Metro Bank Holdings PLC (MTRO)
Metro Bank Holdings PLC: Results for the year ended 31 December 2025
04-March-2026 / 07:00 GMT/BST
Metro Bank Holdings PLC
Unaudited full year results
Trading update 2025
4 March 2026
Metro Bank Holdings PLC (LSE: MTRO LN) (“Metro Bank”)
Legal Entity Identifier: 984500CDDEAD6C2EDQ64
Results for the year ended 31 December 2025
A year of strong growth and operational delivery
Underlying profit before tax of £98 million,the highest in Metro Bank’s history
22% increase in Net Interest Income driving 16% increase in underlying Revenue
Generated highest NII and Revenuein history of Metro Bank
Continued NIM expansion, with exit NIM at December 2025 of 3.17%,in line with guidance
67% record growth in new corporate, commercial and SME lendingas Metro Bank wins market share
Beat cost guidance(7% reduction versus 4-5% guidance), anddelivered on all other guidance
Return on Tangible Equity1of 6.4%continues to increase in line with guidance
Opened new stores in Chester, Salford and Gateshead,new leases signed in Newcastle and Leeds
Reclassified as a Transfer firm under MREL regime,releasing significant capacity for growth
2028 guidance to deliver greater than 18% RoTE,almost trebling 2025 RoTE, firmly positioning Metro Bank as one of the UK market leaders
Daniel Frumkin, Chief Executive Officer at Metro Bank, said:
“2025 was a year of strong growth and successful delivery for Metro Bank. Through focused execution of our strategy and pivot to higher margin business, we have boosted underlying profits to £98 million, the highest in our 15-year history, whilst reducing operating costs ahead of target. Metro Bank expects to more than double returns in 6 months and nearly treble them in 18 months through the ongoing execution of our clear strategy.
Metro Bank stands out for our focus on relationship banking, our full service-offer to SMEs and store presence. We are capturing market share in our target segments and have a deep pipeline of attractive lending opportunities. We lent a record £2 billion to companies up and down the UK, supporting growth and creating jobs.
Looking forward, we have a clear strategy and resilient business model that will support profitable growth against a changing market backdrop. Our revised guidance shows we expect to more than double RoTE throughout the fourth quarter of this year and nearly treble it to greater than 18% for 2028. This will see us delivering one of the highest returns of any UK High Street bank.”
Statutory profit after tax attributable to shareholders as a percentage of average tangible equity (equity excluding other equity instruments, intangible assets and deferred tax assets)
Key Financials
| £ in millions | FY
2025 | FY
2024 | Change from
FY 2024 | H1
2025 | Change from
H1 2025 | | | | | | | | Assets | £16,475 | £17,582 | (6%) | £16,428 | 0% | | Loans | £8,823 | £9,013 | (2%) | £8,715 | 1% | | Deposits | £13,445 | £14,458 | (7%) | £13,363 | 1% | | Loan to deposit ratio | 66% | 62% | 4pp | 65% | 1pp | | | | | | | | CET1 capital ratio | 12.5% | 12.5% | 0bps | 12.8% | (30bps) | | Total capital ratio (TCR) | 18.4% | 14.9% | 350bps | 18.9% | (50bps) | | Total capital plus MREL ratio | 26.1% | 23.0% | 310bps | 27.0% | (90bps) | | Liquidity coverage ratio | 306% | 337% | (31pp) | 315% | (9pp) |
| £ in millions | FY
2025 | FY
2024 | Change from
FY 2024 | H2
2025 | H1
2025 | Change from
H1 2025 | | | | | | | | | Total underlying revenue2 | £585.1 | £503.5 | 16% | £299.0 | £286.1 | 5% | | Underlying profit/(loss) before tax3 | £98.1 | (£14.0) | >100% | £53.0 | £45.1 | 17% | | Statutory profit/(loss) before tax | £87.2 | (£212.1) | >100% | £44.1 | £43.1 | 2% | | Statutory profit after tax4 | £69.7 | £42.5 | 64% | £39.3 | £30.4 | 29% | | Net interest margin | 2.98% | 1.91% | 107bps | 3.10% | 2.87% | 23bps | | Lending yield | 5.69% | 5.33% | 36bps | 5.71% | 5.67% | 4bps | | Cost of deposits | 1.06% | 1.95% | (89bps) | 0.96% | 1.16% | (20bps) | | Cost of risk | 0.16% | 0.06% | 10bps | 0.18% | 0.14% | 4bps | | Earnings per share | 7.8p | 6.3p | 1.5p | 3.3p | 4.5p | (1.2p) | | Book value per share | £2.20 | £1.76 | £0.44 | £2.20 | £2.17 | £0.03 | | Tangible net asset value per share | £1.63 | £1.57 | £0.06 | £1.63 | £1.61 | £0.02 |
Underlying revenue excludes grant income recognised relating to the Capability & Innovation fund and net profit/(loss) on portfolio sales
Underlying profit/(loss) before tax is an alternative performance measure and excludes impairment and write-off of property, plant & equipment (PPE) and intangible assets, transformation costs, remediation costs, net profit/(loss) on portfolio sales and costs associated with capital raise
2024 profit after tax reflects recognition of Deferred Tax Asset in the period
Investor presentation
A presentation for investors and analysts will be held at 9AM (UK time) on 4 March 2026. The presentation will be webcast on:
https://webcast.openbriefing.com/metrobank-fy25/
For those wishing to dial-in:
From the UK dial: +44 808 189 0158
From the US dial: +1 855 979 6654
Access code: 284804
Other global dial-in numbers:https://www.netroadshow.com/events/global-numbers?confId=67110
Financial performance for the year ended 31 December 2025
Deposits
| £ in millions | FY
2025 | FY
2024 | Change from
FY 2024 | H1
2025 | Change from
H1 2025 | | | | | | | | Demand: current accounts | £5,862 | £5,791 | 1% | £5,682 | 3% | | Demand: savings accounts | £6,901 | £7,534 | (8%) | £6,991 | (1%) | | Fixed term: savings accounts | £682 | £1,133 | (40%) | £690 | (1%) | | Deposits from customers | £13,445 | £14,458 | (7%) | £13,363 | 1% | | | | | | | | Deposits from customers includes: | | Retail customers (excluding retail partnerships) | £4,765 | £5,968 | (20%) | £5,000 | (5%) | | SMEs5 | £4,734 | £4,442 | 7% | £4,492 | 5% | | £9,499 | £10,410 | (9%) | £9,492 | 0% | | Retail partnerships | £1,832 | £1,785 | 3% | £1,913 | (4%) | | Commercial customers (excluding SMEs5) | £2,114 | £2,263 | (7%) | £1,958 | 8% | | £3,946 | £4,048 | (3%) | £3,871 | 2% | | SME defined as enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding €50 million, and/or an annual balance sheet total not exceeding €43 million and have aggregate deposits less than €1 million. | Underlying momentum in the franchise remains strong,with over 32,000 new business current accounts and over 77,000 new personal current accounts opened in the year.
Excess liquidity has been successfully managed down,with high-cost fixed term deposits now comprising just 5% of the book.Total customer deposits ended FY 2025 at £13.4 billion(FY 2024: £14.5 billion). The core customer deposit base continues to be predominantly Retail, with growth in SMEs in line with the Group’s strategy. | | Cost of deposits for FY 2025 was 1.06% (FY 2024: 1.95%), with an exit cost of deposits at December 2025 of 0.94% - the lowest of any UK High Street bank. | | Stores remain a key element to the Group’s service offeringand strategy, as an enabler of our relationship-based approach.Metro Bank opened three new stores in 2025, in line with our plan - Chester, Salford and Gateshead, with new leases signed in Newcastle and Leeds. All locations were selected to support our growing corporate, commercial and SME banking offer and local communities. |
Loans
| £ in millions | FY
2025 | FY
2024 | Change from
FY 2024 | H1
2025 | Change from
H1 2025 | | | | | | | | Gross loans and advances to customers | £8,993 | £9,204 | (2%) | £8,882 | 1% | | Less: allowance for impairment | (£170) | (£191) | (11%) | (£167) | 2% | | Net loans and advances to customers | £8,823 | £9,013 | (2%) | £8,715 | 1% | | | | | | | | Gross loans and advances to customers consists of: | | | | | | | Commercial lending6 | £3,570 | £2,661 | 34% | £3,083 | 16% | | Specialist Mortgages lending | £1,657 | £700 | 137% | £1,247 | 33% | | Target segments | £5,227 | £3,361 | 56% | £4,330 | 21% | | Government-backed lending7 | £369 | £653 | (43%) | £514 | (28%) | | Consumer lending | £114 | £745 | (85%) | £133 | (14%) | | Prime Mortgages lending | £3,283 | £4,445 | (26%) | £3,905 | (16%) | | Total run-off books | £3,766 | £5,843 | (36%) | £4,552 | (17%) | Includes corporate, commercial, SME and CLBILS.
BBLS, CBILS and RLS. | Balances in the Group’s target lending segments of corporate, commercial and SME, and specialist mortgages grew by 56% year-on-year, to £5.2 billion.Togetherwith legacy books in run-off, which at FY 2025 totalled £3.8 billion, total gross loans at FY 2025 were £9.0 billion.Total net loans at FY 2025 were £8.8 billion.
Loan to deposit ratio at FY 2025 was 66%,providing capacity for growth.
Commercial lending (excluding BBLS, CBILS and RLS) increased by 34% at FY 2025 to £3.6 billion(FY 2024: £2.7 billion)following £2 billion of new gross lending in FY 2025 - a Metro Bank record.Growth in new corporate, commercial and SME lending continues to be offset by attrition, particularly in commercial real estate and portfolio buy-to-let. The DTV of the portfolio at FY 2025 was 67% (FY 2024: 56%) and the portfolio has a coverage ratio of 2.07% (FY 2024: 1.98%).
Specialist Mortgages increased by 137% year-on-year to £1.7 billion (FY 2024: £0.7 billion). Together with the Prime Mortgage book in run-off, total retail mortgages were £4.9 billion at FY 2025andremain the largest component of the lending book at 55% (FY 2024: 56%). The Debt to Value (DTV) of the portfolio at FY 2025 was 60% (FY 2024: 59%). Metro Bank’s operating model is tailored to more complex underwriting which enables the Group to meet the needs of more customers and scale underserved markets whilst offering improved risk-adjusted returns.
Costof risk for FY 2025 remained low, at 0.16% (FY 2024: 0.06%).The credit quality of new lending continues to be strong and the Group retains its prudent approach to provisioning.
Overall arrears rates have improved and non-performing loans have reduced. Arrears levels have decreased to 4.7% at FY 2025 (FY 2024: 5.6%) and non-performing loans have reduced to 5.14% at FY 2025 (FY 2024: 5.48%).
The loan portfolio remains appropriately provisioned.The ECL provision at FY 2025 was £170 million with a coverage ratio of 1.89%. |
Profit and Loss Account
Underlying profit before tax of £98 million for FY 2025, the highest in Metro Bank’s history, £112 million higher than FY 2024,driven by continued improvements in net interest income and further cost reductions (FY 2024: underlying loss of £14 million).
Net interest margin for FY 2025 was 2.98%(FY 2024:1.91%), with an exit net interest margin of 3.17%, in line with guidance(FY 2024 Exit NIM: 2.65%).Structural improvements to net interest margin reflect lower cost of deposits and increased asset yields.
Underlying net interest income increased by 22% year-on-year to £460 million(FY 2024: £378 million),reflecting the continued transition towards higher yielding assets and a reduction in cost of deposits.
Underlying net fee and other income remained flat year-on-year at £125 million(FY 2024: £126 million).
Underlying operating costs reduced 7% year-on-year, to £473 million- ahead of guidance(FY 2024: £510 million).
Expected credit loss expense was £14 million for FY 2025(FY 2024: £7 million)reflecting a continued benign credit environment.
Statutory profit after tax for FY 2025was £69.7 million(FY 2024: £42.5 million, following £255 million Deferred Tax Asset recognition). |
Capital, Funding and Liquidity
| | At 31 December 2025 | From 1 January 2026 | | Position
FY 20258 | Minimum
requirement
including buffers9 | Minimum
requirement
excluding buffers9 | Minimum
requirement
including buffers9 | Minimum
requirement
excluding buffers9 | | Common Equity Tier 1 (CET1) | 12.5% | 9.7% | 5.2% | 9.7% | 5.2% | | Tier 1 | 16.1% | 11.4% | 6.9% | 11.4% | 6.9% | | Total Capital | 18.4% | 13.7% | 9.2% | 13.7% | 9.2% | | Total Capital plus MREL | 26.1% | 22.9% | 18.4% | 13.7% | 9.2% | | Risk Weighted Assets (£ million) | 6,711 | - | - | - | - | Capital figures as at 31 December 2025 are presented on a proforma basis, including our profit for the year.The profit will only be eligible to be included in our capital resources following the completion of our audit and publication of our Annual Report and Accounts
CRD IV buffers | Capital position is well optimised for growthfollowing the £250 million AT1 securities issuance and completion of £584 million unsecured personal loan portfolio sale in 2025.
Effective 1 January 2026, the Group was reclassified as a Transfer firm under the MREL regime, with MREL set equal to minimum capital requirements.The Group continues to review its liability structure on an economic basis in the context of its ongoing regulatory and liquidity needs.
