Metro Bank delivered a record £98 million underlying profit for 2025, smashing cost reduction targets and signaling a successful pivot to higher-margin lending. The 15-year-old bank reported a 22% jump in net interest income to £460 million and a 16% revenue increase to £585 million, driven by a significant 107 basis point rise in net interest margin to 2.98%. Operating costs fell 7% to £473 million, exceeding the bank's 4-5% reduction goal.

This performance stems from a strategic shift. Total loans dipped 2% to £8.823 billion as Metro Bank rotated assets towards higher-yielding segments, particularly corporate lending which surged 34% to £3.570 billion following record gross new lending of £2 billion. Specialist mortgages saw a massive 137% increase to £1.657 billion. Meanwhile, customer deposits fell 7% to £13.445 billion as the bank managed down excess liquidity, lowering the cost of deposits to 1.06% from 1.95%.

Financial strength improved, with the CET1 ratio reaching 12.5% and the total capital plus MREL ratio rising to 26.1%. CEO Daniel Frumkin attributed the results to focused execution and the business pivot. The bank now expects a return on tangible equity exceeding 13% in Q4 2026, 15% for 2027, and 18% for 2028, with exit net interest margins projected between 3.40-4.00% for 2026 and 3.75-4.50% for 2027.

Metro Bank's record profit underscores the effectiveness of its strategic realignment towards premium lending products and cost discipline, boosting investor confidence in its future trajectory.