The lender says it continues to “strategically reposition its balance sheet towards higher yielding specialist mortgages and SME/commercial lending,” in a trading update.

It adds that total lending is 9% lower than a year ago.

The business offers a range of business and personal accounts, loans, credit cards and insurance.

However, the bank will launch into limited buy-to-let mortgages in the second quarter, and is drawing up plans to enter the shared ownership market in the second half of the year.

Metro Bank chief executive Daniel Frumkin said: “Lending activity levels are in line with expectations and the pivot to higher margin commercial and residential lending progresses, with lending balances reflecting the time lag between committing facilities and subsequent drawdown.

“During the period we also maintained our focus on people-people banking and relationship-based services, with further growth across personal and business current accounts.

Frumkin added: “Based on performance in the first quarter we remain confident that financial results will continue to improve throughout 2024 as we optimise funding, deliver on cost savings, continue our asset rotation and benefit from lower-yielding fixed-rate treasury and mortgage maturities.”

Last month the bank reiterated it would cut 1,000 jobs, continue with its £80m cost-cutting plan and end seven-day branch opening in the wake of its autumn rescue deal.

In October, the lender sealed a £925m rescue package that saw Columbian billionaire Jaime Gilinski Bacal take a 53% stake in the business.