(Reuters) – Britain’s Metro Bank Plc <MTRO.L> reported a doubling of underlying pretax profit in the third quarter thanks to a strong loan book, while issuing a warning about “competitive trends” in the mortgage market.
The bank, the first new UK high street bank in 150 years when it launched in 2010, raised 303 million pounds this year to replenish funds used to buy a large mortgage portfolio, as it aims to more than double its loan book within three years.
Its common equity tier-one capital ratio (CET1) – a key measure of financial strength – stood at 15.7 percent at the end of September, while net interest margin (NIM) fell to 1.77 percent from 1.94 percent, hurt by mortgage market competition.
“Third quarter 2018 results demonstrate continued growth across Metro Bank,” the bank said.
“Competitive trends in the mortgage market, however, have persisted despite the base rate increase in August as we have continued to focus on high quality growth of low risk assets.”
That warning comes on the heels of a Bank of England survey this month that said increasingly cautious lenders expect to scale back mortgage lending in the next three months to the greatest extent since the height of the 2008 financial crisis.
Third-quarter underlying pretax profit at the lender, one of a new class of UK challenger banks set up to challenge Britain’s big banks after the crisis, rose to 15.1 million pounds from 7.2 million pounds a year earlier.
(Reporting by Muvija M and Noor Zainab Hussain in Bengaluru)