounted cash flows, applying
current rates offered for deposits of similar remaining maturities.
The fair value of a deposit repayable on demand is approximated by
its carrying value.
Debt securities
Fair values are determined using the quoted market price at the
balance sheet date.
Deposits from central banks/repurchase agreements
Fair values are estimated using discounted cash flows, applying
current rates. Fair values approximate carrying amounts as their
balances are either short-dated or are on a variable rate which
aligns to the current market rate.
Derivative financial liabilities
The fair values of derivatives are obtained from discounted cash
flow models as appropriate.
17.
Earnings per share
Basic earnings per share (‘EPS’) is calculated by dividing the
(loss)/profit attributable to ordinary equity holders of Metro Bank
by the weighted average number of ordinary shares in issue during
the period.
Diluted EPS has been calculated by dividing the loss attributable
to our ordinary equity holders by the weighted average number of
ordinary shares in issue during the year plus the weighted average
number of ordinary shares that would be issued on the conversion to
shares of options granted to colleagues.
As we were loss making in the year ended 31 December 2024, the
share options would be antidilutive, as they would reduce the loss
per share. Therefore, all the outstanding options have been
disregarded in the calculation of dilutive EPS for 2024.
|
|
2024
|
2023
|
|
Profit/(loss) attributable to
ordinary equity holders (£’million)
|
42.5
|
29.5
|
|
Weighted average
number of ordinary shares in issue (thousands)
|
|
|
|
Basic
|
672,784
|
214,297
|
|
Adjustment for share
awards
|
2,466
|
6,459
|
|
Diluted
|
675,250
|
220,756
|
|
Earnings per
share (pence)
|
|
|
|
Basic
|
6.3
|
13.8
|
|
Diluted
|
6.3
|
13.4
|
In Q4, 2023, shareholders approved a £925 million capital package
that included £150 million of new equity made up of 500,000 shares.
The new shares increased the weighted average number of ordinary
shares in issue from 214,297 thousand in 2023 to 672,784 thousand
in 2024.
18. Non-cash items
|
|
2024
£’million
|
2023
£’million
|
|
Interest income
|
(935)
|
(856)
|
|
Interest expense
|
558
|
444
|
|
Depreciation and amortisation
|
77
|
78
|
|
Impairment and write-offs of property, plant, equipment and
intangible assets
|
44
|
5
|
|
Expected credit loss expense
|
7
|
33
|
|
Share option charge
|
2
|
3
|
|
Grant income recognised in the income statement
|
(3)
|
(2)
|
|
Amounts provided for (net of amounts released)
|
(8)
|
16
|
|
Haircut on Tier 2 debt
|
-
|
(100)
|
|
(Loss)/gain on sale of assets
|
(101)
|
3
|
|
Total adjustments for non-cash items
|
(359)
|
(376)
|
19. Post balance sheet events
On 26th
February 2025, Metro Bank confirmed entering into an agreement to
sell a portfolio of approximately £584
million performing
unsecured personal loans. The sale of the Portfolio is in line with
Metro Bank’s strategy to reposition its balance sheet and enhance
risk-adjusted returns on capital. The transaction is capital
accretive and creates additional lending capacity to enable Metro
Bank to continue its asset rotation towards higher yielding
commercial, corporate, SME lending and specialist
mortgages.
