Nearly half a million people have opened accounts at Metro Bank, as the biggest of the “challenger” banks revealed 10 new branch openings – but said it has yet to turn a profit.
During 2014 Metro Bank saw its deposits soar from £1.3bn to £2.9bn, with lending growing to £1.6bn from £754m.
Customer accounts increased to 447,000, a year-on-year growth of 63%. But the bank continued to make losses, notching up a deficit of £8.9m in the fourth quarter of 2014, which it attributed to spending on staff, infrastructure and technology.
It said it was the sixth consecutive quarter of declining losses, and compares to a loss of £9.4m after tax in the third quarter.
Since its launch in Holborn, central London in 2010, Metro has opened 31 more branches across the capital and south-east. It said another 10 will open in 2015, including in Brighton, Cambridge, Southend and Harrow. Its workforce has expanded to just above 1,500, with 500 new jobs created during the year.
Its growth comes despite the fact that the bank says it is more interested in service than in appearing in best buy tables for savings or mortgages. About its best offering at the moment is a two-year fixed-rate cash Isa paying 1.8%, which creeps into Moneyfacts best buy deals behind the Post Office’s 1.95% rate.
Metro says its approach is to offer the same deals to existing customers rather than chase after new customers with teaser rates.
Much of its growth in deposits has come from business customers. At the end of the fourth quarter, deposits from business customers were 64% of total deposits, and lending to businesses made up 45% of total lending.
Craig Donaldson, chief executive of Metro Bank, said: “2014 was another great year for Metro Bank. Throughout the year we saw substantial growth in deposits and lending, and the number of personal and business customers joining the banking revolution has continued to increase. As we start a new year, we’re excited to continue innovating and providing a real banking choice to the British people, as well as maintaining our commitment to deliver the best in service and convenience.”