Metro Bank’s Total Capital plus MREL ratio at FY 2025 was 26.1%, a 310bps improvement year-on-year(FY 2024: 23.0%), and 320bps above regulatory minimum requirements as at FY 2025 (including buffers).
The Bank remains focused on optimising risk-adjusted returns on regulatory capital.
Total RWAs increased year-on-year to £6.7 billion(FY 2024: £6.4 billion),reflecting continued asset rotation into higher-density corporate, commercial and SME lending.RWA density at FY 2025 was 41%(FY 2024: 37%).
Strong liquidity and funding position maintainedwith all customer loans fully funded by customer deposits.Loan to deposit ratio at FY 2025 was 66%.
Liquidity Coverage Ratio (LCR)at FY 2025 was 306%(FY 2024: 337%), with cash balances in excess of £2 billion.
Net Stable Funding Ratio (NSFR)at FY 2025 was 161%(FY 2024: 169%).
The Treasury portfolio of £6.3 billion includes £4.2 billion of investment securities, of which75% are rated AAA and 25% are rated AA. Of the total investment securities, 95% is held at amortised cost and 5% is held at fair value through other comprehensive income.
Over thenext 2 years approximately £1.5 billion of fixed rate treasury assets will matureat an average blended yield of just over 1%. These will be replaced by asset with yields in line with or greater than the prevailing base rate. |
Guidance
| | | | | RoTE | RoTE to be 13% or greater in Q4 2026, 15% or greater for 2027, and 18% or greater for 2028 | | NIM | Exit NIMs to be between 3.40-4.00% for 2026 and 3.75%-4.50% for 2027 | | Costs | Cost income ratio to be between 75-70% for 2026, 65-65% for 2027, and 55-50% for 2028
Costs for 2026 flat versus 2025 | | | | | |
Metro Bank Holdings PLC
Summary Balance Sheet and Profit & Loss Account
(Unaudited)
Balance Sheet
£ in millions | YoY
change | FY
2025 | H1
2025 | FY
2024 | | | | | | | Assets | | | | | | Loans and advances to customers | (2%) | £8,823 | £8,715 | £9,013 | | Treasury assets10 | (13%) | £6,345 | £6,386 | £7,301 | | Other assets11 | 3% | £1,307 | £1,327 | £1,268 | | Total assets | (6%) | £16,475 | £16,428 | £17,582 | | | | | | | Liabilities | | | | | | Deposits from customers | (7%) | £13,445 | £13,363 | £14,458 | | Deposits from central banks | - | £400 | £400 | £400 | | Debt securities | 1% | £684 | £685 | £675 | | Other liabilities | (47%) | £462 | £522 | £866 | | Total liabilities | (9%) | £14,991 | £14,970 | £16,399 | | Total equity | 25% | £1,484 | £1,458 | £1,183 | | Total equity and liabilities | (6%) | £16,475 | £16,428 | £17,582 |
Comprises investment securities and cash & balances with the Bank of England.
Comprises property, plant & equipment, intangible assets and other assets.
| | | | Profit & Loss Account
£ in millions | YoY
change | FY
2025 | FY
2024 | | | | | | | | | | Underlying net interest income | 22% | £460.3 | £377.9 | | Underlying net fee and other income | (1%) | £124.8 | £125.6 | | Underlying net gain on sale of assets | | £0.0 | £0.0 | | Total underlying revenue | 16% | £585.1 | £503.5 | | | | | | Underlying operating costs | (7%) | (£472.7) | (£510.4) | | Expected credit loss expense | 101% | (£14.3) | (£7.1) | | | | | | Underlying profit/(loss) before tax | >100% | £98.1 | (£14.0) | | | | | | Impairment and write-off of property plant & equipment and intangible assets | | (£0.7) | (£44.0) | | Transformation costs | | (£14.4) | (£31.1) | | Remediation costs | | (£1.2) | (£21.3) | | Portfolio sales | | £5.4 | (£101.6) | | Cost associated with capital raise | | - | (£0.1) | | Statutory profit/(loss) before tax | >100% | £87.2 | (£212.1) | | | | | | Statutory taxation | >(100)% | (£17.5) | £254.6 | | | | | | Statutory profit after tax | 64% | £69.7 | £42.5 | | | | | | | | | | | | | | | |
| Key metrics | FY
2025 | FY
2024 | | | | | Earnings per share | 7.8p | 6.3p | | Net interest margin (NIM) | 2.98% | 1.91% | | Lending yield | 5.69% | 5.33% | | Cost of deposits | 1.06% | 1.95% | | Cost of risk | 0.16% | 0.06% | | Arrears rate | 4.7% | 5.6% | | Underlying cost: income ratio | 81% | 101% | | Book value per share | £2.20 | £1.76 | | Tangible net asset value per share | £1.63 | £1.57 | | Risk weighted assets (RWAs) | £6,711 | £6,442 | | Risk weight density (RWAs / total assets) | 41% | 37% | | Loan to deposit ratio | 66% | 62% |
| | Half year ended | | | Profit & Loss Account | HoH
change | 31 Dec
2025 | 30 Jun
2025 | 31 Dec
2024 | | | £'million | £'million | £'million | | | | | | | Underlying net interest income | 7% | £237.4 | £222.9 | £206.0 | | Underlying net fee and other income | (3%) | £61.4 | £63.4 | £63.4 | | Underlying net gains on sale of assets | (183%) | £0.2 | (£0.2) | £0.1 | | Total underlying revenue | 5% | £299.0 | £286.1 | £269.5 | | | | | | | Underlying operating costs | 1% | (£238.0) | (£234.7) | (£255.8) | | Expected credit loss expense | 22% | (£8.0) | (£6.3) | (£0.9) | | | | | | | Underlying profit before tax | 18% | £53.0 | £45.1 | £12.8 | | | | | | | Impairment and write-off of property plant & equipment and intangible assets | | (£0.6) | (£0.1) | (£43.7) | | Transformation costs | | (£6.7) | (£7.8) | (£26.6) | | Remediation costs | | (£1.6) | £0.4 | (£19.5) | | Portfolio sales | | - | £5.5 | (£101.6) | | Statutory profit/(loss) before tax | 2% | £44.1 | £43.1 | (£178.6) | | | | | | | Statutory taxation | (62%) | (£4.8) | (£12.7) | £254.2 | | | | | | | Statutory profit after tax | 29% | £39.3 | £30.4 | £75.6 | | | | | | | |
| Key metrics | H2
2025 | H1
2025 | H2
2024 | | | | | | Earnings per share | 3.3p | 4.5p | 1.9p | | Net interest margin (NIM) | 3.10% | 2.87% | 2.22% | | Lending yield | 5.71% | 5.67% | 5.48% | | Cost of deposits | 0.96% | 1.16% | 1.72% | | Cost of risk | 0.18% | 0.14% | 0.01% | | Arrears rate | 4.7% | 4.9% | 5.6% | | Underlying cost: income ratio | 80% | 82% | 95% | | Book value per share | £2.20 | £2.17 | £1.76 | | Tangible net asset value per share | £1.63 | £1.61 | £1.57 | | Risk weighted assets (RWAs) | £6,711m | £6,437m | £6,442m | | Risk weight density (RWAs / total assets) | 41% | 39% | 37% | | Loan to deposit ratio | 66% | 65% | 62% |
Enquiries
For more information, please contact:
Metro Bank PLC Investor Relations
Daniel Ainscough/Stella Gavaletakis
+44 (0) 20 3402 8900
IR@metrobank.plc.uk
Metro Bank PLC Media Relations
Victoria Gregory
+44 (0) 7773 244608
pressoffice@metrobank.plc.uk
FGS Global
Mike Turner
+44 (0) 7766 360900
Metrobank-lon@fgsglobal.com
ENDS
About Metro Bank
Metro Bank provides corporate, commercial and SME banking and specialist mortgage lending, alongside retail and private banking services. Metro Bank offers relationship banking through a network of 78 stores in the UK, telephone banking from UK-based contact centres and digital banking via mobile app and online.
Metro Bank Holdings PLC (registered in England and Wales with company number 14387040, registered office: One Southampton Row, London, WC1B 5HA) is the listed entity and holding company of the Metro Bank group.
Metro Bank PLC (registered in England and Wales with company number 6419578, registered office: One Southampton Row, London, WC1B 5HA) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. ‘Metrobank’ is a registered trademark of Metro Bank PLC.Eligible deposits are protected by the Financial Services Compensation Scheme. For further information about the Scheme, refer towww.fscs.org.uk.
Metro Bank is an independent UK bank – it is not affiliated with any other bank or organisation. Please refer to Metro Bank using the full name.
Metro Bank Holdings PLC
Preliminary Announcement
(Unaudited)
For the year ended 31 December 2025
Chief Executive Officer’s statement
2025 has been a year of strong growth with successful operational delivery, culminating in an underlying profit for the year of £98 million, the highest in Metro Bank’s history. We have seen a 22% increase in Net Interest income driving 16% in Revenue increase. We have beat cost guidance (7% reductions versus 4-5% guidance) and delivered on all our other guidance.
Our local, relationship-led service model is a unique structural advantage which positions the bank to deliver best-in-class risk adjusted returns. As we celebrated our 15-year anniversary in 2025, our unwavering commitment to relationship banking is what sets us apart from other banks; deepening connections with customers, communities and increasing market share. We continue to grow our store network to continue to deliver for clients in person, while also improving customer experience through investing in AI and digital technology.
We continue our strategic shift to corporate, commercial, and SME lending, and specialist mortgages at pace. We delivered record growth in gross new lending in corporate, commercial and SME of £2 billion in 2025, almost twice the lending originated in 2024. Alongside this, we built a credit approved pipeline for corporate, commercial and SME of £800 million.
Alongside this record growth, we have maintained our focus on costs, delivering a 7% reduction year-on-year, ahead of guidance. Our strategic partnership with Infosys continues to enhance digital capabilities, improve automation, and embed further AI capabilities, allowing the bank to scale in an efficient manner.
As we focus on optimising the balance sheet and increasing returns, we have successfully managed down excess liquidity, particularly expensive fixed-term deposits (FTD), resulting in a cost of deposits that is now the lowest of any UK High Street bank. NIBLs remain double the market average and FTD/ cash ISAs comprise only one fifth of the market average, providing an enduring strategic advantage. We are also seeing increased deposit inflows from SME clients, deepening these valued relationships beyond the loan book.
We have optimised our capital position providing capacity for further growth following the £250 million Additional Tier 1 (AT1) securities issuance and completion of the £584 million unsecured personal loan portfolio sale in the first half of 2025. Both transactions were key milestones in our strategy to reposition the balance sheet, actively manage asset rotation and enhance risk-adjusted returns on capital.
Effective 1 January 2026, the Group was reclassified as a Transfer firm under the MREL regime, with MREL requirements set equal to minimum capital requirements providing further capacity for growth in corporate, commercial and SME lending, and specialist mortgages.
Momentum in the underlying franchise remains strong, giving us confidence to enhance RoTE guidance for 2026 as well as introducing new RoTE targets for 2028:
RoTE to be greater than 13% by Q4 2026, greater than 15% for 2027 and greater than 18% for 2028, one of the highest of any UK High Street bank.
Continued NIM expansion driven by asset rotation and management of cost of deposits, with 2026 exit run-rate expected to be between 3.40%-4.00% and 3.75%-4.50% in 2027, respectively.
Continued cost discipline and control, with cost to income ratios for 2026, 2027 and 2028 to be between 75%-70%, 65%-60%, and 55%-50%, respectively.
Progress on strategic priorities
Revenue: Driving record new lending
We delivered record new lending growth of £2 billion in 2025, across our corporate, commercial and SME portfolios. This strong performance is further underscored by a credit approved pipeline of £800 million to date. Combined, this new lending and credit approved pipeline, are equal to all new originations in the last two years. Our relationship managers organically generated 88% of new Corporate lending, helping to maintain our strong asset quality. Portfolio remains highly collateralised and prudently provisioned. We remain focused on pricing discipline ensuring we maintained an average margin in excess of 350 bps over base rate, driving year-on-year improvements in yield.
There has been strong progress in specialist mortgage originations, with Metro Bank firmly established as a specialist mortgage provider of choice. We continue to enhance our specialist proposition and launched additional products (House in Multiple Occupancy “HMOs”, Multi-Unit Freehold Blocks “MUFB” and affordability enhancements) in 2025.
We successfully managed down excess liquidity throughout 2025, in particular expensive fixed-term deposits, significantly lowering our cost of funding. An exit cost of deposits at December 2025 of 0.94% means Metro Bank has the lowest cost of deposits of any UK High Street bank. NIBLs remain double the market average, providing a lasting strategic advantage.
The combined impact of increased lending yields and a lower cost of deposits has resulted in an exit NIM of 3.17% in December 2025, in line with guidance. Overall revenue increased 16% year-on-year, despite 125 bps year-on-year reduction in Bank of England base rate and a meaningfully smaller balance sheet following the c.£584 million asset sale in the period. Strong revenue performance gives us confidence in our guidance.
