REG - Metro Bank PLC - Preliminary Results for Full Year 2017 <Origin Href="QuoteRef">MTRO.L</Origin> - Part 2
21/02/2018 07:05
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Earnings/(loss) per shareBasic (pence)Diluted (pence) 10 12.8 (22.0)
12.6 (22.0)
Condensed consolidated balance sheet
As at 31 December 2017
Notes 31 December2017 31 December 2016
£'000 £'000
Assets
Cash and balances with the Bank of England 2,111,630 434,612
Loans and advances to banks 5 100,388 65,816
Loans and advances to customers 5 9,620,326 5,865,370
Available for sale investment securities 6 360,704 604,127
Held to maturity investment securities 6 3,553,801 2,622,588
Property, plant and equipment 7 327,550 246,690
Intangible assets 8 148,231 92,515
Prepayments and accrued income 52,785 43,000
Deferred tax asset 4 53,697 56,279
Other assets 26,243 26,291
Total assets 16,355,355 10,057,288
Liabilities
Deposits from customers 11,668,738 7,950,579
Deposits from central banks 3,320,900 543,000
Repurchase agreements 121,558 653,091
Other liabilities 148,270 106,083
Total liabilities 15,259,466 9,252,753
Equity
Called up share capital 9 - -
Share premium 9 1,303,503 1,027,645
Retained earnings (219,404) (230,193)
Other reserves 11,790 7,083
Total equity 1,095,889 804,535
Total equity and liabilities 16,355,355 10,057,288
Condensed consolidated statement of changes in equity
For the year ended 31 December 2017
Share capital Share premium Retained earnings Available for sale reserve Share option reserve Total equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 January 2017 - 1,027,645 (230,193) (3,472) 10,555 804,535
Net profit for the year - - 10,789 - - 10,789
Other comprehensive expense, net of tax, relating to available for sale investments - - - (947) - (947)
Total comprehensive income - - 10,789 (947) - 9,842
Share issue 278,785 - - - 278,785
Cost of share issue (2,927) - - - (2,927)
Net share option movements - - - - 5,654 5,654
Balance as at - 1,303,503 (219,404) (4,419) 16,209 1,095,889
31 December 2017
Balance as at 1 January 2016 - 629,304 (213,440) (12,018) 3,329 407,175
Net loss for the year - - (16,753) - - (16,753)
Other comprehensive income, net of tax, relating to available for sale investments - - - 8,546 - 8,546
Total comprehensive income - - (16,753) 8,546 - (8,207)
Share issue - 403,572 - - - 403,572
Cost of share issue - (5,231) - - - (5,231)
Net share option movements - - - - 7,226 7,226
Balance as at - 1,027,645 (230,193) (3,472) 10,555 804,535
31 December 2016
Notes 9 9
The available-for-sale reserve represents the unrealised change in the fair
value of available for sale investments since initial recognition.
Condensed consolidated cash flow statement
For the year ended 31 December 2017
Notes Year ended Year ended
31 December 2017 31 December 2016
£'000 £'000
Reconciliation of profit/(loss) before tax to net cash flows from operating activities:
Profit/(loss) before tax 18,675 (17,198)
Adjustments for:Loss on disposal of property, plant and equipment and intangible assets 132 -
Impairment and other write-offs of property, plant and equipment and intangible assets 7,8 881 793
Depreciation and amortisation of intangible and tangible assets 7,8 33,430 22,379
Share option charge 3,160 1,873
Gain on sale of securities and fair value gains on derivatives (3,722) (5,376)
Accrued interest on and amortisation of investment securities 2,080 (4,152)
Changes in operating assets (3,755,114) (2,341,143)
Changes in operating liabilities 5,994,389 3,511,726
Net cash inflows from operating activities 2,293,911 1,168,902
Cash flows from investing activities
Sales of investment securities 309,335 2,196,953
Purchase of investment securities (997,280) (3,403,039)
Purchase of property, plant and equipment 7 (99,877) (97,828)
Proceeds from sale of property, plant and equipment and intangible assets 7,8 41 4
Purchase of intangible assets 8 (70,398) (45,053)
Net cash outflows from investing activities (858,179) (1,348,963)
Cash flows from financing activities
Share issues 9 278,785 403,572
Cost of share issues 9 (2,927) (5,231)
Net cash inflows from financing activities 275,858 398,341
Net increase in cash and cash equivalents 1,711,590 218,280
Cash and cash equivalents at start of year 500,428 282,148
Cash and cash equivalents at end of year 2,212,018 500,428
Profit/(loss) before tax includes:
Interest received 296,489 207,678
Interest paid (60,833) (53,246)
Cash and cash equivalents comprise of:
Cash and balances with the Bank of England 2,111,630 434,612
Loans and advances to banks 100,388 65,816
2,212,018 500,428
Notes
1. Summarised accounting policies
The accounting policies and methods of computation are consistent with those
applied in the 2016 Annual Report & Accounts. No new accounting policies have
been adopted in the period under review, other than the adoption of mandatory
accounting standards. The Group adopted IFRS 9, Financial Instruments, on 1
January 2018.
2. Interest income
2017 2016
£'000 £'000
Investment securities 56,873 46,528
Loans and advances to customers 245,073 166,958
Total interest Income 301,946 213,486
3. Interest expense
2017 2016
£'000 £'000
Interest on customer accounts 46,896 48,481
Interest on repurchase agreements 1,554 4,900
Interest on Term Funding Scheme ("TFS") 5,437 187
Other 7,077 5,678
Total interest expense 60,964 59,246
4. Taxation
Income tax (expense)/credit
2017 2016
£'000 £'000
Current tax:
Current income tax (958) (177)
Adjustment in respect of prior years 38 -
Total current tax expense (920) (177)
Deferred tax:
Origination and reversal of temporary differences (5,210) (584)
Effect of changes in tax rates (2,974) 280
Adjustment in respect of prior years 1,218 926
Total deferred tax (expense)/credit (6,966) 622
Total tax (expense)/credit (7,886) 445
4. Taxation (continued)
Reconciliation of the total tax (expense)/credit
The tax (expense)/credit shown in the income statement differs from the tax
(expense)/credit that would apply if all accounting profits had been taxed at
the UK corporation tax rate.
