Metro Bank shares tank on profits miss

Shares in Metro Bank collapsed on Wednesday after it warned that profits are set to miss expectations.

The challenger bank said it expects underlying pre-tax profits to come in at £50 million for 2018, a rise of 138% but below forecasts of £59 million.

Metro also flagged softening trends in the fourth quarter and said it would be stung by an adjustment in the risk weighting of commercial loans secured on property and certain specialist buy-to-let loans.

Risk weighted assets at full year are expected to be approximately £8.9 billion, more than previously thought.

Shares crumbled by more than 25% in morning trade to 1,620p following the news.

But boss Craig Donaldson struck an upbeat tone: “2018 was another strong year of growth for Metro Bank as we continued to invest in both new stores and digital capabilities to win customers, deposits, assets and to create fans.

“Metro Bank remains well positioned to support our growth strategy as we navigate an uncertain period for the UK.”

The trading update showed that assets increased 32% to £21.7 billion in 2018, while the loan book swelled 48% to £14.2 billion.

Deposits reached £15.7 billion, an increase of 34%.

During the fourth quarter, Metro opened branches in Bath, Crawley, Northampton, Putney, Ashford, Piccadilly and Moorgate, taking its store count to 66.