Cost: Improving efficiency
We continue to take a disciplined approach to costs and have reduced underlying costs by 7% in the year, ahead of guidance.Our strategic partnership with Infosys continues to enhance digital capabilities, improve automation, and embed further AI capabilities, allowing the bank to scale in an efficient manner. Operating costs are already below the level needed to meet 2027 guidance and costs in 2026 will remain flat compared to 2025.
Infrastructure: Building the future
Over the year, we have continued to invest in platforms and capabilities to support growth momentum and deliver even better customer experiences. Our strategic partnership with Infosys continues to improve our digital capabilities. It includes the provision of actionable data analytics, automated processes, and enhanced digital platforms. Significant upgrades to financial crime and fraud infrastructure have helped protect our customers, and our upgraded call centre has improved customer experience while also driving efficiency.
Stores remain a key element to the Group’s service offering and strategy, as an enabler of our relationship-based approach. Metro Bank opened three new stores in 2025, in line with our plan - Chester, Gateshead and Salford, with new leases signed in Newcastle and Leeds. Our Gateshead store was our first in the North East. All locations were selected to support our growing corporate, commercial and SME banking offer and local communities. All these improvements ensure we continue to build capability for the future.
Balance sheet optimisation: Maximising opportunities
We have optimised our capital position for growth following the inaugural £250 million AT1 securities issuance, followed by the completion of £584 million unsecured personal loan portfolio sale in the first half of the year. Both transactions were in line with our strategy to reposition and strengthen the balance sheet, creating additional capacity for growth to enable the bank to continue its rotation towards higher yielding assets.
Effective 1 January 2026, the Group was reclassified as a Transfer firm under the MREL regime, with MREL requirements set equal to minimum capital requirements. The Group continues to review its liability structure on an economic basis in the context of its ongoing regulatory and liquidity needs.
Metro Bank’s MREL ratio at FY 2025 was 26.1%, a 310bps improvement year-on-year (FY 2024: 23.0%), and 320bps above regulatory minimum requirements (including buffers). This reflects our ongoing focus on capital management while optimising risk-adjusted returns on regulatory capital.
Excess liquidity has been successfully managed down, with high-cost fixed term deposits now comprising just 5% of the book. Total customer deposits ended FY 2025 at £13.4 billion (FY 2024: £14.5 billion), with the core customer deposit base continuing to be predominantly Retail, with growth in SMEs in line with the Group’s strategy.
Cost of deposits for FY 2025 was 1.06% (FY 2024: 1.95%), with an exit cost of deposits at December 2025 of 0.94%- the lowest of any UK High Street bank. All the actions taken to optimise the balance sheet have created capacity for future growth momentum.
Communications:Empowering our colleagues and communities
In our 15th year, Metro Bank’s inclusive culture remains central to our value proposition and plays a fundamental role in driving colleague engagement. After a period of business transformation, our annual Voice of the Colleague survey saw a significant 7-point uplift in satisfaction, reflecting positive engagement and confidence in the direction of the bank. We maintained a strong focus on colleague development and mobility, with almost 300 colleagues promoted during the year.
Our strategic growth in Corporate, Commercial and SME lending saw us appoint new regional heads of Corporate Banking for the Midlands, Wales and the South West as well as new Commercial Lending Directors for the North West, Wales and the South West, positioning us for the next stage of growth across the breadth of the UK.
In January 2025, we launched new brand positioning highlighting our relationship banking specialism, increasing awareness and putting in-person experience at the forefront of our customer service. This was brought to life further by our regional growth and expansion with the opening of new stores in Gateshead, Salford Quays and Chester. Our partnership with Covecta, an AI platform for financial services, was deployed across our corporate and commercial credit businesses, freeing up more time for our experts to engage with customers.
In support of our ongoing efforts to prevent fraud, we launched the Metro Bank Scam Checker in 2025, becoming the first UK bank to partner with award winning AI firm Ask Silver – allowing customers to spot scams more easily. We also partnered with the charity Victim Support to provide an independent support service for customers who have been victims of fraud.
Our ongoing commitment to community impact continued through our partnership with the England and Wales Cricket Board and the Metro Bank Girls in Cricket Fund. By removing barriers to participation and promoting the visibility of women and girls in cricket through our Seeing is Believing campaign, the number of girls’ teams has increased by 32%.
Outlook: Operational execution and strong momentum allow for ongoing delivery of our strategy
Metro Bank is well placed to continue its strategic delivery and growth trajectory in the year ahead and over the medium term. We have a clear strategy and resilient business model that will support profitable growth in line with our plans against a changing market backdrop. Metro expects to more than double returns in 6 months and nearly treble them in 18 months through the ongoing execution of our clear strategy.
Finance review
Summary of the Year
2025 was another strong year as the Bank executed on its strategy and delivered across all aspects of market guidance.
We recognised an underlying profit before tax of £98.1 million, the highest in the Bank’s history. We reduced underlying operating costs by a further 7%, actively managed down liquidity to reduce cost of deposits, and continued to strategically rotate assets to higher-yielding corporate, commercial and SME lending, and specialist mortgages.
We recorded a statutory profit before tax of £87.2 million, £299.3 million more than the £212.1 million statutory loss before tax in the prior year, driven by one-off transactions in 2024 that provided the foundation for growth in 2025.
Income Statement
| 2025
£m | 2024
£m | Change
% | | Underlying net interest income | 460.3 | 377.9 | 22% | | Underlying net non-interest income | 124.8 | 125.6 | (1%) | | Total underlying revenue | 585.1 | 503.5 | 16% | | Underlying operating costs | (472.7) | (510.4) | (7%) | | Expected credit loss expense | (14.3) | (7.1) | 101% | | Underlying profit/(loss) before tax | 98.1 | (14.0) | – | | Non-underlying items | (10.9) | (198.2) | (95%) | | Statutory profit/(loss) before tax | 87.2 | (212.1) | – |
Net interest income
Net interest income increased by 22% to £460.3 million despite a lower average base rate and a smaller balance sheet following the £584 million unsecured personal loan sale during the year, reflecting the continued transition towards higher-yielding assets and a reduction in cost of deposits.
Net interest margin for the year was 2.98%, up 107bps, with an exit net interest margin of 3.17%, in line with guidance. Structural improvements to net interest margin reflect increased asset yields and lower cost of deposits. We ended the year with cost of deposits at December 2025 of 0.94%, the lowest of any UK high street bank.
Operating expenses
| 2025
% | 2024
% | | Underlying cost:income ratio | 81% | 101% | | Statutory cost:income ratio | 83% | 151% |
Underlying operating costs reduced 7% year-on-year, to £473 million. We continue to take a disciplined approach to costs, allowing the Bank to scale in an efficient manner. We are focused on enhancing our digital capabilities, improving automation and embedding further AI capabilities across the Bank to drive cost efficiencies. Combined with growth in underlying income, our underlying cost to income ratio reduced to 81%. On a statutory basis, cost to income ratio reduced from 151% in 2024 to 83% in 2025, reflecting convergence between our underlying and statutory results.
Non-underlying items
| 2025
£m | 2024
£m | Change
% | | Impairment and write-off of property, plant, equipment and intangible assets | (0.7) | (44.0) | (98%) | | Transformation costs | (14.4) | (31.1) | (54%) | | Remediation costs | (1.2) | (21.3) | (94%) | | Portfolio sales | 5.4 | (101.6) | (105%) | | Cost associated with capital raise | - | (0.1) | (100%) | | Non-underlying items | (10.9) | (198.1) | (94%) |
Included in our statutory results are £10.9 million of non-underlying items (2024: £198.1 million), reflecting a year of execution and focus on our target market. These include £5.4 million net proceeds from the £584 million unsecured personal loan portfolio in H1 2025 and £14.4 million of transformation costs incurred following localised restructuring activities.
Expected credit losses
| 31 December 2025 | ECL Allowance | Coverage ratio | Non-performing loan ratio | | £m | % | % | | Retail mortgages | 16 | 0.32% | 4.45% | | Consumer | 67 | 58.77% | 64.91% | | Corporate and commercial | 87 | 2.21% | 4.27% | | Total lending | 170 | 1.89% | 5.14% | | 31 December 2024 | | | | | Retail mortgages | 15 | 0.29% | 3.95% | | Consumer | 108 | 14.43% | 13.02% | | Corporate and commercial | 68 | 2.05% | 6.16% | | Total lending | 191 | 2.07% | 5.48% |
We recognised an expected credit loss expense of £14.3 million in 2025, with a cost of risk of 0.16%. We continue to observe a benign credit environment with resilient credit performance across all portfolios.
Our lending portfolio remains appropriately provisioned. As at 31 December 2025, our coverage ratio was 1.89% (31 December 2024: 2.07%) with non-performing loans reducing to 5.14% of the book.
Balance sheet
Lending
| 2025
£m | 2024
£m | Change
% | | Retail mortgages | 4,940 | 5,145 | (4%) | | Consumer lending | 114 | 745 | (85%) | | Corporate and commercial | 3,939 | 3,314 | 19% | | Gross lending | 8,993 | 9,204 | (2%) | | ECL allowance | (170) | (191) | (11%) | | Net lending | 8,823 | 9,013 | (2%) |
Net loans and advances to customers ended the year at £8,823 million, down 2% from the prior year (2024: £9,013 million) as the Bank continues to actively rotate assets into target segments of corporate, commercial and SME lending and specialist mortgages. In particular, we saw a 19% increase in the gross loans and advances to commercial customers to £3,939 million at 31 December 2025 (31 December 2024: £3,314 million), driven by a record £2.0 billion gross new lending in the year.
The consumer portfolio decreased from £745 million as at 31 December 2024 to £114 million as at 31 December 2024 due to the sale of the £584 million unsecured personal loan portfolio. This sale was in line with our strategic priorities and allows us to prioritise lending in target segments.
Retail mortgages decreased from £5,145 million to £4,940 million, as we continue to actively attrite the low-yielding prime residential back-book, replaced with higher-yielding specialist mortgages.
Treasury Portfolio
Over the year, we have continued to optimise our treasury portfolio to maximise our risk adjusted return on regulatory capital, particularly as rates have fallen. We ended the year with £6,345 million of treasury assets (31 December 2024: £7,301 million), comprising £4,160 million investment securities and £2,185 million cash and balances with other banks (31 December 2024: £4,490 million and £2,811 million respectively). Our investment securities remain high quality and liquid with 75% being AAA-rated and 25% AA- to AA+ rated, the AA portion being predominantly Gilts (31 December 2024: 75% AAA, 25% AA- to AA+).
Over the next 2 years approximately £1.5 billion of fixed rate treasury assets will mature at an average blended yield of just over 1%. These will be replaced by asset with yields in line with or greater than the prevailing Base Rate.
Other Assets
Other assets remained relatively flat year on year, at £1.3 billion (31 December 2024: £1.3 billion). Other assets include property, plant & equipment, intangible assets and deferred tax assets.
Deposits
| 2025
£m | 2024
£m | Change
% | | Retail customer (excluding retail partnerships) | 4,765 | 5,968 | (20%) | | Retail partnership | 1,832 | 1,785 | 3% | | Commercial customers (excluding SMEs) | 2,114 | 2,263 | (7%) | | SMEs | 4,734 | 4,442 | 7% | | Total customer deposits | 13,445 | 14,458 | (7%) | | Of which: | | | | | Demand: current accounts | 5,862 | 5,791 | 1% | | Demand: savings accounts | 6,901 | 7,534 | (8%) | | Fixed term: savings accounts | 682 | 1,133 | (40%) |
In 2025, our overall deposits reduced to £13,445 million, a 7% decrease from £14,458 million in 2024 as we continued to manage down excess liquidity, particularly expensive fixed-term deposits. We are committed to our relationship banking model, having opened three new stores in 2025, and with 44% of total deposits coming from current accounts, we have exited the year with the lowest cost of deposits of any UK High Street Bank. We also saw a 7% increase in SME deposits in line with the Bank’s strategy.
Liquidity
Our liquidity position remains strong and comfortably in excess of regulatory minimum requirements. We ended the year with a liquidity coverage ratio of 306% (31 December 2024: 337%) and a net stable funding ratio of 161% (31 December 2024: 169%). We hold large amounts of high-quality liquid assets totalling £5,459 million (2024: £6,071 million).
Capital
| 2025
£m | 2024
£m | Change
% | | CET1 capital1 | 840 | 808 | 4% | | RWAs | 6,711 | 6,442 | 4% | | CET1 ratio1 | 12.5% | 12.5% | 0bps | | Total capital ratio1 | 18.4% | 14.9% | 350bps | | Total capital plus MREL ratio1 | 26.1% | 23.0% | 310bps | | UK leverage ratio1 | 7.8% | 5.6% | 220bps |
Capital figures as at 31 December 2025 are presented on a proforma basis, including our profit for the year. The profit will only be eligible to be included in our capital resources following the completion of our audit and publication of our Annual Report and Accounts
Throughout the year, the Group maintained a strong capital position, ending the period with CET1, total capital and total capital plus MREL ratios of 12.5%, 18.4% and 26.1% respectively (31 December 2024: 12.5%, 14.9%, 23.0%), all comfortably above minimum regulatory requirements including applicable buffers.
Our capital position is well optimised for growth, with increases across all capital ratios driven by profit generation, the successful issuance of £250 million of Additional Tier 1 securities, and the sale of the unsecured personal loan portfolio.
