Metro Bank sells £584m personal loan book amid shift to specialist lending

Metro Bank has agreed the sale of a £584 million portfolio of personal loans as it continues to focus efforts on specialist lending.

The high street bank said the sale of the unsecured loans – to an undisclosed buyer – will result in a gain of about £11 million.

It said the deal will give it extra lending capacity in the areas it is focusing on – commercial, corporate, small business lending and specialist mortgages.

The deal comes ahead of the bank’s full-year results on Thursday.

Chief executive Daniel Frumkin said: “The sale of our unsecured personal loan book is in line with our strategy and positions Metro Bank strongly for future growth.

“Upon completion, the transaction is capital accretive and will allow us to further optimise our balance sheet as we strengthen our position as a specialist lender of choice.”

The sale of the loans, which have an average remaining term of around 2.4 years, leaves Metro Bank with a minimal remaining unsecured personal loan book.

It has not offered new personal and unsecured lending since the end of 2023 as part of its shift towards specialist lending.

Metro Bank has about three million customers in the UK and earlier this year announced a round of heavy cost-cutting which saw it axe 1,000 jobs.

The group also stopped opening its high street stores seven days a week.

The moves were part of efforts to save £80 million by the end of 2024 amid its ongoing turnaround.

The company has been seeking to improve its performance after shareholders approved a funding package in late 2023 worth £925 million to secure its future in Britain’s high streets.

Shareholders gave the green light to a capital fundraise which saw Colombian billionaire Jaime Gilinski Bacal become a majority shareholder in the group with a 53% stake, but Metro Bank remains listed on the London Stock Exchange.