‘Upon completion, the transaction is capital accretive and will allow us to further optimise our balance sheet as we strengthen our position as a specialist lender of choice’
Metro Bank has agreed a deal to sell off a £584m portfolio of personal loans as it continues to focus on specialist lending areas.
The high street banking player disclosed that the sale will yield an approximate gain of £11m and enable it to boost lending in its target sectors – commercial, corporate, small business and specialist mortgages.
Ahead of its full-year results due this Thursday, Chief Executive Daniel Frumkin said: “The sale of our unsecured personal loan book is in line with our strategy and positions Metro Bank strongly for future growth.
“Upon completion, the transaction is capital accretive and will allow us to further optimise our balance sheet as we strengthen our position as a specialist lender of choice.”
The move, involving loans averaging 2.4 years left to run, scales back Metro’s exposure in unsecured personal loans to a minimal level. Steering clear of new personal and unsecured loans since end-2023 reflects the bank’s strategic tilt.
With around three million UK customers, earlier this year Metro Bank announced cost reductions, including 1,000 job cuts, and ceased the practice of keeping its branches open seven days a week, all part of a plan to cut costs by £80m by end-2024 during its ongoing efficiency drive.
The company has been striving to enhance its performance after shareholders gave the thumbs up to a funding package in late 2023, valued at £925m, to ensure its presence on Britain’s high streets. Shareholders approved a capital raise that saw Colombian billionaire Jaime Gilinski Bacal become the majority shareholder in the group with a 53% stake, while Metro Bank continues to be listed on the London Stock Exchange.
