Metro Bank saw its retail mortgage lending rise 2% to £7.8bn compared to a year ago, adding that it expects to boost its specialist home loans over the coming year.  

The lender adds it will cut 1,000 jobs, boost its cost-cutting plan and end seven-day branch opening in the wake of its autumn rescue deal.  

“With the feedback from the Prudential Regulation Authority [in September] that we should not expect to receive advanced internal rating-based approval in 2023, our focus going forward will be to dominate in niche parts of the mortgage market where our manual underwriting capacity is a competitive advantage,” the bank says in its full-year stock market statement.  

“This will likely mean that we seek to compete less for vanilla mortgages.”  

The bank posted a pre-tax profit of £30.5m last year, up from a £70.7m loss 12 months earlier, marking its first statutory pre-tax profit since 2018.  

It says profit was driven by boosting its net interest margin – the difference between what it pays out to savers and takes in from borrowers – by 6 basis points to 1.98%  

But overall, the firm’s total lending fell 6% to £12.3bn last year, with mortgages accounting for 63% of its loan book.  

The bank adds it is “on track to deliver £50m of annualised cost savings in the first quarter of this year as previously announced, these savings have been actioned with around 1,000 colleagues, equal to 22% of headcount, leaving before mid-April.”  

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

Its cost savings come on top of £30m of reductions outlined in a refinancing plan approved by shareholders in November.    

In December, Metro Bank scrapped a £3bn mortgage portfolio sale, reported to be with Barclays, citing market conditions.  

Metro Bank chief executive Daniel Frumkin says: “The work we have undertaken this year has laid the path to become a structurally profitable business and our focus towards the SME, Commercial and specialist mortgages sector presents an exciting opportunity in an underserved area of the market.”

In 2019, the bank suffered a £900m accounting scandal, when it emerged that the risk attached to some of its mortgage loans had been underestimated. The business and some of its senior officers were fined £10m for misleading investors.