Metro Bank targets tripling of return on tangible equity as turnaround plan pays off (updated)

Metro Bank Holdings

04/03/2026 10:15

Adds CEO comment in paragraph 7, share move in paragraph 9, background and details throughout

By Rishab Shaju

March 4 (Reuters) - British lender Metro Bank MTRO.L expects a key profitability metric to more than double over the next six months and nearly triple over the next 18, it said on Wednesday, after the company returned to pretax profit in 2025.

The bank's turnaround strategy, executed after it recorded a loss in fiscal year 2024, saw cost cuts, acceleration into higher-return lending for corporate, commercial, small and medium enterprises, and specialist mortgage lending.

The company expects to deliver a return on tangible equity, a key metric investors use to assess a bank's performance, of 18% or greater for 2028 from 6.4% in 2025.

The FTSE-250 listed bank's underlying profit before tax rose to 98.1 million pounds  ($131.10 million) for the year ended December 31, as compared to a loss of 14 million pounds in the prior year.

After cutting 20% of its workforce in late 2023, CEO Daniel Frumkin told journalists on Wednesday he does not expect any major downsizing in 2026 as costs are expected to be flat this year.

The recent collapse of UK mortgage lender Market Financial Solutions has stoked fears amongst investors as markets grapple with widening cracks and poor lending standards in the private credit market.

However, smaller players like Metro Bank have significant exposure to specialist mortgage lending, aimed at customers who fall outside of traditional lending criteria and follow strict standards.

Frumkin said the collapse "should actually create volume for us, so that's a good thing".

The bank's shares were down about 3% at 0924 GMT following a rout in global markets, after rising as much as 8.2% in early trade.

($1 = 0.7483 pounds)

(Reporting by Rishab Shaju and Sri Hari N S in Bengaluru; Editing by Rashmi Aich and Harikrishnan Nair)

((SriHari.NS@thomsonreuters.com;))