A reconciliation between the tax (expense)/credit and the accounting
profit/(loss) multiplied by the UK corporation tax rate for the years ended 31
December 2017 and 2016 is as follows:
2017 2016
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accounting policies
have been adopted in the period under review, other than the adoption of
mandatory accounting standards. The Group adopted IFRS 9, Financial
Instruments, on 1 January 2018.
2. Interest income
2017 2016
£'000 £'000
Investment securities 56,873 46,528
Loans and advances to customers 245,073 166,958
Total interest Income 301,946 213,486
3. Interest expense
2017 2016
£'000 £'000
Interest on customer accounts 46,896 48,481
Interest on repurchase agreements 1,554 4,900
Interest on Term Funding Scheme ("TFS") 5,437 187
Other 7,077 5,678
Total interest expense 60,964 59,246
4. Taxation
Income tax (expense)/credit
2017 2016
£'000 £'000
Current tax:
Current income tax (958) (177)
Adjustment in respect of prior years 38 -
Total current tax expense (920) (177)
Deferred tax:
Origination and reversal of temporary differences (5,210) (584)
Effect of changes in tax rates (2,974) 280
Adjustment in respect of prior years 1,218 926
Total deferred tax (expense)/credit (6,966) 622
Total tax (expense)/credit (7,886) 445
4. Taxation (continued)
Reconciliation of the total tax (expense)/credit
The tax (expense)/credit shown in the income statement differs from the tax
(expense)/credit that would apply if all accounting profits had been taxed at
the UK corporation tax rate.
A reconciliation between the tax (expense)/credit and the accounting
profit/(loss) multiplied by the UK corporation tax rate for the years ended 31
December 2017 and 2016 is as follows:
2017 2016
£'000 £'000
Accounting profit/(loss) before tax 18,675 (17,198)
Tax expense at statutory income tax rate of 19.25% (2016: 20%) (3,595) 3,440
Tax effects of:
Non-deductible expenses - listing fees - (368)
Non-deductible expenses - depreciation on non-qualifying fixed assets (2,628) (2,261)
Non-deductible expenses - other (537) (863)
Share based payments 630 271
Adjustments in respect of prior years 1,218 (54)
Effect of changes in tax rates (2,974) 280
Total tax credit/(charge) (7,886) 445
Adjustments in respect of prior years
During the period to 31 December 2017 and 2016 we submitted an amendment to
prior year corporate tax returns (years ended 2016 & 2015) that resulted
in an increase in prior period losses. The amendments in 2017 related mainly
to the reclassification of some store costs from non-qualifying to qualifying
expenditure. The amendments in 2016 related mainly to prior period accounting
adjustments to reflect actual VAT recovery following the Bank's agreement of a
Partial Exemption Special Method with HMRC. In addition, 2017 and 2016 include
prior year adjustments to share based payments where the current and deferred
tax treatment has been subsequently revised.
Effect of changes in tax rates
Legislation restricting the amount of profit that may be offset by brought
forward losses to 50% was substantively enacted on 31 October 2017 and was
effective from 1 April 2017. As a result the relevant deferred tax balances
have been remeasured using the effective tax rate that will apply. The impact
of the change in tax rate has been recognised in tax expense. Banks are also
subject to a lower threshold of 25% of profits that can be utilised against
losses accrued by 1 April 2015. However, this loss restriction relief does not
apply to the first five years of banking activity so this particular
restriction will not impact us.
Effective tax rate
The effective tax rate for the year is 42.2% (2016: 2.6%) due to the impact of
the loss restriction relief on the net deferred tax asset. The effective tax
rate on profits, excluding the impact of the loss restriction relief, is
26.3%.
4. Taxation (continued)
Deferred Tax
A deferred tax asset must be regarded as recoverable and therefore recognised
only when, on the basis of all available evidence, it can be regarded as more
likely than not there will be suitable tax profits from which the future of
the underlying timing differences can be deducted.
The following table shows deferred tax recorded in the statement of financial
position and changes recorded in the Income tax expense:
Unused tax losses Available for sale securities £'000 Share based payments £'000 Property, plant & equipment £'000 Intangible assets Total
£'000
£'000
£'000
2017
Deferred tax assets 56,936 1,117 10,990 - 228 69,271
Deferred tax liabilities - (1,226) (368) (7,747) (6,233) (15,574)
Deferred tax assets (net) 56,936 (109) 10,622 (7,747) (6,005) 53,697
At 1 January 2017 61,403 (1,723) 6,195 (4,478) (5,118) 56,279
Income statement (3,787) - 977 (3,269) (887) (6,966)
Other comprehensive income (680) 1,614 - - - 934
Equity - - 3,450 - - 3,450
At 31 December 2017 56,936 (109) 10,622 (7,747) (6,005) 53,697
2016
Deferred tax assets 61,403 183 6,840 - 177 68,603
Deferred tax liabilities - (1,906) (645) (4,478) (5,295) (12,324)
Deferred tax assets (net) 61,403 (1,723) 6,195 (4,478) (5,118) 56,279
At 1 January 2016 56,163 - 1,499 (1,861) (2,748) 53,053
Income statement 6,267 - (658) (2,617) (2,370) 622
Other comprehensive income (1,027) (1,723) - - - (2,750)
Equity - - 5,354 - - 5,354
At 31 December 2016 61,403 (1,723) 6,195 (4,478) (5,118) 56,279
5. Loans and advances to customers and banks
Total loans and advances to customers
31-Dec-2017 31-Dec-2016
£'000 £'000
Gross loans and advances to customers 9,634,687 5,872,864
Less: allowance for impairment (14,361) (7,494)
Net loans and advances to customers 9,620,326 5,865,370
Amounts include:
Repayable on demand or at short notice 160,251 49,215
5. Loans and advances to customers and banks (continued)
Loans and advances to customers by category
31-Dec-2017 31-Dec-2016
£'000 £'000
Individual (retail customers):
Overdraft 85,801 66,088
Credit cards 8,888 7,369
Term loans 121,728 107,584
Mortgages 6,231,415 3,604,591
Corporate:
Overdraft 139,418 32,613
Credit cards 2,255 1,681
Term loans 2,816,499 1,874,104
Asset and Invoice Finance 228,683 164,295
Senior secured lending - 14,539
Gross loans and advances to customers 9,634,687 5,872,864
Loan asset credit quality
All loans and advances are categorised as either "neither past due nor
impaired", "past due but not impaired", "individually impaired" or "portfolio
impaired". For the purposes of the disclosures in the loan asset credit
quality section below:
• A loan is considered past due when the borrower has failed to make a payment
when due under the terms of the loan contract.
