Metro Bank PLC MTRO, -3.87% on Thursday reported a narrowed pretax loss for 2022 having benefited from higher interest margin and as legacy issues regarding U.K. regulatory investigations closed during the year.
The U.K. lender made a pretax loss of 70.7 million pounds ($85 million) for the year ended Dec. 31 from a loss of GBP245.1 million in 2021, as legacy issues regarding the Bank of England’s Prudential Regulation Authority and Financial Conduct Authority investigations into historical risk weighted assets reporting and their associated costs concluded in December.
Stripping out exceptional and other one-off items the adjusted pretax loss was GBP50.6 million compared with a loss of GBP171.3 million.
The Office of Foreign Assets Control investigation into sanctions breaches was also closed during the year with no financial penalty.
“The outcome was within the range of outcomes we expected and we can now put this legacy issue firmly behind us, having greatly improved our reporting processes and controls,” the company said.
Metro’s net interest income came in at GBP404.1 million, up from GBP295.3 million, reflecting the bank’s balance sheet optimization strategy of shifting toward higher yielding assets and rolling off more expensive fixed term deposits, it said.
Net interest margin–the difference between interest paid on deposits and that earned on loans–rose to 1.92%, from 1.40%.
As of Dec. 31, the bank’s CET1 ratio was 10.3%, which compares with 12.6% a year prior.
Looking ahead, the bank said it is targeting mid-single digit return on tangible equity by 2024.
“We remain cautious in our outlook, given the political and economic uncertainty, however, we believe the bank is in a good place to be able to respond to any further headwinds in the form of market volatility or economic downturn,” Metro said.
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