Metro Bank hits £16m profit in first half of 2023

Metro Bank has returned to profit in the first six months of the year after a loss in 2022, with the bank attributing its stronger financial results to keeping a tight rein on costs while benefitting from interest rate hikes.

The mid-sized British lender’s first half accounts recorded an underlying pre-tax profit of over £16 million in the six months to 30 June in contrast to a £48 million loss in the previous year.

The introduction of successive rate increases by the Bank of England (BoE) has enabled lenders to make more money on borrowing despite the threat to the economy posed by rampant inflation, which has helped boost profits at the bank.

BoE governor Andrew Bailey recently called for interest rate-setters to focus on addressing inflation ahead of concerns over the general health of the global banking sector.

As reported by Reuters, in a speech at the London School of Economics, Bailey stated that while there were "big strains" in the global banking sector, banks in Britain were resilient and able to support the economy.

"With the Financial Policy Committee on the case of securing financial stability, the Monetary Policy Committee can focus on its own important job of returning inflation to target," he said. “When we look at the outlook for inflation today, we have to recognise that the full effect of the higher level of Bank Rate is still to work its way through financial markets and the real economy.”

More recently, the central bank announced plans to check whether banks can be smoothly wound down in a crisis from October with the enactment of “living wills” in light of the collapse of Credit Suisse earlier this year and its forced takeover by UBS.

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