Risk weighted assets increased to £6,711 million (31 December 2024: £6,442 million) reflecting the portfolio sale, offset by continued asset rotation into higher-density corporate, commercial and SME lending, and specialist mortgages.
Overall, the year-end capital and RWA profile reflects proactive management of the balance sheet to preserve resilience, optimise capital resources, and position the Group for sustainable future growth.
Looking Ahead
As we look ahead to 2026, we are committed to continued delivery against market guidance and delivering sustained growth in underlying profitability. Growth in RoTE is largely mechanical from hereon in, with a notable tailwind from treasury asset maturities in 2026.
Risk summary
2025 has been a year of growth and delivery. We are executing our strategy and delivering for our customers and shareholders whilst building a bank set up for sustained growth. Continued management of existing risks as well as those associated with a high pace and scale of change remain clear management priorities.
Approach to risk management
Our risk management framework underpins our ability to safely deliver, ensuring risks are carefully considered when making decisions and are managed within acceptable limits on an ongoing basis. The Board sets its appetite for risk and puts in place tools and resources to manage each of our principal risks inside this appetite.
Risk management is part of every colleague’s objectives and is embedded within our scorecard, against which performance is measured. Colleagues are able and encouraged to raise concerns, we take steps to ensure all applicable legal and regulatory requirements are met and we seek to maintain constructive and transparent relationships with our regulators.
We operate a ‘three lines of defence’ model of risk management and by leveraging well-defined governance structures and processes, promote individual accountability and action in mitigating our risk exposures.
Risk environment in 2025
Throughout 2025, our focus remained on supporting the Bank’s strategic growth while operating within our defined risk appetite.
Credit portfolio performance has remained resilient, with ECL stock, coverage ratio, and arrears reducing in the year driven by debt sales and partially offset by corporate and commercial portfolio growth. ECL stock reduced by £21 million to £170 million at 31 December 2025 (31 December 2025: £191 million) and coverage ratio reduced by 0.18% to 1.89% at 31 December 2025 (31 December 2025: 2.07%). We continue to monitor economic uncertainty and maintain prudent provisions.Our credit policy, risk appetite, and control frameworks have been updated to reflect the strategic growth areas in retail mortgages and corporate and commercial, and are accompanied by increased technical capability in underwriting, recoveries, and portfolio oversight.
Capital strength was further supported by the sale of an unsecured personal loan portfolio and the successful issuance of £250m of AT1 instruments, keeping all key ratios above regulatory requirements. Liquidity has remained robust throughout the year.
Maintaining and enhancing operational resilience continued to be a priority in 2025. During the year, the Bank deepened its strategic partnership with Infosys, expanding the outsourcing of business processes. This transition was supported by detailed planning and strong third‑party engagement, ensuring our control environment developed in step with new operating models.
The number of high‑impact cyber incidents across the UK this year has underscored the potential severity of disruption from a cyber event. Strengthening our cyber security posture remains fundamental to our overall resilience. We have continued to invest in modern, scalable defences informed by penetration testing and external expert assessments, working closely with regulators. Embedding threat‑led intelligence and resilience by design across our critical services and extended supply chain remains a core commitment.
Financial crime risk management remains a top priority for the Bank. During the year, we strengthened our control environment by recruiting highly experienced colleagues, optimising our operating model and integrating our financial crime and fraud risk management capabilities. We have invested further in our systems, completing the re-platforming of our core financial crime management solution and deploying new fraud payment profiling tools that are helping us limit losses. The Bank also launched a UK-first Scam Checker tool, developed with AI scam detection specialist Ask Silver, helping customers stay safe by analysing suspicious messages, emails, websites or documents. We launched a Financial Crime Intelligence Unit to strengthen our response to complex investigations, and, together with other UK banks, contributed to the Data Fusion pilot organised by the National Economic Crime Centre to combat serious organised crime.
Wider adoption of AI has created opportunities for improved efficiency and customer experience, balanced by the need for strong governance over data use, fairness, and model integrity. This year, we implemented policies and enhanced governance for AI risk management and as adoption scales, we remain focused on robust model risk management, transparency, explainability, and maintaining a consistent focus on good customer outcomes.
Principal risk exposures
On an ongoing basis, we assess our risks against risk appetite, including those that could result in events or circumstances that might threaten our business model, future performance, solvency or liquidity, and reputation. We consider the potential impact and likelihood of internal and external risk events and circumstances, and the timescales over which they may occur.
We identify, define and assess a range of principal risks to which we are exposed, for which risk appetite is set and monitored via key risk indicators. They are consistent with those set out in last year’s annual report and comprise:
•credit risk
•capital risk
•liquidity and funding risk
•market risk
•financial crime risk
•operational risk
•conduct risk
•regulatory risk
•legal risk
•model risk
•strategic risk.
Amongst these, certain risks have been considered most material over the course of the year.
Most material risks
| Risk | Exposure | Response | Outlook | | Credit risk | Our primary source of credit risk is through the loans, limits and advances we make available to our customers. We have exposures across three key areas: corporate and commercial, retail mortgages, and consumer lending.
Over the course of 2025, the macroeconomic environment has been stable but subdued, although uncertainty remains over the future path with inflation remaining above target levels and wider global political instability.Total ECL stock and coverage ratio have both decreased following the sale of the unsecured personal loan book with underlying changes in retail mortgages and corporate and commercial reflecting the growth in strategic areas. | We have an appetite and credit criteria appropriate for managing lending through an economic cycle. We are delivering the Bank’s strategy to grow corporate and commercial lending, and specialist mortgage lending, through our credit risk appetite, framework, and policies, managing exposure to risk to minimise losses.
We support customers who are in arrears, have payment shortfalls, or are in financial difficulties, to obtain the most appropriate outcome for both the Bank and the customer. Our policy and processes ensure that appropriate mechanisms and tools are in place to support customers during periods of financial difficulty and to minimise the duration of the difficulty and the consequence, costs and other impacts arising. | We remain in a strong position to support the Bank’s strategy for growth, maintaining our risk appetite and policies as this develops, in a way that appropriately manages credit risk.
Within the macroeconomic outlook, risks remain as central banks manage the course of interest rates in response to inflation whilst geopolitical risk continues from conflicts.
We utilise forward looking macroeconomic scenarios provided by Moody’s Analytics in the assessment of provisions. The use of an independent supplier for the provision of scenarios helps to ensure that the estimates are unbiased. The macroeconomic scenarios are assessed and reviewed monthly to ensure appropriateness and relevance to the ECL calculation. | | Capital risk | Capital risk exposures arise from the depletion of our capital resources which may result from:
increased RWAs
losses
changes to regulatory minima or other regulatory rules.
Our capital risk management approach is centred around ensuring we can maintain appropriate levels of capital to meet regulatory minima, including changes, and support our strategic objectives.
In December, the Bank of England confirmed that the Bank will be treated as a transfer firm under its MREL‑related resolution framework, effective 1 January 2026. | Our capital risk mitigation is focused on three key components:
sustainable profitability that allows us to generate organic capital growth
the continued optimisation of our balance sheet to ensure we are utilising our capital stack efficiently
continuing to assess the raising of external debt capital, as and when market conditions and opportunities allow.
The Board is committed to these principles and took steps through 2025 to strengthen the capital base. | The focus for 2026 remains on supporting the Bank’s strategy through an appropriate and efficient capital stack that allows us to lend in our target market whilst maintaining ratios above our regulatory minima. We continue to prepare for the implementation of Basel 3.1 from 1 January 2027. | | Financial crime risk | As a participant in the interconnected global financial system, the Bank’s financial crime exposure arises where customer accounts or infrastructure are leveraged to facilitate the flow of illicit funds - including money laundering, terrorist financing, proliferation financing, bribery and corruption, and tax evasion – or to process transactions and maintain relationships that would contravene applicable sanctions obligations.
Without an adequate and proportionate financial crime framework, risks may go unaddressed and business activities may take place in contravention of financial crime law and regulatory requirements.
In addition, an inability to conduct appropriate oversight may affect the Bank’s ability to operate effectively, with potential impacts to both customer and own objectives, exposing the Bank to increased reputational risk. | We are committed to safeguarding both ourselves and our customers from financial crime. Our strategic response centres on continuously maturing our financial crime framework, prioritising sustained investment in advanced detection technologies and regular review of our operating model’s adequacy.
We prioritise targeted recruitment of high-skilled specialists to ensure our control environment and expertise evolve with increasingly sophisticated financial criminal typologies, and proactively integrate emerging threat intelligence into our response. | Recognising the evolving landscape of financial crime risk against the backdrop of increasing regulatory focus, we continue to invest in our financial crime control environment to prevent financial crime. We will continue to strengthen our control framework to ensure systems and controls are adequate and effective to mitigate the risks we are exposed to, and remain aligned to our legal and regulatory requirements. | | Fraud risk | The Bank’s fraud exposure primarily arises from the exploitation of our payment infrastructure and digital channels by external actors, through sophisticated social engineering, mandate fraud, and cyber-enabled account takeover, or the use of our credit facilities for fraudulent gain.
We identify and assess fraud risk as a subset of operational risk. | We prioritise sustained investment in advanced detection technologies and regular review of our operating model’s adequacy, including targeted recruitment of high-skilled specialists to ensure our control environment and expertise evolve with increasingly sophisticated financial criminal typologies. This allows us to proactively enhance existing controls based on emerging intelligence and the shifting typologies of global fraud networks. | Recognising the evolving landscape of fraud risk against the backdrop of increasing regulatory focus, we continue to invest in our control environment to prevent fraud and remain aligned to our legal and regulatory requirements. | | Information security and cyber | Information Security and Cyber risk arises from potential compromise of critical systems and data. The external threat environment has intensified, with ransomware, service disruption and data theft activity widespread and a volatile geopolitical environment potentially increasing the threat to the UK. Attacks are becoming more sophisticated, increasingly leveraging automation and targeting operational vulnerabilities, contributing to a rise in significant incidents across the UK.
We identify and assess information security and cyber risk as a subset of operational risk. | We have continued to enhance the Bank’s security controls including those related to vulnerability management, identity and access management and endpoint detection.
