Metro Bank to cut costs to move past difficult year

Bloomberg

Metro Bank Plc plans to cut costs and sell assets to help the struggling lender recover from an accounting scandal that led to heavy losses and the resignation of the firm’s previous boss.
The bank reported a pretax loss of 130.8 million pounds ($170 million) for the year after it scrapped technology projects and unveiled plans to move back-office jobs to cheaper locations and open fewer branches. Metro said it would focus more on specialty mortgages, small- and medium-sized business and unsecured loans.
The losses included 27 million pounds in remediation after Metro Bank revealed errors last year in how it accounted for risk in some of its mortgages — a misstep that UK regulators are probbing.
Metro Bank will also return 50 million pounds of the 120 million pounds it was awarded last year to boost competition in British retail banking.
“An enhanced focus on costs, improved productivity, and investment in our infrastructure will enable our deposit-led franchise to deliver profitable growth over the medium term,” Dan Frumkin, who became the bank’s permanent chief executive officer this month, said.
Metro Bank has a “long path ahead” to achieve its goal of at least 8.5% return on tangible equity by 2024, Joseph Dickerson, an analyst at Jefferies, wrote in a note. Dickerson said the bank will likely face losses in the next couple of years.
The lender’s shares fell as much as 7.7% in early London trading. The stock has fallen more than 80% in the past 12 months.