Metro Bank Holdings Plc said it expects to deliver a further £30 million ($38.4 million) of cost cuts, as the lender continues an overhaul following its rescue in October.
The challenger bank said it expects to deliver the additional cost savings by the end of the year, according to a statement Wednesday. That is on top of the £50 million of savings it expects in the first quarter with around 1,000 employees — about 22% of the workforce — leaving before mid-April.
Underlying loss for the year fell by two-thirds to £16.9 million, the statement said. It cut its guidance for return on tangible equity, a reflection of lower rate expectations, competition for deposits and the UK’s economic outlook.
It now expects to achieve a low-single digit ROTE in 2025, increasing to low-mid teens from 2027. Deposits were broadly stable at £15.6 billion with 52,000 current accounts opened in the fourth quarter, according to the statement.
Metro Bank spent the final months of 2023 securing a rescue deal that shored up confidence in its shares and finances. Colombian billionaire Jaime Gilinski took a controlling stake in the London-based lender as part of the deal.
“There is a long road ahead and execution will be key, but the refinancing package has bought management time to reshape the bank,” RBC analysts said in a research note.
As part of its cost cuts the company is also reducing branch hours although it said it was looking to open new stores in the north of England.
No decision has been made regarding a push to persuade regulators to let it use an internal model for calculating risk-weighted assets that would likely boost the firm’s capital ratios. The bank said its plans don’t depend on accreditation and the work performed on the so-called advanced internal rating-based application remains beneficial to the group.