Metro Bank boss: We could have made a profit sooner but I wanted to build a bank my kids would be proud of
Metro Bank announced its full-year results this morning, revealing it had grown closer to getting out of the red but was still yet to turn an annual profit.
The challenger bank revealed this morning underlying losses before tax had improved 75 per cent for the year to £11.7m, up from £46.6m, and statutory losses before tax narrowed to £17.2m, compared with £56.8m.
However, Metro Bank's chief executive Craig Donaldson told City PM the bank could have easily entered the black by now, but feels it is more important to build a sustainable business for the long-term than to grab a quick buck in the short term.
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"We could have been profitable a lot earlier if we weren't investing in the growth," Donaldson said.
He added: "It's important that we grow for the long-term. This is not a fly-by-night. I want to create a bank that my kids are happy and proud of."
Donaldson also said he was particularly pleased the company's brand recognition scores for the London market had grown to 84 per cent, and the bank's results statement also proudly trumpets that it won City PM's award for bank of the year last year.
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Some shareholders may be less supportive of the slow burn approach. Panmure Gordon gave the bank a "sell" rating in a note published last week, with analysts saying that, while they did believe the challenger could be highly profitable, "we prefer those banks that already are".
Donaldson offered some promising words for investors who are perhaps wondering if the new lender will ever make it out of the red, revealing he envisions that 2017 will be the first full year the bank will be profitable.
"We do expect a full-year profit this year," he said, pointing out the bank had been profitable on an underlying basis in both the third and fourth quarter of 2016.