Metro Bank has reported a 256 per cent increase in the volume of its consumer lending business between the first half of 2020 and the first half of 2021, thanks to the bank’s acquisition of peer-to-peer lending platform RateSetter last year.
According to Metro Bank’s latest financial update, £704m was delivered via consumer loans in the six months ending 30 June 2021. This represents a 245 per cent increase from the full-year 2020 lending figures, and a 256 per cent increase year-on-year.
Total net lending reached £12.325bn in the first six months of this year – a two per cent increase from the full-year 2020 results. However, the bank’s commercial lending and retail mortgage businesses have both been in decline.
The bank did 11 per cent less commercial lending between the first half of 2020 and the first half of 2021; and provided 33 per cent fewer retail mortgages across the same time period.
“Total net loans as at 30 June 2021 were £12.325bn, up two per cent from £12.09bn at 31 December 2020, primarily reflecting the acquisition of the £337m RateSetter consumer back book in April, together with strong organic growth in consumer lending supported by the integration of the RateSetter platform, offset by the attrition of lower-yielding residential mortgages and commercial term loans,” Metro Bank said.
“Total net loans are expected to increase in the second half of the year, with continuing mix shift towards higher yielding assets.”
Consumer lending now represents six per cent of the bank’s overall loan book – up from two per cent on 31 December 2020.
This is a result of “the strong increase in organic lending as the RateSetter platform was rolled-out across all of Metro Bank’s channels and the completion of the RateSetter back book acquisition,” said Metro.
In its half-year financial report, Metro Bank said that the RateSetter back book acquisition helped to accelerate the bank’s shift to higher yielding assets. It is now repositioning its commercial lending business towards full relationship trading businesses, while exiting transactional real estate lending is ongoing.
Overall, the bank made a statutory loss before tax of £138.9m in the first half of 2021 – down from a loss of £240m in the first half of 2020.
“In a challenging environment, Metro Bank has continued to deliver on its strategic priorities,” said Daniel Frumkin, chief executive of Metro Bank.
“As a community bank our colleagues have gone above and beyond for our customers and we’ve enhanced product offerings to meet more of our customers’ needs.
“Financial performance reflects where we are in our turnaround plan, as well as the impact of national lockdowns.
“We are encouraged by the momentum we have achieved, including delivering on higher yielding mortgage products, lower cost of deposits and meaningful entry into the personal lending market.
“Looking ahead, we remain focused on executing the plan and returning to profitable growth, meeting the bank’s strategic objectives and supporting our colleagues, customers and communities.”
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