Informed by penetration testing and expert reviews, we are making significant investments in future-ready cyber defences, applying advanced threat intelligence throughout business and risk activities, as well as applying the principal of cyber resilience by design across all our critical services including our supply chain. | Cyber risk is expected to remain elevated as threat actors adopt increasingly advanced techniques and organisations increase their dependence on digital services. Broader technology trends suggest that cyber incidents will continue to be a top operational risk and will continue to evolve our security posture to ensure our controls remain proportionate and effective against emerging threats. |
Consolidated statement of comprehensive income
| | Years ended 31 December | | Notes | 2025
£’million | 2024
£’million | | Interest income | 2 | 725.4 | 935.4 | | Interest expense | 2 | (265.1) | (557.5) | | Net interest income | | 460.3 | 377.9 | | Fee and commission income | 3 | 96.7 | 98.0 | | Fee and commission expense | 3 | (5.6) | (4.8) | | Net fee and commission income | | 91.1 | 93.2 | | Net gains on sale of assets | 4 | 5.2 | (101.4) | | Other income | 5 | 36.7 | 35.6 | | Total income | | 593.3 | 405.3 | | General operating expenses | 6 | (429.4) | (489.0) | | Depreciation and amortisation | | (61.7) | (77.3) | | Impairment and write-offs of property, plant, equipment and intangible assets | | (0.7) | (44.0) | | Total operating expenses | | (491.8) | (610.3) | | Expected credit loss expense | 13 | (14.3) | (7.1) | | Profit/(loss) before tax | | 87.2 | (212.1) | | Taxation | 7 | (17.5) | 254.6 | | Profit for the year | | 69.7 | 42.5 | | | | | | Profit attributable to ordinary shareholders | | 52.4 | 42.5 | | Profit attributable to other equity holders | | 17.3 | – | | Profit for the year | | 69.7 | 42.5 |
Consolidated statement of comprehensive income
| | Years ended 31 December | | Notes | 2025
£’million | 2024
£’million | | Profit for the year | | 69.7 | 42.5 | | Other comprehensive income for the year | | | | | Items which will be reclassified subsequently to profit or loss: | | | | | Movement in respect of investment securities held at FVOCI (net of tax): | | | | | changes in fair value | | 4.2 | 3.4 | | Total other comprehensive income | | 4.2 | 3.4 | | Total comprehensive income for the year | | 73.9 | 45.9 | | | | | | Total comprehensive income attributable to ordinary shareholders | | 56.6 | 45.9 | | Total comprehensive income attributable to other equity holders | | 17.3 | – | | Total comprehensive income for the year | | 73.9 | 45.9 | | Earnings per share | | | | | Basic (pence) | 16 | 7.8 | 6.3 | | Diluted (pence) | 16 | 7.7 | 6.3 |
Consolidated balance sheet
| | Years ended 31 December | | Notes | 2025
£’million | 2024
£’million | | Cash and balances with the other banks | | 2,185 | 2,811 | | Loans and advances to customers | 9 | 8,823 | 9,013 | | Investment securities held at fair value through other comprehensive income | 10 | 218 | 377 | | Investment securities held at amortised cost | 10 | 3,942 | 4,113 | | Derivative financial assets | | 23 | 16 | | Property, plant and equipment | | 705 | 711 | | Intangible assets | | 143 | 127 | | Prepayments and accrued income | | 81 | 93 | | Deferred tax assets (net) | 7 | 230 | 240 | | Other assets | | 125 | 82 | | Total assets | | 16,475 | 17,582 | | Deposits from customers | | 13,445 | 14,458 | | Deposits from central banks | | 400 | 400 | | Debt securities | | 684 | 675 | | Repurchase agreements | | 73 | 391 | | Derivative financial liabilities | | - | 1 | | Lease liabilities | 11 | 185 | 205 | | Deferred grants | | 10 | 13 | | Provisions | | 6 | 11 | | Other liabilities | | 188 | 245 | | Total liabilities | | 14,991 | 16,399 | | Called-up share capital and share premium | 12 | 146 | 144 | | Retained earnings | | 1,075 | 1022 | | Other equity instruments | 12 | 242 | – | | Other reserves | | 21 | 17 | | Total equity | | 1,484 | 1,183 | | Total equity and liabilities | | 16,475 | 17,582 |
Consolidated statement of changes in equity
For the year ended 31 December 2025
| Called up
share
capital and share premium
£’million | Merger
reserve
£’million | Retained
earnings
£’million | FVOCI
reserve
£’million | Share
option
reserve
£’million | Otherequity
instruments
£’million | Total
equity
£’million | | Balance as at 1 January 2025 | 144 | – | 1,022 | (7) | 24 | – | 1,183 | | Profit for the year | – | – | 52 | – | – | 17 | 69 | | Other comprehensive expense (net of tax) relating to investment securitiesdesignated at fair value through other comprehensive income | – | – | – | 4 | – | – | 4 | | Total comprehensive income | – | – | 52 | 4 | – | 17 | 73 | | Issuance of shares under existing employee schemes | 2 | – | – | – | (2) | – | – | | Issuance of other equity instruments (net of costs) | – | – | – | – | – | 242 | 242 | | Equity-settled share-based payment charges | – | – | – | – | 3 | – | 3 | | Distributions on equity instruments | – | – | – | – | – | (17) | (17) | | Other movements in share option charges | – | – | 1 | – | (1) | – | – | | Balance as at 31 December 2025 | 146 | – | 1,075 | (3) | 24 | 242 | 1,484 | | Balance as at 1 January 2024 | 144 | – | 978 | (11) | 23 | – | 1,134 | | Profit for the year | – | – | 43 | – | – | – | 43 | | Other comprehensive income (net of tax) relating to investment securities designated at fair value through other comprehensive income | – | – | – | 4 | – | – | 4 | | Total comprehensive income | – | – | 43 | 4 | – | – | 47 | | Equity-settled share-based payment charges | – | – | – | – | 2 | – | 2 | | Other movements in share option charges | – | – | 1 | – | (1) | – | – | | Balance as at 31 December 2024 | 144 | – | 1,022 | (7) | 24 | – | 1,183 |
Consolidated cash flow statement
| | Years ended 31 December | | Notes | 2025
£’million | 2024
£’million | | Reconciliation of profit/(loss) before tax to net cash flows from operating activities: | | | | | Profit/(loss) before tax | | 87 | (212) | | Adjustments for non-cash items | 17 | (392) | (359) | | Interest received | | 749 | 948 | | Interest paid | | (320) | (585) | | Changes in other operating assets | | 113 | 3,320 | | Changes in other operating liabilities | | (1,325) | (4,497) | | Net cash (outflows) from operating activities | | (1,088) | (1,385) | | Cash flows from investing activities | | | | | Sales, redemptions and paydowns of investment securities | | 1,154 | 1,017 | | Purchase of investment securities | | (816) | (630) | | Purchase of property, plant and equipment | | (34) | (41) | | Purchase and development of intangible assets | | (48) | (19) | | Net cash inflows from investing activities | | 256 | 327 | | Cash flows from financing activities | | | | | Repayment of capital elements of leases | 11 | (19) | (22) | | Issuance of shares and other-equity instruments (net of costs) | 12 | 242 | – | | Distributions on equity instruments | 12 | (17) | – | | Net cash inflows/(outflows) from financing activities | | 206 | (22) | | Net (decrease) in cash and cash equivalents | | (626) | (1,080) | | Cash and cash equivalents at start of year | | 2,811 | 3,891 | | Cash and cash equivalents at end ofyear | | 2,185 | 2,811 |
1. Basis of preparation and significant accounting policies
Basis of preparation
The financial information in this document is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2024 have been filed with the Registrar of Companies. The report of the auditor on those statutory accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Act. The statutory accounts for the year ended 31 December 2025 will be filed with the Registrar of Companies in accordance with section 441 of the Act. The auditor has not yet reported on these accounts.
2. Net interest income
Interest income
| 2025
£’million | 2024
£’million | | Cash and balances held with other banks | 93.8 | 193.1 | | Loans and advances to customers | 507.9 | 586.2 | | Investment securities held at amortised cost | 113.4 | 126.1 | | Investment securities held at FVOCI | 3.9 | 18.3 | | Interest income calculated using the effective interest rate method | 719.0 | 923.7 | | Derivatives in hedge relationships | 6.4 | 11.7 | | Total interest income | 725.4 | 935.4 |
Interest expense
| 2025
£’million | 2024
£’million | | Deposits from customers | 143.2 | 303.6 | | Deposits from central banks | 17.0 | 124.2 | | Debt securities | 85.0 | 84.8 | | Lease liabilities | 10.5 | 12.4 | | Repurchase agreements | 7.6 | 26.5 | | Interest expense calculated using the effective interest rate method | 263.3 | 551.5 | | Derivatives in hedge relationships | 1.8 | 6.0 | | Total interest expense | 265.1 | 557.5 |
3. Net fee and commission income
| 2025
£’million | 2024
£’million | | Service charges and other fee income | 38.3 | 38.6 | | Safe deposit box income | 20.1 | 19.0 | | ATM and interchange fees | 38.3 | 40.4 | | Fee and commission income | 96.7 | 98.0 | | Fee and commission expense | (5.6) | (4.8) | | Total net fee and commission income | 91.1 | 93.2 |
4. Net gain/(loss) on sale of assets
| 2025
£’million | 2024
£’million | | Loan portfolios | 5.2 | (101.4) | | Total net gain/(loss) on sale of assets | 5.2 | (101.4) |
5. Other income
| 2025
£’million | 2024
£’million | | Foreign currency transactions | 27.0 | 29.7 | | Rental income | 0.8 | 1.3 | | Deferred grant income | 2.8 | 3.4 | | Gains on lease modification | 5.0 | – | | Other income | 1.1 | 1.2 | | Total other income | 36.7 | 35.6 |
6. General operating expenses
| 2025
£’million | 2024
£’million | | People costs | 197.8 | 209.6 | | Information technology costs | 56.4 | 60.1 | | Occupancy costs | 30.2 | 30.9 | | Money transmission and other banking-related costs | 43.2 | 49.3 | | Transformation costs | 14.4 | 31.1 | | Remediation costs | 1.2 | 21.3 | | Capability and Innovation Fund costs | 2.7 | 3.4 | | Legal and regulatory fees | 9.2 | 9.0 | | Professional fees | 35.4 | 27.7 | | Printing, postage and stationery costs | 5.5 | 7.5 | | Travel costs | 1.5 | 1.4 | | Marketing costs | 6.7 | 9.4 | | Other | 25.2 | 28.3 | | Total general operating expenses | 429.4 | 489.0 |
7. Taxation
Tax (expense)/credit
| 2025
£’million | 2024
£’million | | Current tax | | | | Current tax | (9.2) | – | | Total current tax (expense) | (9.2) | – | | Deferred tax | | | | Origination and reversal of temporary differences | (12.4) | 254.1 | | Adjustment in respect of prior years | 4.1 | 0.5 | | Total deferred tax (expense)/credit | (8.3) | 254.6 | | Total tax (expense)/credit | (17.5) | 254.6 |
Reconciliation of the total tax expense
| 2025
£’million | Effective
tax rate
% | 2024
£’million | Effective
tax rate
% | | Accounting profit/(loss) before tax | 87.2 | | (212.1) | | | Tax (expense)/credit at statutory tax rate of 25% (2024: 25%) | (21.8) | 25.0% | 53.0 | 25.0% | | Tax effects of: | | | | | | Non-deductible expenses – depreciation on non-qualifying fixed assets | (3.0) | 3.4% | (3.0) | (1.4%) | | Non-deductible expenses – other | (0.1) | 0.1% | (7.7) | (3.6%) | | AT1 interest | 4.3 | (5.0%) | – | – | | Share-based payments | (1.0) | 1.2% | (0.2) | (0.1%) | | Adjustment in respect of prior years | 4.1 | (4.5%) | 0.6 | 0.3% | | Movement in recognised deferred tax asset for unused tax losses | – | – | 211.9 | 99.9% | | Tax (expense)/credit reported in the consolidated income statement | (17.5) | 20.2% | 254.6 | 120.0% |
Deferred tax assets
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 tax expense:
| 31 December 2025 | | Unused
tax losses
£’million | Investment
securities
and
impairments
£’million | Share-
based
payments
£’million | Property,
plant and
equipment
£’million | Intangible
assets
£’million | Total
£’million | | Deferred tax assets | 259 | 1 | – | – | – | 260 | | Deferred tax liabilities | – | 1 | – | (30) | (1) | (30) | | Deferred tax assets (net) | 259 | 2 | – | (30) | (1) | 230 | | 1 January 2025 | 269 | 4 | 1 | (31) | (3) | 240 | | Prior year movement | – | - | - | 2 | 2 | 4 | | Income statement | (10) | (1) | (1) | (1) | – | (13) | | Other comprehensive income | - | (1) | - | - | - | (1) | | 31 December 2025 | 259 | 2 | – | (30) | (1) | 230 | | 31 December 2024 | | Unused
tax losses
£’million | Investment
securities
and
impairments
£’million | Share-
based
payments
£’million | Property,
plant and
equipment
£’million | Intangible
assets
£’million | Total
£’million | | Deferred tax assets | 269 | 1 | 1 | – | – | 271 | | Deferred tax liabilities | – | 3 | – | (31) | (3) | (31) | | Deferred tax assets (net) | 269 | 4 | 1 | (31) | (3) | 240 | | 1 January 2024 | 14 | 6 | 1 | (29) | (5) | (13) | | Prior year movement | (1) | (1) | - | - | 1 | (1) | | Income statement | 256 | - | - | (2) | 1 | 255 | | Other comprehensive expense | - | (1) | - | - | - | (1) | | 31 December 2025 | 269 | 4 | 1 | (31) | (3) | 240 |
Offsetting of deferred tax assets and liabilities
We have presented all the deferred tax assets and liabilities above on a net basis within the balance sheet. This is on the basis that all our deferred tax assets and liabilities relate to taxes levied by HMRC and we have a legally enforceable right to offset these.
Deferred Tax on unused Tax losses
We have recognised deferred tax assets on all tax losses. Metro Bank has forecasts showing an expectation of future profit which support recognition of the deferred tax asset.
8. Financial instruments
Our financial instruments primarily comprise customer deposits, loans and advances to customers and investment securities, all of which arise as a result of our normal operations.
The main financial risks arising from our financial instruments are credit risk, liquidity risk and market risks (price and interest rate risk).
The financial instruments we hold are simple in nature and we do not consider that we have made any significant or material judgements relating to the classification and measurement of financial instruments under IFRS 9.
Cash and balances with the Bank of England, trade and other receivables, trade and other payables and other assets and liabilities which meet the definition of financial instruments are not included in the following tables.
Classification of financial instruments
| 31 December 2025 | | Fair value
through
profit and
loss
£’million | FVOCI
£’million | Amortised
cost
£’million | Total
£’million | | Assets | | | | | | Loans and advances to customers | – | – | 8,823 | 8,823 | | Investment securities | – | 218 | 3,942 | 4,160 | | Derivative financial assets | 23 | – | – | 23 | | Liabilities | | | | | | Deposits from customers | – | – | 13,445 | 13,445 | | Deposits from central banks | – | – | 400 | 400 | | Debt securities | – | – | 684 | 684 | | Repurchase agreements | – | – | 73 | 73 |
| 31 December 2024 | | Fair value
through
profit
and loss
£’million | FVOCI
£’million | Amortised
cost
£’million | Total
£’million | | Assets | | | | | | Loans and advances to customers | – | – | 9,013 | 9,013 | | Investment securities | – | 377 | 4,113 | 4,490 | | Derivative financial assets | 16 | – | – | 16 | | Liabilities | | | | | | Deposits from customers | – | – | 14,458 | 14,458 | | Deposits from central banks | – | – | 400 | 400 | | Debt securities | - | – | 675 | 675 | | Derivative financial liabilities | 1 | – | – | 1 | | Repurchase agreements | – | – | 391 | 391 |
9. Loans and advances to customers
| 31 December 2025 | 31 December 2024 | | Gross
carrying
amount
£’million | ECL
allowance
£’million | Net
carrying
amount
£’million | Gross
carrying
amount
£’million | ECL
allowance
£’million | Net
carrying
amount
£’million | | Consumer lending | 114 | (67) | 47 | 745 | (108) | 637 | | Retail mortgages | 4,940 | (16) | 4,924 | 5,145 | (15) | 5,130 | | Corporate and commercial lending | 3,939 | (87) | 3,852 | 3,314 | (68) | 3,246 | | Total loans and advances to customers | 8,993 | (170) | 8,823 | 9,204 | (191) | 9,013 |
Gross loans and advances by product category
| 31 December
2025
£’million | 31 December
2024
£’million | | Overdrafts | 33 | 39 | | Credit cards | 13 | 20 | | Term loans | 63 | 679 | | Consumer auto-finance | 5 | 7 | | Total consumer lending | 114 | 745 | | Residential owner occupied | 3,500 | 3,692 | | Retail buy-to-let | 1,440 | 1,453 | | Total retail mortgages | 4,940 | 5,145 | | Total retail lending | 5,054 | 5,890 | | Professional buy-to-let | 177 | 283 | | Bounce back loans | 185 | 346 | | Coronavirus business interruption loans | 18 | 47 | | Recovery loan scheme1 | 166 | 260 | | Core corporate and commercial lending | 2,363 | 1,599 | | Corporate and commercial term loans | 2,909 | 2,535 | | Overdrafts and revolving credit facilities | 221 | 220 | | Credit cards | 10 | 7 | | SME Asset Finance Ltd and SME Invoice Finance Ltd | 799 | 552 | | Total corporate and commercial lending | 3,939 | 3,314 | | Gross loans and advances to customers | 8,993 | 9,204 |
1. Recovery loan scheme includes £45 million acquired from third parties under forward flow arrangements (31 December 2024: £45 million). The loans are held in a trust arrangement in which we hold 99% of the beneficial interest, with the issuer retaining the remaining 1% (the trust retains the legal title loans).
