REG - Metro Bank PLC - Half-year Report <Origin Href="QuoteRef">MTRO.L</Origin> - Part 3

Metro Bank HoldingsAnnouncement

25/07/2017 17:00

- Part 3: For the preceding part double click  ID:nRSY0677Mb 

share capital, issued and fully paid                                                     
 At beginning of the period                               -                         -                        
 Shares issued on exercise of share options               -                         -                        
 At end of the period                                     -                         -                        
 
 
                                             Half year to30 June 2017  Year to31 December 2016  
                                             £'000                     £'000                    
 Share premium account                                                                          
 At beginning of the period                  1,027,645                 629,304                  
 Shares issued on exercise of share options  440                       403,572                  
 Costs of shares issued                      -                         (5,231)                  
 At end of the period                        1,028,085                 1,027,645                
 
 
16.             Earnings per share 
 
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary equity holders of Metro Bank by the weighted average number of
ordinary shares in issue during the period. 
 
 Earnings attributable to ordinary equity holders of Metro Bank (£'000)        3,102     (16,968)  
 Weighted average number of ordinary shares in issue (thousands)               80,379    69,748    
 Basic earnings/(loss) per share (pence)                                       3.9       (24.0)    
 
 
80,379 
 
69,748 
 
Basic earnings/(loss) per share (pence) 
 
3.9 
 
(24.0) 
 
Diluted earnings per share has been calculated based on the same profit or
loss attributable to ordinary equity holders of Metro Bank and weighted
average number of ordinary shares in issue after the effect of adjustment for
potential dilutive ordinary shares, which comprise share options granted to
colleagues. Potential ordinary shares should only be treated as dilutive when
their conversion to ordinary shares results in a reduction in earnings per
share or an increase in loss per share. As Metro Bank had a loss attributable
to ordinary equity holders of Metro Bank in 2016, for this year, the share
options would be antidilutive, as they would reduce the loss per share.
Therefore, they are disregarded in the calculation of dilutive earnings per
share. 
 
 Earnings attributable to ordinary equity holders of Metro Bank (£'000)        3,102     (16,968)  
 Weighted average number of ordinary shares in issue (thousands)               81,889    69,748    
 Diluted earnings/(loss) per share (pence)                                     3.8       (24.0)    
 
 
81,889 
 
69,748 
 
Diluted earnings/(loss) per share (pence) 
 
3.8 
 
(24.0) 
 
17.             Fair value of financial instruments 
 
The fair values of financial instruments are based on market prices, where
available, or are estimated using other valuation techniques. Where financial
instruments are short term in nature or re-price frequently, their fair value
approximates to carrying value. Apart from investment securities all other
assets and liabilities are deemed to have a fair value hierarchy of level 3.
Level 3 is defined as - inputs for the asset or liability that are not based
on observable market data (unobservable inputs). 
 
                                                          Fair value - Valuation techniques  
                                             Carrying     Quoted market price                  Using observable inputs    With significant unobservable inputs    Total fair value  
                                             value        Level 1                              Level 2                    Level 3                                 £'000             
                                             £'000        £'000                                £'000                      £'000                                                     
 30 June 2017                                                                                                                                                                       
 Assets                                                                                                                                                                             
 Cash and balances with the Bank of England  1,114,031    -                                    -                          -                                       1,114,031         
 Loans and advances to banks                 76,041       -                                    -                          76,041                                  76,041            
 Loan and advances to customers              7,749,723    -                                    -                          7,850,112                               7,850,112         
 Investment securities                       3,637,128    612,789                              2,486,075                  -                                       3,098,864         
                                                                                                                                                                                    
 Liabilities                                                                                                                                                                        
 Deposits from customers                     9,804,940    -                                    -                          9,799,053                               9,799,053         
 Deposits from central banks                 1,822,900    -                                    -                          1,822,900                               1,822,900         
 Repurchase agreements                       543,490      -                                    -                          -                                       543,490           
                                                                                                                                                                                    
 31 December 2016                                                                                                                                                                   
 Assets                                                                                                                                                                             
 Cash and balances with the Bank of England  434,612      -                                    -                          -                                       434,612           
 Loans and advances to banks                 65,816       -                                    -                          65,816                                  65,816            
 Loan and advances to customers              5,865,370    -                                    -                          6,093,436                               6,093,436         
 Investment securities                       3,226,715    877,226                              2,378,037                  -                                       3,255,263         
                                                                                                                                                                                    
 Liabilities                                                                                                                                                                        
 Deposits from customers                     7,950,579    -                                    -                          7,946,687                               7,946,687         
 Deposits from central banks                 543,000      -                                    -                          543,000                                 543,000           
 Repurchase agreements                       653,091      -                                    -                          -                                       653,091           
 
 
653,091 
 
For the cash and balances with the Bank of England and repurchase agreements,
the carrying value approximates to the fair value, and therefore no pricing
level has been identified for them above. 
 
Information on how fair values are calculated for the financial assets and
liabilities noted above are explained below: 
 
(a)   Cash and balances with the Bank of England / Loans and advances to
banks 
 
Fair value is calculated based on the present value of future principal and
interest cash flows, discounted at the market rate of interest at the balance
sheet date. Fair values approximate carrying amounts as their balances are
generally short dated. 
 
(b)   Loans and advances to customers 
 
Fair value is calculated based on the present value of future principal and
interest cash flows, discounted at the market rate of interest at the balance
sheet date, adjusted for future credit losses and prepayments, if considered
material. 
 
(c)   Investment securities 
 
The fair value of investment securities is based on either observed market
prices for those securities that have an active trading market (fair value
level 1 assets), or using observable inputs (in the case of fair value level 2
assets). 
 
(d)    Deposits from customers 
 
Fair values are estimated using discounted cash flows, applying current rates
offered for deposits of similar remaining maturities. The fair value of a
deposit repayable on demand is approximated by its carrying value. 
 
(e)   Deposits from central banks / repurchase agreements 
 
Fair values are estimated using discounted cash flows, applying current rates.
Fair values approximate carrying amounts as their balances are generally short
dated. 
 
18.             Related party transactions 
 
There were no changes to the nature of the related party transactions during
the period to 30 June 2017 that would materially affect the position or
performance of the Group. 
 
Architecture, design and branding services are provided to the Group by
InterArch, Inc., ("InterArch") a firm which is owned by Shirley Hill, the wife
of Chairman Vernon W. Hill II.  The cost of these services in the six months
to 30 June 2017 was £2.0 million (six months to 30 June 2016: £1.4 million). 
The balance owed to InterArch at 30 June 2017 was £0.1 million (30 June 2016:
£0.3 million). 
 
19.             Post balance sheet events 
 
There have been no material post balance sheet events. 
 
This information is provided by RNS
The company news service from the London Stock Exchange