• The impairment allowance includes allowances against financial assets that
have been individually impaired and those subject to collective impairment.
• Loans neither past due nor impaired and loans that are past due but not
impaired consist predominantly of corporate and retail loans that are
performing and whilst not individually impaired, may be subject to a
collective impairment allowance.
• Impaired loans that are individually assessed consist predominantly of
corporate loans that are past due and for which an individual allowance has
been raised.
• Portfolio impaired loans, which are not included in the categories above are a
subset of collectively impaired loans and consist predominantly of retail
loans that are 90 days or more past due.
5. Loans and advances to customers and banks (continued)
31 December 2017
Loans and advances to customers £'000 Loans and advance to banks £'000
Neither past due nor impaired 9,486,149 100,388
Past due but not impaired 109,007 -
Individually impaired 12,282 -
Portfolio impaired 27,249 -
Total 9,634,687 100,388
Less: allowance for impairment (14,361) -
Total 9,620,326 100,388
Individually impaired (2,579) -
Collectively impaired* (11,602) -
Total (14,361) -
31 December 2016
Loans and advances to customers £'000 Loans and advance to banks £'000
Neither past due nor impaired 5,762,719 65,816
Past due but not impaired 88,811 -
Individually impaired 6,555 -
Portfolio impaired 14,779 -
Total 5,872,864 65,816
Less: allowance for impairment (7,494) -
Total 5,865,370 65,816
Individually impaired (1,825) -
Collectively impaired* (5,669) -
Total (7,494) -
*The collectively impaired provision includes provisions held against loans
which are included in the neither past due nor impaired, the past due but not
impaired and the portfolio impaired categories shown above.
5. Loans and advances to customers and banks (continued)
31-Dec-2017 31-Dec-2016
£'000 £'000
Allowance for impairment at 1 January (7,494) (6,783)
Write offs 1,423 3,483
Balance sheet reclassification of operational loss provision - 924
Increase in impairment allowance (8,290) (5,118)
Allowance for impairment at 31 December (14,361) (7,494)
Credit impairment charges in the Consolidated Statement of Comprehensive
Income are shown net of recoveries on previously written off loans.
Past due but not impaired
Late processing and other administrative delays on the side of the borrower
can lead to a financial asset being in early past due but not impaired.
Gross amounts of loans and advances by class to customers that were past due
but not impaired were as follows:
31 December 2017
Mortgages £'000 Corporate £'000 Other £'000 Total £'000
Past due less than 7 days 26,972 36,922 1,322 65,216
Past due 7-30 days 19,373 18,665 823 38,860
Past due 31-60 days 2,447 447 599 3,493
Past due 61-90 days 830 67 541 1,438
Over 90 days - - - -
Total 49,621 56,101 3,285 109,007
31 December 2016
Mortgages £'000 Corporate £'000 Other £'000 Total £'000
Past due 7 days 15,994 45,237 958 62,189
Past due 7-30 days 5,859 14,710 1,984 22,553
Past due 31-60 days 2,051 96 631 2,778
Past due 61-90 days 599 60 461 1,120
Over 90 days - 171 - 171
Total 24,503 60,274 4,034 88,811
6. Investment securities
Fair values of investment securities held at fair value Level 1 Level 2 Total
£'000 £'000 £'000
Recurring fair value measurements
As at 31 December 2017
Financial investments: available for sale 289,941 70,763 360,704
As at 31 December 2016
Financial investments: available for sale 274,027 330,100 604,127
The classification of a financial instrument is based on the lowest level
input that is significant to the fair value measurement in its entirety. The
two levels of the fair value hierarchy relevant to the Group are defined
below.
Quoted market prices - Level 1
Financial instruments are classified as Level 1 if their value is observable
in an active market. Such instruments are valued by reference to unadjusted
quoted prices for identical assets or liabilities in active markets where the
quoted price is readily available, and the price represents actual and
regularly occurring market transactions on an arm's length basis. An active
market is one in which transactions occur with sufficient volume and frequency
to provide pricing information on an ongoing basis.
Valuation technique using observable inputs - Level 2
Inputs other than quoted prices included within Level 1 that are observable
for the asset, either directly (as prices) or indirectly (derived from
prices).
Reclassifications between categories
On 17 February 2017 £33.2 million, 18 April 2017 £60.4 million, 21 November
2017 £95 million, 19 December 2017 £87.8 million and on 22 December 2017
£46.1 million of financial assets classified as available for sale were
reclassified as held to maturity. The carrying amount (excluding accrued
interest) and fair value of the assets at 31 December were as follows:
Carrying amount Fair value
£'000 £'000
At 31 December 2017 313,857 323,369
A £1.2 million fair value gain was recognised with respect to the
reclassified assets in 2017; had these assets not been reclassified, a
additional fair value gain of £0.9 million would have been recognised in
other comprehensive income. The effective interest rates on available for sale
assets reclassified to held to maturity at 1 January 2017 and 31 December 2017
ranged from 0.96 £'000 £'000
Accounting profit/(loss) before tax 18,675 (17,198)
Tax expense at statutory income tax rate of 19.25% (2016: 20%) (3,595) 3,440
Tax effects of:
Non-deductible expenses - listing fees - (368)
Non-deductible expenses - depreciation on non-qualifying fixed assets (2,628) (2,261)
Non-deductible expenses - other (537) (863)
Share based payments 630 271
Adjustments in respect of prior years 1,218 (54)
Effect of changes in tax rates (2,974) 280
Total tax credit/(charge) (7,886) 445
Adjustments in respect of prior years
During the period to 31 December 2017 and 2016 we submitted an amendment to
prior year corporate tax returns (years ended 2016 & 2015) that resulted in an
increase in prior period losses. The amendments in 2017 related mainly to the
reclassification of some store costs from non-qualifying to qualifying
expenditure. The amendments in 2016 related mainly to prior period accounting
adjustments to reflect actual VAT recovery following the Bank's agreement of a
Partial Exemption Special Method with HMRC. In addition, 2017 and 2016 include
prior year adjustments to share based payments where the current and deferred
tax treatment has been subsequently revised.
