Shares in Metro Bank rallied 6% after the challenger bank unveiled deeper cost cuts and said it may reduce branch opening hours to “simplify operations”.
The lender now expects to save up to £50m annually, identify potential workforce cuts of 20% and is reviewing its seven-day-a-week branch policy. One-off restructuring charges should be £10-15m.
Chief Executive Daniel Frumkin said a £325m capital raise “will allow Metro Bank to accelerate its growth plans” as it strives to be “the number one community bank”.
However, the bank continues to face challenges after a major 2019 accounting error. Metro warned in September it may not get regulatory approval to ease capital rules on its mortgage book.
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But despite today’s rise, Metro Bank stock remains down 67% year-to-date amid its ongoing challenges.
After past troubles, the lender is now hoping to rebuild profits through aggressive cost-cutting. But the potential branching scaling back risks undermining its community bank reputation.
