Metro Bank shares soared on Thursday after the UK challenger bank reported a profitable first quarter and outlined significant progress in its ongoing turnaround strategy. The strong results and strategic milestones have reignited investor confidence, sending the lender’s stock sharply higher in early trading.
Metro Bank posted a profit for the first quarter of 2025, marking a significant shift from previous periods of uncertainty. The bank credited its improved performance to a combination of higher net interest margins and disciplined cost control. Executives said the results reflect the benefits of a comprehensive restructuring plan launched last year, aimed at restoring profitability and strengthening the bank’s balance sheet.
“Metro Bank’s return to profitability demonstrates the effectiveness of our strategic repositioning,” said Chief Executive Daniel Frumkin. “We have focused on optimizing our deposit base, rotating our asset mix, and maintaining strong cost discipline. These efforts are delivering tangible results and setting the stage for sustainable growth.”
The bank’s net interest margin rose during the quarter, driven by a shift toward higher-yielding assets and a reduction in expensive fixed-term deposits. Metro Bank also completed the sale of a £584 million unsecured personal loan portfolio, generating an £11 million gain and freeing up capital for expansion in commercial and specialist mortgage lending.
While total deposits declined 4% to £13.8 billion, Metro Bank’s core current account franchise continued to grow. The bank opened approximately 20,000 new personal and 10,000 new business current accounts in the first quarter, underscoring its appeal to both retail and business customers. Management said the reduction in deposits was a planned move to optimize liquidity and improve profitability.
In addition to its improved earnings, Metro Bank bolstered its capital position by issuing £250 million in Additional Tier 1 (AT1) capital. Analysts say this move provides the bank with greater financial flexibility and supports its ambitions for further growth in commercial and SME lending.
Looking ahead, Metro Bank expressed confidence in meeting its full-year targets. The bank’s lending pipeline remains robust, with corporate, commercial, and SME credit applications equivalent to more than half of last year’s total lending. Executives highlighted the bank’s focus on specialist mortgages and relationship-driven business banking as key drivers of future growth.
The turnaround story has resonated with investors, who drove Metro Bank shares sharply higher following the announcement. Market observers say the bank’s profitable quarter, strategic progress, and clear communication with stakeholders have positioned it as a standout performer among UK challenger banks.
As Metro Bank continues to execute its transformation plan, industry watchers will be monitoring its ability to sustain momentum and deliver on its growth ambitions in the competitive UK banking sector. For now, the bank’s profitable first quarter and accelerating turnaround have given shareholders reason to cheer.