Effect of changes in tax rates
Legislation restricting the amount of profit that may be offset by brought
forward losses to 50% was substantively enacted on 31 October 2017 and was
effective from 1 April 2017. As a result the relevant deferred tax balances
have been remeasured using the effective tax rate that will apply. The impact
of the change in tax rate has been recognised in tax expense. Banks are also
subject to a lower threshold of 25% of profits that can be utilised against
losses accrued by 1 April 2015. However, this loss restriction relief does not
apply to the first five years of banking activity so this particular
restriction will not impact us.
Effective tax rate
The effective tax rate for the year is 42.2% (2016: 2.6%) due to the impact of
the loss restriction relief on the net deferred tax asset. The effective tax
rate on profits, excluding the impact of the loss restriction relief, is
26.3%.
4. Taxation (continued)
Deferred Tax
A deferred tax asset must be regarded as recoverable and therefore recognised
only when, on the basis of all available evidence, it can be regarded as more
likely than not there will be suitable tax profits from which the future of
the underlying timing differences can be deducted.
The following table shows deferred tax recorded in the statement of financial
position and changes recorded in the Income tax expense:
Unused tax losses £'000 Available for sale securities Share based payments Property, plant & equipment Intangible assets Total £'000
£'000 £'000 £'000 £'000
2017
Deferred tax assets 56,936 1,117 10,990 - 228 69,271
Deferred tax liabilities - (1,226) (368) (7,747) (6,233) (15,574)
Deferred tax assets (net) 56,936 (109) 10,622 (7,747) (6,005) 53,697
At 1 January 2017 61,403 (1,723) 6,195 (4,478) (5,118) 56,279
Income statement (3,787) - 977 (3,269) (887) (6,966)
Other comprehensive income (680) 1,614 - - - 934
Equity - - 3,450 - - 3,450
At 31 December 2017 56,936 (109) 10,622 (7,747) (6,005) 53,697
2016
Deferred tax assets 61,403 183 6,840 - 177 68,603
Deferred tax liabilities - (1,906) (645) (4,478) (5,295) (12,324)
Deferred tax assets (net) 61,403 (1,723) 6,195 (4,478) (5,118) 56,279
At 1 January 2016 56,163 - 1,499 (1,861) (2,748) 53,053
Income statement 6,267 - (658) (2,617) (2,370) 622
Other comprehensive income (1,027) (1,723) - - - (2,750)
Equity - - 5,354 - - 5,354
At 31 December 2016 61,403 (1,723) 6,195 (4,478) (5,118) 56,279
5. Loans and advances to customers and banks
Total loans and advances to customers
31-Dec-2017 31-Dec-2016
£'000 £'000
Gross loans and advances to customers 9,634,687 5,872,864
Less: allowance for impairment (14,361) (7,494)
Net loans and advances to customers 9,620,326 5,865,370
Amounts include:
Repayable on demand or at short notice 160,251 49,215
5. Loans and advances to customers and banks (continued)
Loans and advances to customers by category
31-Dec-2017 31-Dec-2016
£'000 £'000
Individual (retail customers):
Overdraft 85,801 66,088
Credit cards 8,888 7,369
Term loans 121,728 107,584
Mortgages 6,231,415 3,604,591
Corporate:
Overdraft 139,418 32,613
Credit cards 2,255 1,681
Term % to 3.65%, with all cash flows expected to be recoverable.
At 31 December 2017, financial investments classified as held to maturity were
as follows:
Carrying amount Fair value
£'000 £'000
At 31 December 2017 3,553,801 3,590,350
At 31 December 2016 2,622,588 2,651,136
7. Property, plant and equipment
Leasehold improvements Freehold land and buildings £'000 Fixtures, fittings and equipment £'000 IT hardware £'000 Total £'000
£'000
Investment property
£'000
Cost or valuation
01-Jan-2017 - 171,056 84,571 20,817 30,731 307,175
Additions 3,305 36,226 50,421 5,827 4,098 99,877
Disposals - (87) - (143) (21) (251)
Write offs - (186) (53) - - (239)
Transfers 7,547 (8,440) 956 (63) - -
Reclassifications - (69) (372) - - (441)
31-Dec-2017 10,852 198,500 135,523 26,438 34,808 406,121
Accumulated depreciation
01-Jan-2017 - 21,982 3,376 10,937 24,190 60,485
Impairments - 251 - - 80 331
Charge for the year 81 8,171 1,216 3,739 4,672 17,879
Disposals - (2) - (82) (10) (94)
Write-offs - (14) (13) - - (27)
Transfers - (781) 1,018 (237) - -
Reclassifications - (3) - - - (3)
31-Dec-2017 81 29,604 5,597 14,357 28,932 78,571
Net book value 10,771 168,896 129,926 12,081 5,876 327,550
Leasehold improvements Freehold land and buildings £'000 Fixtures, fittings and equipment £'000 IT hardware £'000 Total £'000
£'000
Investment property
£'000
Cost or valuation
01-Jan-2016 - 156,238 8,273 17,400 27,439 209,350
Additions - 46,444 44,672 3,417 3,295 97,828
Disposals - - - - (3) (3)
Transfers - (31,626) 31,626 - - -
31-Dec-2016 - 171,056 84,571 20,817 30,731 307,175
Accumulated depreciation
01-Jan-2016 - 17,110 - 7,920 19,063 44,093
Impairments - 35 - 161 44 240
Charge for the year - 6,800 1,000 2,834 5,054 15,688
Write offs - 413 - 22 29 464
Transfers - (2,376) 2,376 - - -
31-Dec-2016 - 21,982 3,376 10,937 24,190 60,485
Net book value - 149,074 81,195 9,880 6,541 246,690
8. Intangible assets
Goodwill Customer contracts Software Total
£'000 £'000 £'000 £'000
Cost or valuation
01-Jan-2017 4,140 600 101,797 106,537
Additions - - 70,398 70,398
Disposals - - (22) (22)
Write offs - - (30) (30)
Reclassifications - - 1,545 1,545
31-Dec-2017 4,140 600 173,688 178,428
Amortisation
01-Jan-2017 - 205 13,817 14,022
Impairments - - 308 308
Charge for the year - 60 15,491 15,551
Disposals - - (6) (6)
Reclassifications - - 322 322
31-Dec-2017 - 265 29,932 30,197
Net book value 4,140 335 143,756 148,231
Goodwill Customer contracts Software
Total
Cost or valuation £'000 £'000 £'000 £'000
01-Jan-2016 4,140 600 56,745 61,485
Additions - - 45,053 45,053
Disposals - - (1) (1)
31-Dec-2016 4,140 600 101,797 106,537
Amortisation
01-Jan-2016 - 145 7,097 7,242
Impairments - - 75 75
Charge for the year - 60 6,631 6,691
Write offs - - 14 14
31-Dec-2016 - 205 13,817 14,022
Net book value 4,140 395 87,980 92,515
9. Share capital
We only have a single class of shares. As at 31 December 2017 we had 88.5
million ordinary shares of 0.0001p (31 December 2016: 80.3 million) authorised
and in issue.