10. Investment securities
| 31 December
2025
£’million | 31 December
2024
£’million | | Investment securities held at FVOCI | 218 | 377 | | Investment securities held at amortised cost | 3,942 | 4,113 | | Total investment securities | 4,160 | 4,490 |
Investment securities held at FVOCI
| 31 December
2025
£’million | 31 December
2024
£’million | | Sovereign bonds | 62 | 149 | | Covered bonds | 31 | 83 | | Multi-lateral development bank bonds | 125 | 145 | | Total investment securities held at FVOCI | 218 | 377 |
Investment securities held at amortised cost
| 31 December
2025
£’million | 31 December
2024
£’million | | Sovereign bonds | 982 | 875 | | Residential mortgage-backed securities | 935 | 876 | | Covered bonds | 438 | 478 | | Multi-lateral development bank bonds | 1,273 | 1,576 | | Asset backed securities | 314 | 308 | | Total investment securities held at amortised cost | 3,942 | 4,113 |
11. Leases
Lease liabilities
| 2025
£’million | 2024
£’million | | 1 January | 205 | 234 | | Additions and modifications | 1 | 1 | | Disposals | (13) | (20) | | Lease payments made | (19) | (22) | | Interest on lease liabilities | 11 | 12 | | 31 December | 185 | 205 |
Minimum lease payments
| 31 December
2025
£’million | 31 December
2024
£’million | | Within one year | 19 | 20 | | Due in one to five years | 68 | 74 | | Due in more than five years | 80 | 101 | | Total | 167 | 195 |
12. Share capital, share premium and other equity
Called-up ordinary share capital, issued and fully paid
| 2025 | | Number
of shares
£’million | Share capital
£’million | Share
premium
£’million | Total share
capital
and share
premium
£’million | Other equity
instruments
£’million | | At 1 January | 673.0 | – | 144.4 | 144.4 | – | | Issued to staff under existing employee share schemes | 0.3 | 0.2 | 1.4 | 1.6 | – | | AT1 securities issuance | – | – | – | – | 241.8 | | At 31 December | 673.3 | 0.2 | 145.8 | 146.0 | 241.8 |
| 2024 | | Number
of shares
£’million | Share capital
£’million | Share
premium
£’million | Total share
capital
and share
premium
£’million | Other equity
instruments
£’million | | At 1 January | 672.7 | – | 144.4 | 144.4 | – | | Issued to staff under existing employee share schemes | 0.3 | – | – | – | – | | At 31 December | 673.0 | – | 144.4 | 144.4 | – |
Other equity instruments
Other equity instruments of £242 million (31 December 2024: Nil) include AT1 securities issued by Metro Bank Holdings PLC. The AT1 securities are perpetual securities with no fixed maturity or redemption date and are structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date.
In 2025, there was one issuance of AT1 instruments, in the form of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities, for £250 million (2024: Nil). These AT1 securities are classified as an equity instrument under IAS 32 “Financial Instruments: Presentation” with the proceeds recognised in equity net of transaction costs of £8 million. Interest payments on these securities are recognised as distributions from equity in the period in which they are paid.
AT1 equity instruments
| Initial call date | 2025
£’million | | At 1 January | | – | | Issued during the year: | | | | 13.875% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities | 26-Mar-30 | 250 | | Cost of issuance | | (8) | | Profit for the year attributable to other equity holders | | 17 | | Distributions on other equity instruments | | (17) | | At 31 December | | 242 |
The principal terms of the AT1 securities are described below:
The securities rank behind the claims against Metro Bank PLC of:
a)unsubordinated creditors;
b)claims which are expressed to be subordinated to the claims of unsubordinated creditors of Metro Bank PLC but not further or otherwise; or
c)claims which are, or are expressed to be, junior to the claims of other creditors of Metro Bank PLC, whether subordinated or unsubordinated, other than claims which rank, or are expressed to rank, pari passu with, or junior to, the claims of holders of the AT1 securities.
The securities are undated and are redeemable, at the option of Metro Bank PLC, in whole on:
a)the initial reset date, or on any fifth anniversary after the initial reset date; or
b)any day falling in a named period ending on the initial reset date, or on any fifth anniversary after the initial reset date. In addition, the AT1 securities are redeemable, at the option of Metro Bank PLC, in whole in the event of certain changes in the tax or regulatory treatment of the securities. Any redemptions require the prior consent of the PRA.
Interest on the securities will be due and payable only at the sole discretion of Metro Bank PLC, and Metro Bank PLC has sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any interest payment date.
13. Expected credit losses and credit risk
Expected credit loss expense
| 2025
£’million | 2024
£’million | | Retail mortgages | 1 | (4) | | Consumer lending1 | (9) | – | | Commercial lending | 19 | (4) | | Write-offs and other movements | 3 | 15 | | Total expected credit loss expense | 14 | 7 |
1.Consumer lending and write-offs has been adjusted for the £584 million sale of unsecured personal loans.
Loss allowance
Total loans and advances to customers
| Gross carrying amount | | Loss allowance | | Net carrying amount | | £’million | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | 1January2025 | 7,723 | 978 | 504 | (1) | 9,204 | | (39) | (29) | (124) | 1 | (191) | | 7,684 | 949 | 380 | – | 9,013 | | Transfersto/(from)Stage11 | 301 | (288) | (13) | – | – | | (8) | 7 | 1 | – | – | | 293 | (281) | (12) | – | – | | Transfersto/(from)Stage2 | (281) | 285 | (3) | – | 1 | | 2 | (2) | – | – | – | | (279) | 283 | (3) | – | 1 | | Transfersto/(from)Stage3 | (111) | (37) | 148 | – | – | | – | 3 | (4) | – | (1) | | (111) | (34) | 144 | – | –
(1) | | Netremeasurementdue to transfers2 | – | – | – | – | – | | 7 | (8) | (23) | – | (24) | | 7 | (8) | (23) | – | (24) | | Newlending3 | 2,227 | 94 | 2 | – | 2,323 | | (14) | (1) | (1) | – | (16) | | 2,213 | 93 | 1 | – | 2,307 | | Repayments, additional drawdownsandinterestaccrued | (384) | (36) | (20) | – | (440) | | – | – | – | – | – | | (384) | (36) | (20) | – | (440) | | Derecognitions4 | (1,656) | (283) | (156) | – | (2,095) | | 15 | 10 | 33 | – | 58 | | (1,641) | (273) | (123) | – | (2,037) | | Changestomodelassumptions5 | – | – | – | – | – | | 5 | 2 | (3) | – | 4 | | 5 | 2 | (3) | – | 4 | | 31 December 2025 | 7,819 | 713 | 462 | (1) | 8,993 | | (32) | (18) | (121) | 1 | (170) | | 7,787 | 695 | 341 | – | 8,823 | | Off-balancesheet items | | | | | | | | | | | | | | | | | | | Commitmentsandguarantees6 | | | | | 718 | | | | | | – | | | | | | 718 |
| Gross carrying amount | | Loss allowance | | Net carrying amount | | £’million | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | 1January2024 | 10,596 | 1,511 | 389 | – | 12,496 | | (63) | (43) | (93) | – | (199) | | 10,533 | 1,468 | 296 | – | 12,297 | | Transfersto/(from)Stage11 | 385 | (368) | (17) | – | – | | (11) | 10 | 1 | – | – | | 374 | (358) | (16) | – | – | | Transfersto/(from)Stage2 | (409) | 416 | (7) | – | – | | 2 | (2) | – | – | – | | (407) | 414 | (7) | – | – | | Transfersto/(from)Stage3 | (192) | (100) | 292 | – | – | | 4 | 7 | (11) | – | – | | (188) | (93) | 281 | – | – | | Netremeasurementdue to transfers2 | – | – | – | – | – | | 9 | (13) | (40) | – | (44) | | 9 | (13) | (40) | – | (44) | | Newlending3 | 1,717 | 147 | – | – | 1,864 | | (11) | (3) | (1) | – | (15) | | 1,706 | 144 | (1) | – | 1,849 | | Repayments, additional drawdownsandinterestaccrued | (619) | (121) | (32) | (1) | (773) | | – | – | – | – | – | | (619) | (121) | (32) | (1) | (773) | | Derecognitions4 | (3,755) | (507) | (121) | – | (4,383) | | 11 | 11 | 20 | – | 42 | | (3,744) | (496) | (101) | – | (4,341) | | Changestomodelassumptions5 | – | – | – | – | – | | 20 | 4 | – | 1 | 25 | | 20 | 4 | – | 1 | 25 | | 31 December 2024 | 7,723 | 978 | 504 | (1) | 9,204 | | (39) | (29) | (124) | 1 | (191) | | 7,684 | 949 | 380 | – | 9,013 | | Off-balancesheet items | | | | | | | | | | | | | | | | | | | Commitmentsandguarantees6 | | | | | 718 | | | | | | - | | | | | | 718 |
Represents stage transfers prior to any ECL remeasurements.
Represents the remeasurement between the 12 month and lifetime ECL due to stage transfer. In addition, it includes any ECL change resulting from model assumptions and forward-looking information on these loans.
Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed as well as any ECL that has been recognised in relation to these loans during the year.
Represents the decrease in balances resulting from loans and advances that have been fully repaid, sold or written off.
Represents the change in ECL to those loans that remain within the same stage through the year.
