Metro Bank reported a 41% increase in pre-tax profit to £60.7 million for the first half of 2026. This figure marks the highest profit in the company's history. The growth is attributed to a strategic shift into the small business lending sector. This strategy contrasts with the broader banking industry's trend of shutting down physical locations. Revenue for the period rose by 5% to £301 million. The significant growth in net interest income of 8% to £241.5 million is a major contributing factor.
Loan book and lending strategy
The bank's total loan portfolio expanded by 4% to £9.2 billion during the reporting period. This growth is driven by a 43% annual increase in core lending. Core lending includes small business loans, corporate loans, and specialist mortgages. It reached £6.2 billion. To concentrate its efforts on more profitable ventures, Metro sold its £584 million portfolio of unsecured personal loans. This was at the start of 2025. The move shifted its focus to sectors that offer better returns through higher interest rates.
Margins and regional expansion
Net interest margin, a crucial measure of banking profitability, reached 3.25%. This was by the conclusion of the second quarter of 2026. Metro Bank has set its sights on achieving a net interest margin of between 3.4% and 4%. The target is by December 2026. In addition to financial goals, the bank is actively pursuing regional growth. It signed new store leases in key northern cities such as Newcastle, Leeds, and Nottingham. This is to broaden its presence.
Return on equity and branch strategy
Metro Bank has reiterated its long-term target of achieving a return on tangible equity exceeding 13% by the end of 2026 and surpassing 18% by 2028. In a move that diverges from many of its competitors, Metro is not following the widespread trend of reducing physical branch numbers. Instead, the bank is expanding its physical footprint, bucking the industry's shift towards digital-focused services by adding new branches.