In July 2017, we issued 8.02 million ordinary shares of 0.0001p each, for
consideration of £278 million. Related transaction costs of £2.9 million
have been deducted from equity during the period.
Additionally, during the year we issued 0.2 million ordinary shares which
relate to the exercise of previously awarded share options. These options
contributed £892,000 to share premium.
31-Dec-2017 31-Dec-2016
£'000 £'000
Called up ordinary share capital, issued and fully paid
At beginning of year - -
Issued - -
At end of year - -
31-Dec-2017 31-Dec-2016
£'000 £'000
Share premium account
At beginning of year 1,027,645 629,304
Issued 278,785 403,572
Costs of share issued (2,927) (5,231)
At end of year 1,303,503 1,027,645
10. Earnings per share
Basic earnings/(loss) per share is calculated by dividing the earnings/(loss)
attributable to ordinary equity holders of Metro Bank by the weighted average
number of ordinary shares in issue during the period.
2017 2016
£'000 £'000
Earnings/(loss) attributable to ordinary equity holders of Metro Bank 10,789 (16,753)
Weighted average number of ordinary shares in issue - basic ('000) 84,412 76,791
Basic earnings/(loss) per share (pence) 12.8 (22.0)
Diluted earnings/(loss) per share has been calculated based on the same
earnings 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 are treated as
dilutive when their conversion to ordinary shares results in a reduction in
earnings 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. At 31 December
2017 all outstanding share options were considered dilutive.
2017 2016
£'000 £'000
Earnings/(loss) attributable to ordinary equity holders of Metro Bank 10,789 (16,753)
Weighted average number of ordinary shares in issue -diluted ('000) 85,927 76,791
Diluted earnings/(loss) per share (pence) 12.6 (22.0)
There have been no transactions involving ordinary shares or potential
ordinary shares between the reporting date and the date of the completion of
these financial statements which would require the restatement of EPS.
11. 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 they are
short-term in nature or re-price frequently, 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). This level includes equity
investments and debt instruments with significant unobservable components.
With
Quoted Using significant
market observable unobservable
Carrying price inputs inputs Total
Value Level 1 Level 2 Level 3 Fair Value
31-Dec-2017 £'000 £'000 £'000 £'000 £'000
Assets
Cash and balances with the Bank of England 2,111,630 - - 2,111,630 2,111,630
Loans and advances to banks 100,388 - - 100,388 100,388
Loan and advances to customers 9,620,326 - - 10,084,203 10,084,203
Investment securities 3,914,506 922,006 3,029,048 - 3,951,054
Liabilities
Deposits from customers 11,668,738 - - 11,650,419 11,650,419
Deposits from central banks 3,320,900 - - 3,320,900 3,320,900
Repurchase agreements 121,558 - - 121,558 121,558
31-Dec-2016
Assets
Cash and balances with the Bank of England 434,612 - - 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.
11. Fair value of financial instruments (continued)
(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.
12. Related party transactions
Key management personnel
Our key management personnel, and persons connected with them, are considered
to be related parties for disclosure purposes. Key management personnel are
defined as those persons having authority and responsibility for planning,
directing and controlling the activities of the Group. The Directors and
members of the Executive Leadership Team are considered to be the key
management personnel for disclosure purposes.
Key management compensation
Total compensation cost for key management personnel for the year by category
of benefit was as follows:
2017 2016
£'000 £'000
Short-term employee benefits 4,817 3,891
Share based payment cost 2,388 4,108
Total compensation for key management personnel 7,205 loans 2,816,499 1,874,104
Asset and Invoice Finance 228,683 164,295
Senior secured lending - 14,539
Gross loans and advances to customers 9,634,687 5,872,864
Loan asset credit quality
All loans and advances are categorised as either "neither past due nor
impaired", "past due but not impaired", "individually impaired" or "portfolio
impaired". For the purposes of the disclosures in the loan asset credit
quality section below:
• A loan is considered past due when the borrower has failed to make a payment when due under the terms of the loan contract.
• The impairment allowance includes allowances against financial assets that have been individually impaired and those subject to collective impairment.
• Loans neither past due nor impaired and loans that are past due but not impaired consist predominantly of corporate and retail loans that are performing and whilst not individually impaired, may be subject to a collective impairment allowance.
• Impaired loans that are individually assessed consist predominantly of corporate loans that are past due and for which an individual allowance has been raised.
• Portfolio impaired loans, which are not included in the categories above are a subset of collectively impaired loans and consist predominantly of retail loans that are 90 days or more past due.
5. Loans and advances to customers and banks (continued)
31 December 2017
Loans and advances to customers Loans and advance
£'000 to banks
£'000
Neither past due nor impaired 9,486,149 100,388
Past due but not impaired 109,007 -
Individually impaired 12,282 -
Portfolio impaired 27,249 -
Total 9,634,687 100,388
Less: allowance for impairment (14,361) -
Total 9,620,326 100,388
Individually impaired (2,579) -
Collectively impaired* (11,602) -
Total (14,361) -
31 December 2016
Loans and advances to customers Loans and advance
£'000 to banks
£'000
Neither past due nor impaired 5,762,719 65,816
Past due but not impaired 88,811 -
Individually impaired 6,555 -
Portfolio impaired 14,779 -
Total 5,872,864 65,816
Less: allowance for impairment (7,494) -
Total 5,865,370 65,816
Individually impaired (1,825) -
Collectively impaired* (5,669) -
Total (7,494) -
*The collectively impaired provision includes provisions held against loans
which are included in the neither past due nor impaired, the past due but not
impaired and the portfolio impaired categories shown above.