Reconciliation from statutory to underlying results
|
|
Year ended 31 December 2024
|
Statutory basis
£’million
|
Impairment and write-off of property, plant, equipment and
intangible assets
£’million
|
Net C&I
costs
£’million
|
Transformation costs
£’million
|
Remediation costs
£’million
|
Mortgage Sale £’million
|
Cost associated with capital raise1
£’million
|
Underlying basis
£’million
|
|
|
|
Net interest income
|
377.9
|
–
|
–
|
–
|
–
|
–
|
–
|
377.9
|
|
|
|
Net fee and commission income
|
93.2
|
–
|
–
|
–
|
–
|
–
|
–
|
93.2
|
|
|
|
Net loss on sale of assets
|
(101.4)
|
–
|
–
|
–
|
–
|
101.4
|
–
|
0.00
|
|
|
|
Other income
|
35.6
|
–
|
(3.4)
|
–
|
–
|
0.2
|
-
|
32.4
|
|
|
|
Total income
|
405.3
|
–
|
(3.4)
|
–
|
–
|
101.6
|
-
|
503.5
|
|
|
|
General operating expenses
|
(489.0)
|
–
|
3.4
|
31.1
|
21.3
|
-
|
0.1
|
(433.1)
|
|
|
|
Depreciation and amortisation
|
(77.3)
|
–
|
–
|
–
|
–
|
–
|
–
|
(77.3)
|
|
|
|
Impairment and write-offs of PPE and intangible assets
|
(44.0)
|
44.0
|
–
|
–
|
–
|
–
|
–
|
–
|
|
|
|
Total operating expenses
|
(610.3)
|
44.0
|
3.4
|
31.1
|
21.3
|
-
|
0.1
|
(510.4)
|
|
|
|
Expected credit loss expense
|
(7.1)
|
–
|
–
|
–
|
–
|
–
|
–
|
(7.1)
|
|
|
|
(loss)/profit before tax
|
(212.1)
|
44.0
|
–
|
31.1
|
21.3
|
101.6
|
0.1
|
(14.0)
|
|
|
|
Year ended 31 December 2023
|
Statutory basis
£’million
|
Impairment and write-off of property, plant, equipment and
intangible assets
£’million
|
Net C&I
costs
£’million
|
Transformation costs
£’million
|
Remediation costs
£’million
|
Holding company insertion costs £’million
|
Capital raise and refinancing
£’million
|
Underlying basis
£’million
|
|
|
|
Net interest income
|
411.9
|
–
|
–
|
–
|
–
|
–
|
–
|
411.9
|
|
|
|
Net fee and commission income
|
90.4
|
–
|
–
|
–
|
–
|
–
|
–
|
90.4
|
|
|
|
Net gains on sale of assets
|
2.7
|
–
|
–
|
–
|
–
|
–
|
–
|
2.7
|
|
|
|
Other income
|
143.9
|
–
|
(2.4)
|
–
|
–
|
–
|
(100.0)
|
41.5
|
|
|
|
Total income
|
648.9
|
–
|
(2.4)
|
–
|
–
|
–
|
(100.0)
|
546.5
|
|
|
|
General operating expenses
|
(502.9)
|
–
|
2.4
|
20.2
|
–
|
1.8
|
26.0
|
(452.5)
|
|
|
|
Depreciation and amortisation
|
(77.7)
|
–
|
–
|
–
|
–
|
–
|
–
|
(77.7)
|
|
|
|
Impairment and write-offs of PPE and intangible assets
|
(4.6)
|
4.6
|
–
|
–
|
–
|
–
|
–
|
–
|
|
|
|
Total operating expenses
|
(585.2)
|
4.6
|
2.4
|
20.2
|
–
|
1.8
|
26.0
|
(530.2)
|
|
|
|
Expected credit loss expense
|
(33.2)
|
–
|
–
|
–
|
–
|
–
|
–
|
(33.2)
|
|
|
|
Profit/(loss) before tax
|
30.5
|
4.6
|
–
|
20.2
|
–
|
1.8
|
(74.0)
|
(16.9)
|
|
-
Relates to capital raise in Q4
2023.
Capital
information
Key
metrics
|
|
31 December
2024
£’million
|
31 December
2023
£’million
|
|
Available
capital
|
|
|
|
CET1 capital
|
808
|
985
|
|
Tier 1 capital
|
808
|
985
|
|
Total capital
|
958
|
1,135
|
|
Total capital + MREL
|
1,479
|
1,655
|
|
Risk-weighted
assets
|
|
|
|
Total risk-weighted
assets
|
6,442
|
7,533
|
|
|
|
|
|
Risk-based
capital ratios as % of risk-weighted assets
|
|
|
|
CET1 ratio
|
12.5%
|
13.1%
|
|
Tier 1 ratio
|
12.5%
|
13.1%
|
|
Total capital ratio
|
14.9%
|
15.1%
|
|
MREL ratio
|
23.0%
|
22.0%
|
|
Additional CET1
buffer requirements as % of risk-weighted assets
|
|
|
|
Capital conservation buffer
requirement
|
2.5%
|
2.5%
|
|
Countercyclical buffer
requirement
|
2.0%
|
2.0%
|
|
Total of bank CET1 specific buffer
requirements
|
4.5%
|
4.5%
|
|
|
|
|
|
Leverage
ratio
|
|
|
|
UK leverage ratio
|
5.6%
|
5.3%
|
|
|
|
|
|
Liquidity
coverage ratio
|
|
|
|
Liquidity coverage ratio
|
337%
|
332%
|
Leverage
ratio
The table below shows our Tier 1
Capital and Total Leverage Exposure that are used to derive the UK
leverage ratio. The UK leverage ratio is the ratio of Tier 1
Capital to Total Leverage exposure.
