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1. Company Snapshot

1.a. Company Description

Metro Bank PLC, together with its subsidiaries, provides retail and commercial banking services in the United Kingdom.The company offers personal banking products and services, including current, cash, and savings accounts; residential mortgages; credit cards and personal loans; pet insurance; and safe deposit box services.It also provides business banking products and services comprising business bank, commercial and community current, foreign currency, and insolvency practitioner accounts; deposit accounts, including business and community instant access deposit and fixed term deposit, business notice account, client premium and flexible client term deposit, and business loan calculator accounts; business and commercial loans and overdrafts, asset and invoice financing, bounce back loan, and recovery loan scheme.


In addition, the company offers private banking services, such as private bank, saving, foreign currency, and money management accounts; and partnership loans, overdrafts, unsecured consumer lending, automotive finance, and digital lending products for SMEs. Metro Bank PLC was incorporated in 2007 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on MTRO

Metro Bank PLC's recent performance has been negatively driven by a 35% decline in revenue to £398.2m in FY 2024, missing expectations. The bank's full-year earnings release highlighted significant challenges, including a substantial drop in net interest income and a rise in operating expenses. Additionally, Metro Bank's asset quality issues persist, with a notable increase in impairment charges. Furthermore, the bank's capital adequacy ratio remains under pressure, which may limit its ability to pursue growth initiatives.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Metro Bank’s credit file markers are adding to the pain of our son’s death

Nov -10

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Why The Narrative Around Metro Bank Is Shifting With Analyst Upgrades and Renewed Caution

Nov -07

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Metro Bank returns to profit after cutting costs and boosting lending

Aug -06

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Undiscovered Gems In The UK To Watch This July 2025

Jul -31

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Exclusive-Metro's biggest shareholder open to selling stake, sources say

Jun -20

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Metro Bank launches AI-powered scam detection tool

Apr -07

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Cairn Homes And Two Other Undiscovered Gems In The United Kingdom

Apr -03

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Gamma Communications And 2 Other Undiscovered Gems In The UK Market

Mar -05

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Retail and Commercial Banking Services

Expected Growth: 3.0%

Metro Bank PLC's 3.0% growth in Retail and Commercial Banking Services is driven by increasing customer acquisition, expansion of branch network, and enhanced digital banking capabilities. Additionally, competitive pricing, improved customer service, and targeted marketing campaigns have contributed to the growth. Furthermore, the bank's focus on SME lending and mortgage products has also supported the segment's growth.

7. Detailed Products

Personal Current Accounts

A range of current accounts designed for personal use, offering features such as contactless payments, mobile banking, and online banking.

Business Current Accounts

Current accounts designed for businesses, offering features such as multiple user access, payment processing, and cash flow management.

Savings Accounts

A range of savings accounts offering competitive interest rates, flexible access, and online management.

Credit Cards

A range of credit cards offering competitive interest rates, rewards, and purchase protection.

Personal Loans

Unsecured personal loans offering competitive interest rates and flexible repayment terms.

Mortgages

A range of mortgage products offering competitive interest rates, flexible repayment terms, and expert advice.

Commercial Mortgages

Mortgage products designed for businesses, offering competitive interest rates and flexible repayment terms.

Insurance Products

A range of insurance products, including home, life, and travel insurance, offering competitive premiums and comprehensive cover.

8. Metro Bank PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

Metro Bank PLC operates in a highly competitive market, with many established banks and fintech companies offering similar services. However, the bank's focus on customer experience and convenience may help to differentiate it from competitors.

Bargaining Power Of Customers

Metro Bank PLC's customers have a high degree of bargaining power due to the ease of switching banks and the availability of alternative banking services. The bank's customer-centric approach may help to mitigate this risk.

Bargaining Power Of Suppliers

Metro Bank PLC's suppliers, such as technology providers and contractors, have limited bargaining power due to the bank's size and scale. The bank has a strong negotiating position in its supplier relationships.

Threat Of New Entrants

The threat of new entrants in the banking industry is moderate, as regulatory barriers and capital requirements can deter new entrants. However, fintech companies and digital banks may still pose a threat to Metro Bank PLC's market share.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Metro Bank PLC faces intense competition from traditional banks, fintech companies, and digital banks, which may impact its market share and profitability.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 81.38%
Debt Cost 8.88%
Equity Weight 18.62%
Equity Cost 14.57%
WACC 9.94%
Leverage 437.13%

11. Quality Control: Metro Bank PLC passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Ålandsbanken

A-Score: 6.4/10

Value: 3.1

Growth: 6.1

Quality: 4.9

Yield: 5.6

Momentum: 9.0

Volatility: 9.7

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BCJ

A-Score: 6.4/10

Value: 5.9

Growth: 6.3

Quality: 5.1

Yield: 5.0

Momentum: 8.5

Volatility: 7.3

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Metro Bank

A-Score: 5.0/10

Value: 9.2

Growth: 3.2

Quality: 6.9

Yield: 0.0

Momentum: 9.0

Volatility: 1.7

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A-Score: 4.9/10

Value: 7.0

Growth: 6.9

Quality: 4.8

Yield: 4.4

Momentum: 1.5

Volatility: 4.7

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BOS

A-Score: 4.7/10

Value: 9.3

Growth: 4.3

Quality: 6.2

Yield: 0.0

Momentum: 4.0

Volatility: 4.3

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A-Score: 3.2/10

Value: 2.9

Growth: 1.7

Quality: 7.4

Yield: 2.5

Momentum: 1.0

Volatility: 3.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.13$

Current Price

1.13$

Potential

-0.00%

Expected Cash-Flows