5. Loans and advances to customers and banks (continued)
31-Dec-2017 31-Dec-2016
£'000 £'000
Allowance for impairment at 1 January (7,494) (6,783)
Write offs 1,423 3,483
Balance sheet reclassification of operational loss provision - 924
Increase in impairment allowance (8,290) (5,118)
Allowance for impairment at 31 December (14,361) (7,494)
Credit impairment charges in the Consolidated Statement of Comprehensive
Income are shown net of recoveries on previously written off loans.
Past due but not impaired
Late processing and other administrative delays on the side of the borrower
can lead to a financial asset being in early past due but not impaired.
Gross amounts of loans and advances by class to customers that were past due
but not impaired were as follows:
31 December 2017
Mortgages Corporate Other Total
£'000 £'000 £'000 £'000
Past due less than 7 days 26,972 36,922 1,322 65,216
Past due 7-30 days 19,373 18,665 823 38,860
Past due 31-60 days 2,447 447 599 3,493
Past due 61-90 days 830 67 541 1,438
Over 90 days - - - -
Total 49,621 56,101 3,285 109,007
31 December 2016
Mortgages Corporate Other Total
£'000 £'000 £'000 £'000
Past due 7 days 15,994 45,237 958 62,189
Past due 7-30 days 5,859 14,710 1,984 22,553
Past due 31-60 days 2,051 96 631 2,778
Past due 61-90 days 599 60 461 1,120
Over 90 days - 171 - 171
Total 24,503 60,274 4,034 88,811
6. Investment securities
Fair values of investment securities held at fair value Level 1 Level 2 Total
£'000 £'000 £'000
Recurring fair value measurements
As at 31 December 2017
Financial investments: available for sale 289,941 70,763 360,704
As at 31 December 2016
Financ 7,999
Short-term employee benefits include salary, medical insurance, bonuses and
cash allowances paid to key management personnel. The share-based payment cost
includes the IFRS 2 charge for the year associated with listing awards awarded
in previous years. The cost includes the in-year IFRS 2 costs for Listing
Share Awards granted to selected key management personnel in recognition of
their significant contribution to the successful private placement and
admission of Metro Bank to the London Stock Exchange.
12. Related party transactions (continued)
Banking transactions with key management
The Group provides banking services to Directors and other key management
personnel and persons connected to them. Loan transactions during the year and
the balances outstanding at 31 December were as follows:
2017 2016
Loans payable to the bank £'000 £'000
Loans outstanding at 1 January 3,191 2,529
Loans relating to former key management personnel - (529)
Loans relating to persons and companies no longer considered related parties (321) -
Loans outstanding at 1 January for current key management personnel 2,870 2,000
Loans issued during the year 349 1,250
Loan repayments during the year (262) (59)
Loans outstanding at 31 December 2,957 3,191
Interest expense on loans payable to the bank 80 82
There were seven (31 December 2016: nine) loans outstanding at 31 December
2017 totalling £3.0m (31 December 2016: £3.2m). Of these, six are
residential mortgages and one is an unsecured loan; all loans were provided on
normal commercial terms which can be found on our website
(www.metrobankonline.co.uk).
In addition to the loans detailed above, the bank has issued credit cards and
granted overdraft facilities on current accounts to directors and key
management personnel. At 31 December 2017 there was only one overdrawn current
account (£296) to directors and key management personnel and all outstanding
credit card balances were repaid in January 2017.
Credit card balances outstanding at 31 December were as follows:
2017 2016
£'000 £'000
Credit cards outstanding at 31 December 27 10
Deposit balances outstanding at 31 December were as follows:
2017 2016
£'000 £'000
Deposits outstanding at 1 January 5,193 4,544
Deposits relating to persons and companies no longer considered related (2,967) -
parties
Deposits relating to new key management personnel 44 -
Net amounts deposited 1,163 649
Deposits outstanding at 31 December 3,433 5,193
12. Related party transactions (continued)
Other transactions with related parties
The following transactions were carried out with related parties:
2017 2016
£'000 £'000
Architectural design services 4,135 2,635
Branding, marketing and advertising 513 521
Total purchase of services with entities connected to key management personnel 4,648 3,156
Amounts outstanding as at 31 December owed by Metro Bank 23 382
Architecture, design and branding services are provided by InterArch, Inc.
("InterArch"), a firm which is owned by Shirley Hill, the wife of Vernon W.
Hill, II, the Non-Executive
Chairman.
In order to ensure that the terms of the InterArch arrangements are consistent
with those that could be obtained from an independent third party and in
accordance with the Articles, the contractual arrangements with InterArch are
subject to periodic review by our Audit Committee using benchmarking reviews
conducted by independent third parties. The Audit Committee have concluded
that contracts for services with InterArch are at arm's length and are at
least as beneficial as those which could be obtained in the market from an
alternative supplier.
Architectural design
services
InterArch provide various architectural design services, including pre-design,
architectural design, interior design, facilities coordination, construction
management, landscape architectural, signage, security design and layout and
procurement services. The fee structure for each project is based on a fixed
percentage of projected hard costs. Certain additional services are provided
on an hourly basis. The contract for architectural design services is
currently under renegotiation and the Audit Committee has taken steps to
ensure that it will continue to be at arm's length as part of the
renegotiation process.
Branding, Marketing and Advertising
InterArch also provide branding, marketing and advertising services. The
agreement terminated on 31 December 2017 and a new agreement was signed in
January 2018 covering the period up to 31 December
2018.
13. Post Balance Sheet Events
There have been no reportable post balance sheet events.