|
|
31 December
2024
£’million
|
31 December
2023
£’million
|
|
Common equity tier 1
capital
|
808
|
985
|
|
Additional tier 1
capital
|
-
|
–
|
|
Tier 1 capital
|
808
|
985
|
|
CRD IV leverage exposure
|
14,416
|
18,420
|
|
UK leverage ratio
|
5.6%
|
5.3%
|
Liquidity
coverage ratio
The table below shows the bank's
Total HQLA and total net cash outflow that are used to derive the
liquidity coverage ratio.
|
|
31 December
2024
£’million
|
31 December
2023
£’million
|
|
Total high-quality liquid
assets
|
6,071
|
6,656
|
|
Total net cash outflow
|
1,799
|
2,002
|
|
Liquidity coverage ratio
|
337%
|
332%
|
Overview of
risk-weighted assets and capital requirements
|
|
31 December
2024
£’million
|
31 December
2023
£’million
|
Pillar 1
capital required
31 December
2024
£’million
|
|
Credit risk (excluding counterparty
credit risk (CCR))
|
5,703
|
6,804
|
456
|
|
Of which the
standardised approach
|
5,703
|
6,804
|
456
|
|
CCR
|
19
|
26
|
2
|
|
Of which mark to
market
|
19
|
26
|
2
|
|
Of which
CVA
|
0
|
0
|
0
|
|
Market risk
|
0
|
0
|
0
|
|
Operational risk
|
720
|
703
|
58
|
|
Of which basic
indicator approach
|
–
|
–
|
|
|
Of which
standardised indicator approach
|
720
|
703
|
|
|
Amounts below the thresholds for
deduction (subject to 250% risk weight)
|
–
|
–
|
|
|
Total
|
6,442
|
7,533
|
515
|
Credit risk
exposures by exposure class
Our Pillar 1 capital requirement
for credit risk is set out in the table below.
|
|
31 December 2024
£’million
|
|
31 December 2023
£’million
|
|
|
Exposure value
|
Capital required
|
|
Exposure value
|
Capital
required
|
|
Central
governments or central banks
|
4,521
|
1
|
|
5,997
|
1
|
|
Exposures
to multilateral development banks
|
1,465
|
–
|
|
1,614
|
–
|
|
Institutions
|
2
|
0
|
|
9
|
–
|
|
Corporates
|
1,100
|
78
|
|
702
|
49
|
|
Retail
|
1,048
|
58
|
|
1,639
|
93
|
|
Secured
by mortgages on immovable property
|
6,206
|
210
|
|
9,061
|
291
|
|
Covered
bonds
|
561
|
4
|
|
706
|
6
|
|
Claims on
institutions and corporates with a short-term credit
assessment
|
61
|
1
|
|
133
|
3
|
|
Securitisation
position
|
1,122
|
10
|
|
1,075
|
10
|
|
Exposure
at default
|
304
|
26
|
|
210
|
17
|
|
Collective
investment undertakings
|
115
|
–
|
|
58
|
–
|
|
Items
associated with particularly high risk
|
4
|
0
|
|
12
|
1
|
|
Other
exposures
|
907
|
68
|
|
973
|
72
|
|
Total
|
17,416
|
456
|
|
22,189
|
544
|
Capital
resources
The table below summarises the
composition of regulatory capital on a proforma basis, including
the profit for the year1.
|
|
|
31 December
2024
£’million
|
31 December
2023
£’million
|
|
Share capital and
premium
|
|
144
|
144
|
|
Retained earnings
|
|
978
|
949
|
|
Profit/(loss) for the
year1
|
|
43
|
29
|
|
Other reserves
|
|
18
|
12
|
|
Intangible assets
|
|
(126)
|
(193)
|
|
Other regulatory
adjustments
|
|
(249)
|
44
|
|
CET 1 capital
|
|
808
|
985
|
|
|
|
|
|
|
Tier 1 capital
|
|
808
|
985
|
|
Tier 2 capital
|
|
150
|
150
|
|
Total capital resources
|
|
958
|
1,135
|
|
|
|
|
|
|
MREL eligible debt
|
|
521
|
520
|
|
TCR + MREL
|
|
1,479
|
1,655
|
-
The profit for the year is
included to show our capital resources on a proforma basis as at 31
December 2024. The profit will only be eligible to be included in
our capital resources following the completion of our audit and
publication of our Annual Report and accounts.
Our capital adequacy was in excess
of the minimum required by the regulators at all times.
Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group.
The issuer is solely responsible for the content of this
announcement.
|