Retail mortgages
| Gross carrying amount | | Loss allowance | | Net carrying amount | | £’million | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | 1January2025 | 4,358 | 584 | 203 | – | 5,145 | | (4) | (4) | (7) | – | (15) | | 4,354 | 580 | 196 | – | 5,130 | | Transfersto/(from)Stage1 | 212 | (202) | (10) | – | – | | (1) | 1 | – | – | – | | 211 | (201) | (10) | – | – | | Transfersto/(from)Stage2 | (142) | 145 | (3) | – | – | | – | – | – | – | – | | (142) | 145 | (3) | – | – | | Transfersto/(from)Stage3 | (48) | (24) | 72 | – | – | | – | 1 | (1) | – | – | | (48) | (23) | 71 | – | – | | Netremeasurementdue to transfers | – | – | – | – | – | | 1 | (1) | (2) | – | (2) | | 1 | (1) | (2) | – | (2) | | Newlending | 605 | 66 | 1 | – | 672 | | (1) | – | – | – | (1) | | 604 | 66 | 1 | – | 671 | | Repayments,additionaldrawdownsand interest accrued | (107) | (9) | 1 | – | (115) | | – | – | – | – | – | | (107) | (9) | 1 | – | (115) | | Derecognitions | (654) | (64) | (44) | – | (762) | | – | – | 2 | – | 2 | | (654) | (64) | (42) | – | (760) | | 31 December 2025 | 4,224 | 496 | 220 | – | 4,940 | | (5) | (3) | (8) | – | (16) | | 4,219 | 493 | 212 | – | 4,924 |
| Gross carrying amount | | Loss allowance | | Net carrying amount | | £’million | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | 1 January 2024 | 6,887 | 784 | 146 | – | 7,817 | | (7) | (6) | (6) | – | (19) | | 6,880 | 778 | 140 | – | 7,798 | | Transfers to/(from) Stage 1 | 146 | (138) | (8) | – | – | | (1) | 1 | – | – | – | | 145 | (137) | (8) | – | – | | Transfers to/(from) Stage 2 | (171) | 173 | (2) | – | – | | – | – | – | – | – | | (171) | 173 | (2) | – | – | | Transfers to/(from) Stage 3 | (53) | (46) | 99 | – | – | | – | 1 | (1) | – | – | | (53) | (45) | 98 | – | – | | Net remeasurement due to transfers | – | – | – | – | – | | 1 | (1) | (2) | – | (2) | | 1 | (1) | (2) | – | (2) | | New lending | 728 | 126 | – | – | 854 | | (1) | (2) | – | – | (3) | | 726 | 124 | – | – | 851 | Repayments, additional drawdowns
and interest accrued | (113) | (13) | 1 | – | (124) | | – | – | – | – | – | | (113) | (12) | 1 | – | (124) | | Derecognitions | (3,066) | (303) | (33) | – | (3,402) | | 3 | 2 | 2 | – | 7 | | (3,063) | (301) | (31) | – | (3,395) | | Changes to model assumptions | – | – | – | – | – | | 1 | 1 | – | – | 2 | | 1 | 1 | – | – | 2 | | 31 December 2024 | 4,358 | 584 | 203 | – | 5,145 | | (4) | (4) | (7) | – | (15) | | 4,354 | 580 | 196 | – | 5,130 |
Consumer lending
| Gross carrying amount | | Loss allowance | | Net carrying amount | | £’million | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | 1January2025 | 496 | 153 | 97 | (1) | 745 | | (12) | (9) | (88) | 1 | (108) | | 484 | 144 | 9 | – | 637 | | Transfersto/(from)Stage1 | 7 | (6) | (1) | – | – | | (2) | 1 | 1 | – | – | | 5 | (5) | – | – | – | | Transfersto/(from)Stage2 | (1) | 1 | – | – | – | | – | – | – | – | – | | (1) | 1 | – | – | – | | Transfersto/(from)Stage3 | (1) | (4) | 5 | – | – | | – | 1 | (1) | – | – | | (1) | (3) | 4 | – | – | | Netremeasurementdue to transfers | – | – | – | – | – | | 2 | – | (3) | – | (1) | | 2 | – | (3) | – | (1) | | Newlending | 4 | – | – | – | 4 | | – | – | – | – | – | | 4 | – | – | – | 4 | | Repayments,additionaldrawdownsand interest accrued | (12) | – | (5) | – | (17) | | – | – | – | – | – | | (12) | – | (5) | – | (17) | | Derecognitions | (456) | (140) | (22) | – | (618) | | 11 | 6 | 20 | – | 37 | | (445) | (134) | (2) | – | (581) | | Changestomodelassumptions | – | – | – | – | – | | 1 | – | 4 | – | 5 | | 1 | – | 4 | – | 5 | | 31 December 2025 | 37 | 4 | 74 | (1) | 114 | | – | (1) | (67) | 1 | (67) | | 37 | 3 | 7 | – | 47 |
| Gross carrying amount | | Loss allowance | | Net carrying amount | | £’million | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | 1 January 2024 | 906 | 314 | 77 | – | 1,297 | | (26) | (16) | (66) | – | (108) | | 880 | 298 | 11 | – | 1,189 | | Transfers to/(from) Stage 1 | 80 | (79) | (1) | – | – | | (3) | 3 | – | – | – | | 77 | (76) | (1) | – | – | | Transfers to/(from) Stage 2 | (74) | 74 | – | – | – | | 1 | (1) | – | – | – | | (73) | 73 | – | – | – | | Transfers to/(from) Stage 3 | (27) | (14) | 41 | – | – | | 1 | 4 | (5) | – | – | | (26) | (10) | 36 | – | – | | Net remeasurement due to transfers | – | – | – | – | – | | 2 | (4) | (25) | – | (27) | | 2 | (4) | (25) | – | (27) | | New lending | 4 | – | – | – | 4 | | – | – | – | – | – | | 4 | – | – | – | 4 | Repayments, additional drawdowns
and interest accrued | (226) | (83) | (10) | (1) | (320) | | – | – | – | – | – | | (226) | (83) | (10) | (1) | (320) | | Derecognitions | (167) | (59) | (10) | – | (236) | | 4 | 2 | 9 | – | 15 | | (163) | (57) | (1) | – | (221) | | Changes to model assumptions | – | – | – | – | – | | 9 | 3 | (1) | 1 | 12 | | 9 | 3 | (1) | 1 | 12 | | 31 December 2024 | 496 | 153 | 97 | (1) | 745 | | (12) | (9) | (88) | 1 | (108) | | 484 | 144 | 9 | – | 637 |
Corporate and commercial lending
| Gross carrying amount | | Loss allowance | | Net carrying amount | | £’million | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | 1 January 2025 | 2,869 | 241 | 204 | – | 3,314 | | (23) | (16) | (29) | – | (68) | | 2,846 | 225 | 175 | – | 3,246 | | Transfers to/(from) Stage 1 | 82 | (80) | (2) | – | - | | (5) | 5 | – | – | – | | 77 | (75) | (2) | – | – | | Transfers to/(from) Stage 2 | (138) | 139 | – | – | 1 | | 2 | (2) | – | – | – | | (136) | 137 | – | – | 1 | | Transfers to/(from) Stage 3 | (62) | (9) | 71 | – | – | | – | 1 | (2) | – | (1) | | (62) | (8) | 69 | – | (1) | | Net remeasurement due to transfers | – | – | – | – | – | | 4 | (7) | (18) | – | (21) | | 4 | (7) | (18) | – | (21) | | New lending | 1,619 | 28 | 1 | – | 1,648 | | (13) | (1) | (1) | – | (15) | | 1,606 | 27 | - | – | 1,633 | Repayments, additional drawdowns
and interest accrued | (265) | (27) | (16) | - | (308) | | – | – | – | – | – | | (265) | (27) | (16) | - | (308) | | Derecognitions | (547) | (79) | (90) | – | (716) | | 4 | 4 | 11 | – | 19 | | (543) | (75) | (79) | – | (697) | | Changes to model assumptions | – | – | – | – | – | | 4 | 2 | (7) | – | (1) | | 4 | 2 | (7) | – | (1) | | 31 December 2025 | 3,558 | 213 | 168 | – | 3,939 | | (27) | (14) | (46) | – | (87) | | 3,531 | 199 | 122 | – | 3,852 |
| Gross carrying amount | | Loss allowance | | Net carrying amount | | £’million | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | Stage 1 | Stage 2 | Stage 3 | POCI | Total | | 1 January 2024 | 2,803 | 413 | 166 | – | 3,382 | | (30) | (21) | (21) | – | (72) | | 2,773 | 392 | 145 | – | 3,310 | | Transfers to/(from) Stage 1 | 159 | (151) | (8) | – | – | | (7) | 6 | 1 | – | – | | 152 | (145) | (7) | – | – | | Transfers to/(from) Stage 2 | (164) | 169 | (5) | – | – | | 1 | (1) | – | – | – | | (163) | 168 | (5) | – | – | | Transfers to/(from) Stage 3 | (112) | (40) | 152 | – | – | | 3 | 2 | (5) | – | – | | (109) | (38) | 147 | – | – | | Net remeasurement due to transfers | – | – | – | – | – | | 6 | (9) | (13) | – | (16) | | 6 | (9) | (13) | – | (16) | | New lending | 984 | 21 | 1 | – | 1,006 | | (10) | (1) | (1) | – | (12) | | 974 | 20 | – | – | 994 | Repayments, additional drawdowns
and interest accrued | (279) | (26) | (24) | – | (329) | | – | – | – | – | – | | (279) | (26) | (24) | – | (329) | | Derecognitions | (522) | (145) | (78) | – | (745) | | 4 | 7 | 9 | – | 20 | | (518) | (138) | (69) | – | (725) | | Changes to model assumptions | – | – | – | – | – | | 10 | 1 | 1 | – | 12 | | 10 | 1 | 1 | – | 12 | | 31 December 2024 | 2,869 | 241 | 204 | – | 3,314 | | (23) | (16) | (29) | – | (68) | | 2,846 | 225 | 175 | – | 3,246 |
Credit risk exposures
Retail mortgages
| 31 December 2025 | 31 December 2024 | | £’million | Stage 1
12-month
ECL | Stage 2
Lifetime
ECL | Stage 3
Lifetime
ECL | POCI
Lifetime
ECL | Stage 1
12-month
ECL | Stage 2
Lifetime
ECL | Stage 3
Lifetime
ECL | POCI
Lifetime
ECL | | Up to date | 4,221 | 450 | 59 | – | 4,356 | 504 | 57 | – | | 1 to 29 days past due | 3 | 17 | 9 | – | 2 | 21 | 11 | – | | 30 to 89 days past due | – | 29 | 31 | – | – | 59 | 21 | – | | 90+ days past due | – | – | 121 | – | – | – | 114 | – | | Gross carrying amount | 4,224 | 496 | 220 | – | 4,358 | 584 | 203 | – |
Consumer lending
| 31 December 2025 | 31 December 2024 | | £’million | Stage 1
12-month
ECL | Stage 2
Lifetime
ECL | Stage 3
Lifetime
ECL | POCI
Lifetime
ECL | Stage 1
12-month
ECL | Stage 2
Lifetime
ECL | Stage 3
Lifetime
ECL | POCI
Lifetime
ECL | | Up to date | 36 | 2 | 4 | – | 496 | 141 | 2 | 1 | | 1 to 29 days past due | – | 1 | – | – | – | 2 | 1 | – | | 30 to 89 days past due | 1 | 1 | 1 | – | – | 10 | 5 | – | | 90+ days past due | – | – | 69 | (1) | – | – | 89 | – | | Gross carrying amount | 37 | 4 | 74 | (1) | 496 | 153 | 97 | 1 |
Corporate and commercial lending
| 31 December 2025 | 31 December 2024 | | £’million | Stage 1
12-month
ECL | Stage 2
Lifetime
ECL | Stage 3
Lifetime
ECL | POCI
Lifetime
ECL | Stage 1
12-month
ECL | Stage 2
Lifetime
ECL | Stage 3
Lifetime
ECL | POCI
Lifetime
ECL | | Up to date | 3,544 | 176 | 78 | – | 2,842 | 204 | 86 | – | | 1 to 29 days past due | 14 | 28 | 5 | – | 27 | 16 | 2 | – | | 30 to 89 days past due | – | 9 | 5 | – | – | 21 | 60 | – | | 90+ days past due | – | – | 80 | – | – | – | 56 | – | | Gross carrying amount | 3,558 | 213 | 168 | – | 2,869 | 241 | 204 | – |
Credit risk concentration
Retail mortgage lending by repayment type
| 31 December 2025
£’million | | 31 December 2024
£’million | | Retail owner occupied | Retail
buy-to-let | Total
retail mortgages | | Retail owner occupied | Retail
buy-to-let | Total
retail mortgages | | Interest only | 1,180 | 1,378 | 2,558 | | 1,330 | 1,398 | 2,728 | | Capital and repayment | 2,320 | 62 | 2,382 | | 2,362 | 55 | 2,417 | | Total retail mortgage lending | 3,500 | 1,440 | 4,940 | | 3,692 | 1,453 | 5,145 |
Retail mortgage lending by geographic exposure
| 31 December 2025
£’million | | 31 December 2024
£’million | | Retail owner occupied | Retail
buy-to-let | Total
retail mortgages | | Retail owner occupied | Retail
buy-to-let | Total
retail mortgages | | Greater London | 1,211 | 776 | 1,987 | | 1,324 | 808 | 2,132 | | South-east | 919 | 286 | 1,205 | | 975 | 283 | 1,258 | | South-west | 299 | 66 | 365 | | 313 | 63 | 376 | | East of England | 364 | 115 | 479 | | 379 | 114 | 493 | | North-west | 156 | 47 | 203 | | 155 | 44 | 199 | | West Midlands | 147 | 53 | 200 | | 154 | 47 | 201 | | Yorkshire and the Humber | 117 | 25 | 142 | | 107 | 25 | 132 | | East Midlands | 103 | 42 | 145 | | 104 | 40 | 144 | | Wales | 65 | 12 | 77 | | 67 | 13 | 80 | | North-east | 34 | 7 | 41 | | 34 | 7 | 41 | | Scotland | 85 | 11 | 96 | | 80 | 9 | 89 | | Total retail mortgage lending | 3,500 | 1,440 | 4,940 | | 3,692 | 1,453 | 5,145 |
Retail mortgage lending by DTV
| 31 December 2025
£’million | | 31 December 2024
£’million | | Retail owner occupied | Retail
buy-to-let | Total
retail mortgages | | Retail owner occupied | Retail
buy-to-let | Total
retail mortgages | | Less than 50% | 1,140 | 212 | 1,352 | | 1,282 | 263 | 1,545 | | 51–60% | 489 | 182 | 671 | | 601 | 210 | 811 | | 61–70% | 603 | 394 | 997 | | 611 | 417 | 1,028 | | 71–80% | 771 | 628 | 1,399 | | 761 | 543 | 1,304 | | 81–90% | 438 | 23 | 461 | | 397 | 16 | 413 | | 91–100% | 58 | – | 58 | | 39 | 3 | 42 | | More than 100% | 1 | 1 | 2 | | 1 | 1 | 2 | | Total retail mortgage lending | 3,500 | 1,440 | 4,940 | | 3,692 | 1,453 | 5,145 |
Corporate and commercial lending – excluding BBLS by repayment type
| 31 December 2025
£’million | | 31 December 2024
£’million | | Professional
buy-to-let | Other
term loans | Total corporate and commercial term loans | | Professional
buy-to-let | Other
term loans | Total corporate and commercial term loans | | Interest only | 172 | 650 | 822 | | 270 | 393 | 663 | | Capital and repayment | 5 | 1,897 | 1,902 | | 13 | 1,513 | 1,526 | | Total corporate and commercial term loans | 177 | 2,547 | 2,724 | | 283 | 1,906 | 2,189 |
Corporate and commercial term lending – excluding BBLS by geographic exposure
| 31 December 2025
£’million | | 31 December 2024
£’million | | Professional
buy-to-let | Other
term loans | Total corporate and commercial term loans | | Professional
buy-to-let | Other
term loans | Total corporate and commercial term loans | | Greater London | 100 | 1,025 | 1,125 | | 181 | 813 | 994 | | South-east | 42 | 442 | 484 | | 48 | 334 | 382 | | South-west | 7 | 122 | 129 | | 10 | 90 | 100 | | East of England | 10 | 224 | 234 | | 20 | 200 | 220 | | North-west | 4 | 101 | 105 | | 7 | 115 | 122 | | West Midlands | 3 | 273 | 276 | | 3 | 185 | 188 | | Yorkshire and the Humber | 2 | 56 | 58 | | 2 | 11 | 13 | | East Midlands | 5 | 64 | 69 | | 6 | 55 | 60 | | Wales | 2 | 24 | 26 | | 2 | 4 | 6 | | North-east | 1 | 71 | 72 | | 2 | 73 | 75 | | Scotland | – | 67 | 67 | | – | 3 | 3 | | Northern Ireland | 1 | 1 | 2 | | 1 | 1 | 2 | | National | - | 77 | 77 | | 1 | 22 | 23 | | Total corporate and commercial term loans | 177 | 2,547 | 2,724 | | 283 | 1,906 | 2,189 |
Corporate and commercial term lending – excluding BBLS by sector exposure
| 31 December 2025
£’million | | 31 December 2024
£’million | | Professional
buy-to-let | Other
term loans | Total corporate and commercial term loans | | Professional
buy-to-let | Other
term loans | Total corporate and commercial term loans | | Real estate (rent, buy and sell) | 177 | 486 | 663 | | 283 | 414 | 697 | | Hospitality | – | 736 | 736 | | – | 442 | 442 | | Health and social work | – | 584 | 584 | | – | 430 | 430 | | Legal, accountancy and consultancy | – | 254 | 254 | | – | 207 | 207 | | Retail | – | 208 | 208 | | – | 122 | 122 | | Real estate (develop) | – | 14 | 14 | | – | 14 | 14 | | Recreation, cultural and sport | – | 74 | 74 | | – | 82 | 82 | | Construction | – | 24 | 24 | | – | 36 | 36 | | Education | – | 7 | 7 | | – | 13 | 13 | | Real estate (management of) | – | 4 | 4 | | – | 5 | 5 | | Investment and unit trusts | – | 48 | 48 | | – | 6 | 6 | | Other | – | 108 | 108 | | – | 135 | 135 | | Total corporate and commercial term loans | 177 | 2,547 | 2,724 | | 283 | 1,906 | 2,189 |
14. Legal and regulatory matters
As part of the normal course of business we are subject to legal and regulatory matters. It is not always practicable to predict the outcome, if any, of certain matters or reliably estimate any financial impact, and in such cases, a provision may not be recognised in the financial statements but a contingent liability disclosed. Any inclusion does not constitute an admission of wrongdoing or legal liability. As at 31 December 2025, we do not have any material contingent liabilities.
