Metro to focus on niche lending after losses - Mortgage Strategy

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Metro Bank has revealed plans to target the specialist mortgage sectors as it posted losses of more than £130m.

Retail mortgage lending increased by 8 per cent year on year to £10.4bn for 2019, however the bank announced it would be shifting focus to more profitable sectors of the market.

In its results statement the bank says: “Metro Bank will optimise its balance sheet and asset mix whilst focusing on risk adjusted return on regulatory capital. 

“In the short-term, tactical asset disposals will be considered, and in the longer term a number of funding diversification options will be considered to deliver greater risk adjusted returns on capital. 

“The bank will seek a better yielding asset book and improved returns on regulatory capital by rebalancing its lending mix towards areas such as specialist mortgages, SMEs and unsecured loans.”

Today’s results follow a difficult year in which the bank faced two regulatory inquiries and a class action lawsuit, which drove its share price down by 90 per cent. 

The bank has scaled back expansion plans, reducing new branch openings from 71 to 24.

In his statement accompanying the results, new chief executive Dan Frumkin says: “Niche mortgage lending will become a larger share of our mortgage operations and commercial lending to our valued customers will continue to grow.”


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