Forward looking statements
This announcement may include statements that are, or may be deemed to be,
forward-looking statements. Forward-looking statements typically use terms
such as "believes", "projects", "anticipates", "expects", "intends", "plans",
"may", "will", "would", "could" or "should" or similar terminology. Any
forward-looking statements in this announcement are based on the Company's
current expectations and, by their nature, forward-looking statements are
subject to a number of risks and uncertainties, many of which are beyond the
Company's control, that could cause the Company's actual results and
performance to differ materially from any expected future results or
performance expressed or implied by any forward-looking statements. As a
result, you are cautioned not to place undue reliance on such forward-looking
statements. Past performance should not be taken as an indication or guarantee
of future results, and no representation or warranty, expressed or implied, is
made regarding future performance. No assurances can be given that the
forward-looking statements in this announcement will be realised. The Company
undertakes no obligation to release the results of any revisions to any
forward-looking statements in this announcement that may occur due to any
change in its expectations or to reflect events or circumstances after the
date of this announcement and the Company disclaims any such obligation.
ENDS
About Metro Bank
Metro Bank is the revolution in British banking. It is celebrated for its
exceptional customer experience and its trusted products, and was awarded
'Most Trusted Financial Provider' at the Moneywise Customer Service Awards
2017, as well as 'Best Financial Provider' at the Evening Standard Business
Awards 2017 and 'Bank of the Year' at the CityAM Awards 2016.
Offering retail, business, commercial and private banking services, it prides
itself on using technology to give customers the choice to bank however,
whenever and wherever they choose. Whether that's through its growing network
of stores open seven days a week, from early in the morning to late at night,
362 days a year; on the phone through its UK-based 24/7 contact centres manned
by people not machines; or online through its internet banking or
award-winning mobile app.
The bank employs over 3,000 colleagues and is headquartered in Holborn,
London.
Metro Bank PLC. Registered in England and Wales. Company number: 6419578.
Registered office: One Southampton Row, London, WC1B 5HA. 'Metrobank' is the
registered trade mark of Metro Bank PLC.
It is authorised by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and Prudential Regulation Authority. Most relevant
deposits are protected by the Financial Services Compensation Scheme. For
further information about the Scheme refer to the FSCS website www.fscs.org.uk
(http://www.fscs.org.uk) .
All Metro Bank products are subject to status and approval.
This information is provided by RNS
The company news service from the London Stock Exchange
ial investments: available for sale 274,027 330,100 604,127
The classification of a financial instrument is based on the lowest level
input that is significant to the fair value measurement in its entirety. The
two levels of the fair value hierarchy relevant to the Group are defined
below.
Quoted market prices - Level 1
Financial instruments are classified as Level 1 if their value is observable
in an active market. Such instruments are valued by reference to unadjusted
quoted prices for identical assets or liabilities in active markets where the
quoted price is readily available, and the price represents actual and
regularly occurring market transactions on an arm's length basis. An active
market is one in which transactions occur with sufficient volume and frequency
to provide pricing information on an ongoing basis.
Valuation technique using observable inputs - Level 2
Inputs other than quoted prices included within Level 1 that are observable
for the asset, either directly (as prices) or indirectly (derived from
prices).
Reclassifications between categories
On 17 February 2017 £33.2 million, 18 April 2017 £60.4 million, 21 November
2017 £95 million, 19 December 2017 £87.8 million and on 22 December 2017 £46.1
million of financial assets classified as available for sale were reclassified
as held to maturity. The carrying amount (excluding accrued interest) and fair
value of the assets at 31 December were as follows:
Carrying amount Fair value
£'000 £'000
At 31 December 2017 313,857 323,369
A £1.2 million fair value gain was recognised with respect to the reclassified
assets in 2017; had these assets not been reclassified, a additional fair
value gain of £0.9 million would have been recognised in other comprehensive
income. The effective interest rates on available for sale assets reclassified
to held to maturity at 1 January 2017 and 31 December 2017 ranged from 0.96%
to 3.65%, with all cash flows expected to be recoverable.
At 31 December 2017, financial investments classified as held to maturity were
as follows:
Carrying amount Fair value
£'000 £'000
At 31 December 2017 3,553,801 3,590,350
At 31 December 2016 2,622,588 2,651,136
7. Property, plant and equipment
Leasehold improvements£'000 Freehold land and buildings £'000 Fixtures, fittings and equipment £'000 IT hardware £'000 Total £'000
Investment property
£'000
Cost or valuation
01-Jan-2017 - 171,056 84,571 20,817 30,731 307,175
Additions 3,305 36,226 50,421 5,827 4,098 99,877
Disposals - (87) - (143) (21) (251)
Write offs - (186) (53) - - (239)
Transfers 7,547 (8,440) 956 (63) - -
Reclassifications - (69) (372) - - (441)
31-Dec-2017 10,852 198,500 135,523 26,438 34,808 406,121
Accumulated depreciation
01-Jan-2017 - 21,982 3,376 10,937 24,190 60,485
Impairments - 251 - - 80 331
Charge for the year 81 8,171 1,216 3,739 4,672 17,879
Disposals - (2) - (82) (10) (94)
Write-offs - (14) (13) - - (27)
Transfers - (781) 1,018 (237) - -
Reclassifications - (3) - - - (3)
31-Dec-2017 81 29,604 5,597 14,357 28,932 78,571
Net book value 10,771 168,896 129,926 12,081 5,876 327,550
Leasehold improvements£'000 Freehold land and buildings £'000 Fixtures, fittings and equipment £'000 IT hardware £'000 Total £'000
Investment property
£'000
Cost or valuation
01-Jan-2016 - 156,238 8,273 17,400 27,439 209,350
Additions - 46,444 44,672 3,417 3,295 97,828
Disposals - - - - (3) (3)
Transfers - (31,626) 31,626 - - -
31-Dec-2016 - 171,056 84,571 20,817 30,731 307,175
Accumulated depreciation
01-Jan-2016 - 17,110 - 7,920 19,063 44,093
Impairments - 35 - 161 44 240
Charge for the year - 6,800 1,000 2,834 5,054 15,688
Write offs - 413 - 22 29 464
Transfers - (2,376) 2,376 - - -
31-Dec-2016 - 21,982 3,376 10,937 24,190 60,485
Net book value - 149,074 81,195 9,880 6,541 246,690
8. Intangible assets
Goodwill Customer contracts Software Total
£'000 £'000 £'000 £'000
Cost or valuation
01-Jan-2017 4,140 600 101,797 106,537
Additions - - 70,398 70,398
Disposals - - (22) (22)
Write offs - - (30) (30)
Reclassifications - - 1,545 1,545
31-Dec-2017 4,140 600 173,688 178,428
Amortisation
01-Jan-2017 - 205 13,817 14,022
Impairments - - 308 308
Charge for the year - 60 15,491 15,551
Disposals - - (6) (6)
Reclassifications - - 322 322
31-Dec-2017 - 265 29,932 30,197
Net book value 4,140 335 143,756 148,231
Goodwill Customer contracts Software
Total
Cost or valuation £'000 £'000 £'000 £'000
01-Jan-2016 4,140 600 56,745 61,485
Additions - - 45,053 45,053
Disposals - - (1) (1)
31-Dec-2016 4,140 600 101,797 106,537
Amortisation
01-Jan-2016 - 145 7,097 7,242
Impairments - - 75 75
Charge for the year - 60 6,631 6,691
Write offs - - 14 14
31-Dec-2016 - 205 13,817 14,022
Net book value 4,140 395 87,980 92,515
9. Share capital
We only have a single class of shares. As at 31 December 2017 we had 88.5
million ordinary shares of 0.0001p (31 December 2016: 80.3 million) authorised
and in issue.