15. Fair value of financial instruments
| 31-Dec-25 | | | | | With | | | Quoted | Using | significant | | | market | observable | unobservable | | | Carrying | price | inputs | inputs | Total fair | | value | Level 1 | Level 2 | Level 3 | value | | £’million | £’million | £’million | £’million | £’million | | Assets | | | | | | | Loans and advances to customers | 8,823 | – | – | 8,867 | 8,867 | | Investment securities held at fair value through other comprehensive income | 218 | 218 | – | – | 218 | | Investment securities held at amortised cost | 3,942 | 2,641 | 1,250 | – | 3,891 | | Derivative financial assets | 23 | – | 23 | – | 23 | | Liabilities | | | | | | | Deposits from customers | 13,445 | – | – | 13,444 | 13,444 | | Deposits from central banks | 400 | – | – | 400 | 400 | | Debt securities | 684 | – | 780 | – | 780 | | Repurchase agreements | 73 | – | – | 73 | 73 | | 31-Dec-24 | | | | | With | | | Quoted | Using | significant | | | market | observable | unobservable | | | Carrying | price | inputs | inputs | Total fair | | value | Level 1 | Level 2 | Level 3 | value | | £’million | £’million | £’million | £’million | £’million | | Assets | | | | | | | Loans and advances to customers | 9,013 | - | - | 8,981 | 8,981 | | Investment securities held at fair value through other comprehensive income | 377 | 377 | – | – | 377 | | Investment securities held at amortised cost | 4,113 | 2,857 | 1,122 | – | 3,979 | | Derivative financial assets | 16 | – | 16 | – | 16 | | Liabilities | | | | | | | Deposits from customers | 14,458 | – | – | 14,458 | 14,458 | | Deposits from central banks | 400 | – | – | 400 | 400 | | Debt securities | 675 | – | 711 | – | 711 | | Derivative Financial Liabilities | 1 | – | 1 | – | 1 | | Repurchase agreements | 391 | – | – | 391 | 391 |
Information on how fair values are calculated are explained below:
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.
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).
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.
Debt securities
Fair values are determined using the quoted market price at the balance sheet date.
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 either short-dated or are on a variable rate which aligns to the current market rate.
Derivative financial assets
The fair values of derivatives are obtained from discounted cash flow models as appropriate.
16. Earnings per share
Basic earnings per share (‘EPS’) is calculated by dividing the profit/(loss) attributable to ordinary shareholders of Metro Bank by the weighted average number of ordinary shares in issue during the period.
Diluted EPS has been calculated by dividing the profit attributable to our ordinary shareholders by the weighted average number of ordinary shares in issue during the year plus the weighted average number of ordinary shares that would be issued on the conversion to shares of options granted to colleagues.
| 2025 | 2024 | | Profit/(loss) attributable to ordinary shareholders (£’million) | 52.4 | 42.5 | | Weighted average number of ordinary shares in issue (thousands) | | | | Basic | 673,151 | 672,784 | | Adjustment for share awards | 7,979 | 2,466 | | Diluted | 681,130 | 675,250 | | Earnings per share (pence) | | | | Basic | 7.8 | 6.3 | | Diluted | 7.7 | 6.3 |
17. Non-cash items
| 2025
£’million | 2024
£’million | | Interest receivable | (725) | (935) | | Interest payable | 265 | 558 | | Depreciation and amortisation | 62 | 77 | | Impairment and write-offs of property, plant, equipment and intangible assets | 1 | 44 | | Expected credit loss expense | 14 | 7 | | Share option charge | 3 | 2 | | Grant income recognised in the income statement | (3) | (3) | | Amounts provided for (net of amounts released) | (4) | (8) | | Gain/(loss) on sale of assets | (5) | (101) | | Total adjustments for non-cash items | (392) | (359) |
18. Post balance sheet events
There are no post balance sheets to note.
Reconciliation from statutory to underlying results
| Year ended 31 December 2025 | Statutory basis
£’million | Impairment and write-off of property, plant, equipment and intangible assets
£’million | Net C&I
costs
£’million | Transformation costs
£’million | Remediation costs
£’million | Portfolio Sales £’million | Cost associated with capital raise
£’million | Underlying basis
£’million | | | Net interest income | 460.3 | – | – | – | – | – | – | 460.3 | | | Net fee and commission income | 91.1 | – | – | – | – | – | – | 91.1 | | | Net gains on sale of assets | 5.2 | – | – | – | – | (5.2) | – | – | | | Other income | 36.7 | – | (2.8) | – | – | (0.2) | – | 33.7 | | | Total income | 593.3 | – | (2.8) | – | – | (5.4) | – | 585.1 | | | General operating expenses | (429.4) | – | 2.8 | 14.4 | 1.2 | – | – | (411.0) | | | Depreciation and amortisation | (61.7) | – | – | – | – | – | – | (61.7) | | | Impairment and write-offs of PPE and intangible assets | (0.7) | 0.7 | – | – | – | – | – | – | | | Total operating expenses | (491.8) | 0.7 | 2.8 | 14.4 | 1.2 | – | – | (472.7) | | | Expected credit loss expense | (14.3) | – | – | – | – | – | – | (14.3) | | | Profit before tax | 87.2 | 0.7 | – | 14.4 | 1.2 | (5.4) | – | 98.1 | |
| Year ended 31 December 2024 | Statutory basis
£’million | Impairment and write-off of property, plant, equipment and intangible assets
£’million | Net C&I
costs
£’million | Transformation costs
£’million | Remediation costs
£’million | Portfolio Sales £’million | Cost associated with capital raise
£’million | Underlying basis
£’million | | | Net interest income | 377.9 | – | – | – | – | – | – | 377.9 | | | Net fee and commission income | 93.2 | – | – | – | – | – | – | 93.2 | | | Net loss on sale of assets | (101.4) | – | – | – | – | 101.4 | – | – | | | Other income | 35.6 | – | (3.4) | – | – | 0.2 | - | 32.4 | | | Total income | 405.3 | – | (3.4) | – | – | 101.6 | - | 503.5 | | | General operating expenses | (489.0) | – | 3.4 | 31.1 | 21.3 | - | 0.1 | (433.1) | | | Depreciation and amortisation | (77.3) | – | – | – | – | – | – | (77.3) | | | Impairment and write-offs of PPE and intangible assets | (44.0) | 44.0 | – | – | – | – | – | – | | | Total operating expenses | (610.3) | 44.0 | 3.4 | 31.1 | 21.3 | - | 0.1 | (510.4) | | | Expected credit loss expense | (7.1) | – | – | – | – | – | – | (7.1) | | | Loss before tax | (212.1) | 44.0 | – | 31.1 | 21.3 | 101.6 | 0.1 | (14.0) | |
Capital information
Key metrics
| 31 December
2025
£’million | 31 December
2024
£’million | | Available capital | | | | CET1 capital | 840 | 808 | | Additional Tier 1 capital | 242 | – | | Tier 1 capital | 1,082 | 808 | | Total capital | 1,232 | 958 | | Total capital plus MREL | 1,754 | 1,479 | | Risk-weighted assets | | | | Total risk-weighted assets | 6,711 | 6,442 | | | | | Risk-based capital ratios as % of risk-weighted assets | | | | CET1 ratio | 12.5% | 12.5% | | Tier 1 ratio | 16.1% | 12.5% | | Total capital ratio | 18.4% | 14.9% | | Total capital plus MREL ratio | 26.1% | 23.0% | | Additional CET1 buffer requirements as % of risk-weighted assets | | | | Capital conservation buffer requirement | 2.5% | 2.5% | | Countercyclical buffer requirement | 2.0% | 2.0% | | Total of bank CET1 specific buffer requirements | 4.5% | 4.5% | | | | | Leverage ratio | | | | UK leverage ratio | 7.8% | 5.6% | | | | | Liquidity coverage ratio | | | | Liquidity coverage ratio | 306% | 337% |
Leverage ratio
The table below shows our Tier 1 Capital and Total Leverage Exposure that are used to derive the UK leverage ratio. The UK leverage ratio is the ratio of Tier 1 Capital to Total Leverage exposure.
| 31 December
2025
£’million | 31 December
2024
£’million | | Common equity tier 1 capital | 840 | 808 | | Additional tier 1 capital | 242 | - | | Tier 1 capital | 1,082 | 808 | | UK leverage exposure | 13,837 | 14,417 | | UK leverage ratio | 7.8% | 5.6% |
Liquidity coverage ratio
The table below shows the bank's Total HQLA and total net cash outflow that are used to derive the liquidity coverage ratio.
| 31 December
2025
£’million | 31 December
2024
£’million | | Total high-quality liquid assets | 5,459 | 6,071 | | Total net cash outflow | 1,782 | 1,799 | | Liquidity coverage ratio | 306% | 337% |
Capital resources
The table below summarises the composition of regulatory capital on a proforma basis, including the profit for the year.
| | 31 December
2025
£’million | 31 December
2024
£’million | | Share capital and premium | | 146 | 144 | | Retained earnings | | 1,075 | 1,022 | | Other reserves | | 21 | 18 | | Intangible assets | | (143) | (127) | | Other regulatory adjustments | | (259) | (249) | | CET 1 capital | | 840 | 808 | | Additional Tier 1 capital | | 242 | – | | Tier 1 capital | | 1,082 | 808 | | Tier 2 capital | | 150 | 150 | | Total capital resources | | 1,232 | 958 | | | | | | MREL eligible debt | | 522 | 521 | | TCR + MREL | | 1,754 | 1,479 |
Risk-weighted assets
| | 31 December
2025
£’million | 31 December
2024
£’million | | Credit Risk | | 5,947 | 5,703 | | Operational Risk | | 759 | 720 | | Counterparty Credit Risk | | 5 | 19 | | Total risk-weighted assets | | 6,711 | 6,442 |
Our capital adequacy was in excess of the minimum required by the regulators at all times.
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