Metro Bank profit jumps as it bucks branch closure trend
Metro Bank secured its highest half-year profit on record in the first six months of 2026 as it bucked an industry-wide trend of branch closures and grew its small business offering.
The FTSE 250 bank recorded a £60.7m pre-tax profit, up 41 per cent from the same period last year.
This was driven by a five per cent jump in revenue to £301m. Net interest income – which makes up around 80 per cent of the group’s income streams – led with an eight per cent rise to £241.5m.
Meanwhile, fee and other income tumbled 13 per cent to £55m. But this was partly offset by a £4.4m gain on asset sales, swinging from a £200,000 loss in the first half of 2025. The firm’s total loan book swelled four per cent to £9.2bn.
Metro has set its sights on the small business lending space amid a row back from industry giants, with the area typically providing higher margins for lenders as they are able to charge higher interest rates.
The bank’s core target lending, which covers corporate, small business and specialist mortgages, grew 43 per cent year-on-year to £6.2bn, helping replace legacy residential mortgage and consumer run-off books. It sold off its £584m portfolio of unsecured personal loans at the start of 2025 as part of its shift in focus to specialist lending.
The group’s net interest margin – a key indicator of profitability from lending – rose to 3.18 per cent in the half but Metro said it exited the second quarter at 3.25 per cent. The bank is targeting a margin range of 3.4 to four per cent by December 2026.
Metro reaffirmed its targets for return on tangible equity, a key profit metric, expecting to achieve over 13 per cent by the final quarter of 2026 and over 18 per cent by 2028.
It also revealed it would continue its regional expansion push into Northern economic hubs, with new store leases signed across Newcastle, Leeds and Nottingham in the first half.
Top banks have largely looked to slash their physical estates in recent years. Barclays revealed a major U-turn in April, opting to increase its footprint beyond its current 206 sites despite closing around 80 per cent of its sites since 2019.