In July 2017, we issued 8.02 million ordinary shares of 0.0001p each, for
consideration of £278 million. Related transaction costs of £2.9 million have
been deducted from equity during the period.
Additionally, during the year we issued 0.2 million ordinary shares which
relate to the exercise of previously awarded share options. These options
contributed £892,000 to share premium.
31-Dec-2017 31-Dec-2016
£'000 £'000
Called up ordinary share capital, issued and fully paid
At beginning of year - -
Issued - -
At end of year - -
31-Dec-2017 31-Dec-2016
£'000 £'000
Share premium account
At beginning of year 1,027,645 629,304
Issued 278,785 403,572
Costs of share issued (2,927) (5,231)
At end of year 1,303,503 1,027,645
10. Earnings per share
Basic earnings/(loss) per share is calculated by dividing the earnings/(loss)
attributable to ordinary equity holders of Metro Bank by the weighted average
number of ordinary shares in issue during the period.
2017 2016
£'000 £'000
Earnings/(loss) attributable to ordinary equity holders of Metro Bank 10,789 (16,753)
Weighted average number of ordinary shares in issue - basic ('000) 84,412 76,791
Basic earnings/(loss) per share (pence) 12.8 (22.0)
Diluted earnings/(loss) per share has been calculated based on the same
earnings 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 are treated as
dilutive when their conversion to ordinary shares results in a reduction in
earnings 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. At 31 December
2017 all outstanding share options were considered dilutive.
2017 2016
£'000 £'000
Earnings/(loss) attributable to ordinary equity holders of Metro Bank 10,789 (16,753)
Weighted average number of ordinary shares in issue -diluted ('000) 85,927 76,791
Diluted earnings/(loss) per share (pence) 12.6 (22.0)
There have been no transactions involving ordinary shares or potential
ordinary shares between the reporting date and the date of the completion of
these financial statements which would require the restatement of EPS.
11. 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 they are
short-term in nature or re-price frequently, 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). This level includes equity
investments and debt instruments with significant unobservable components.
With
Quoted Using significant
market observable unobservable
Carrying price inputs inputs Total
Value Level 1 Level 2 Level 3 Fair Value
31-Dec-2017 £'000 £'000 £'000 £'000 £'000
Assets
Cash and balances with the Bank of England 2,111,630 - - 2,111,630 2,111,630
Loans and advances to banks 100,388 - - 100,388 100,388
Loan and advances to customers 9,620,326 - - 10,084,203 10,084,203
Investment securities 3,914,506 922,006 3,029,048 - 3,951,054
Liabilities
Deposits from customers 11,668,738 - - 11,650,419 11,650,419
Deposits from central banks 3,320,900 - - 3,320,900 3,320,900
Repurchase agreements 121,558 - - 121,558 121,558
31-Dec-2016
Assets
Cash and balances with the Bank of England 434,612 - - 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.
11. Fair value of financial instruments (continued)
(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.
12. Related party transactions
Key management personnel
Our key management personnel, and persons connected with them, are considered
to be related parties for disclosure purposes. Key management personnel are
defined as those persons having authority and responsibility for planning,
directing and controlling the activities of the Group. The Directors and
members of the Executive Leadership Team are considered to be the key
management personnel for disclosure purposes.
Key management compensation
Total compensation cost for key management personnel for the year by category
of benefit was as follows:
2017 2016
£'000 £'000
Short-term employee benefits 4,817 3,891
Share based payment cost 2,388 4,108
Total compensation for key management personnel 7,205 7,999
Short-term employee benefits include salary, medical insurance, bonuses and
cash allowances paid to key management personnel. The share-based payment cost
includes the IFRS 2 charge for the year associated with listing awards awarded
in previous years. The cost includes the in-year IFRS 2 costs for Listing
Share Awards granted to selected key management personnel in recognition of
their significant contribution to the successful private placement and
admission of Metro Bank to the London Stock Exchange.
12. Related party transactions (continued)
Banking transactions with key management
The Group provides banking services to Directors and other key management
personnel and persons connected to them. Loan transactions during the year and
the balances outstanding at 31 December were as follows:
2017 2016
Loans payable to the bank £'000 £'000
Loans outstanding at 1 January 3,191 2,529
Loans relating to former key management personnel - (529)
Loans relating to persons and companies no longer considered related parties (321) -
Loans outstanding at 1 January for current key management personnel 2,870 2,000
Loans issued during the year 349 1,250
Loan
- More to follow, for following part double click ID:nRSU4561FcRecent news on Metro Bank Holdings
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AnnouncementREG-Metro Bank Holdings PLC Director/PDMR Shareholding
AnnouncementREG-Metro Bank Holdings PLC Director/PDMR Shareholding
AnnouncementREG-Metro Bank Holdings PLC Director/PDMR Shareholding
AnnouncementREG-Metro Bank Holdings PLC Metro Bank Holdings PLC: Results for the year ended 31 December 2025
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