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Metro Bank has said it expects to return to profitability by the end of the year after heavy cost-cutting which saw the firm axe 1,000 jobs.
The high street lender saw shares rise in early trading after it reduced its losses for the past half-year.
The company reported an underlying pre-tax loss of £26.8 million for the six months to June, improving from a £33 million loss a year earlier.
The news came after Metro Bank launched a series of heavy cutbacks earlier this year, including shedding about 1,000 jobs.
Bosses said the job cuts were completed by early May, in a move which impacted more than a fifth of its workforce.
The group also stopped opening its high street stores seven-days-a-week and stressed that it had seen very few complaints from customers over the change.
Metro Bank said the moves are on track to save the business £80 million by the end of 2024 as part of its turnaround efforts.
The company has been seeking to improve its performance shareholders approved a funding package last November worth £925 million to secure its future on 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.
The lender, which remained listed on the London Stock Exchange, said on Wednesday that it saw net loans dip 6% to £11.5 billion over the past half-year, amid a shift towards higher yielding commercial and SME lending.
It upgraded its profit forecasts as a result, indicating its will return to profitability in the final quarter of the year.
Metro Bank also revealed that it has started construction on a new site in Chester and signed a lease in Gateshead, with plans to grow further in the North and East Midlands.
Daniel Frumkin, chief executive officer of Metro Bank, said: “Metro Bank has made significant underlying progress during the first half of 2024.
“We have built real momentum in credit approved pipelines across commercial, corporate and SME lending, whilst expanding spreads in retail mortgages and repricing deposits.
“At the same time, our continued cost discipline is creating a simpler, more agile bank that is fit for the future.”
Robert Sage at Peel Hunt said the outlook for the company has “been transformed” following the positive update.
Shares were 30% higher on Wednesday afternoon as a result.