Metro Bank plc (lon:mtro)
Metro Bank – Progress Or Not?

Metro Bank plc Financials

ItemCurrent PeriodPrevious Period
Year20192018
Period9 Months9 Months
Revenue£316m£294m
Earnings
Adjusted Earnings
EBITDA
Adjusted EBITDA
Statutory Profit(£3m)£34m
Adjusted Profit£11m£39m
Total Debt
Net Debt

Commentary History
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Metro Bank plc Share Price
Grade:The Green Grade - Shares That I Think Are Oversold..
Title: Metro Bank – Progress Or Not?
Company: MTRO - Metro Bank plc
Share Price Then: 193p
Author: Ian Smith
Date: Thu 24 Oct 2019
Comments: I tried something new on Wednesday, buying Metro Bank shares ahead of the latest trading update on the basis that the share price was getting close to reasonable with the protection of a 10% stop loss.

The effective departure of Vernon Hill, the fundraising in May and the loan risk evaluation have taken the gloss of the bank. But as a customer of a bank that has closed it local branch I believe that the branch is still a valuable tool for retaining customers and attracting new ones

With 109k new customers in Q3 it appears that many people seem to agree, however since last year deposits are down from £14.8bn to £14.2bn. With £14.9bn of loans this is a loan/ deposit ratio of 105%.

So why the big swing from a £34m profit (9 months 2018) to a small loss of £2.2m (9 months 2019), especially as Q2 2019 reported a £6.7m profit?

The answer seems to be prudent balance sheet actions which means nothing to me, is the bank now unprofitable or is this a short term blip as the impact of the issues mentioned earlier work their way through the system?

With Vernon Hill gone I see a barrier to the bank being bought by one of the major high street banks removed. Once bought the bank could be operated as a premium brand with branches in only those areas that they are profitable.

The Rolex of banking.
Read Count: 284/10095

Buy/No Buy In A Nutshell
NegativesThe impetus of being a new bank with a new image has gone and it is still not clear that the bank can be meaningfully profitable.
PositivesA valuable customer base for an existing bank.
Initial Review Price112p
Last Review Price95.28p
Last Review Date02-Sep-2020
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