Metro Bank share price: 4 things to watch out for in its Q3 earnings

Metro Bank will release its Q3 earnings on Wednesday, with investors hoping the challenger bank can deliver a set of results that will halt its declining share price.

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Challenging year so far for Metro Bank

It has been a challenging year for Metro Bank, with the lender facing intense speculation over the health of its balance sheet earlier this year due to a £900 million accounting error.

However, investors’ concerns likely diminished somewhat after the bank successfully raised £375 million via a share placing in mid-May.

Metro Bank had originally only planned to raise £350 million from the fundraising but increased the final amount after receiving significant interest from investors.

Fears over Metro Bank’s financial health sparked a wave of deposit outflows earlier this year, prompting its share price to take a major tumble.

The stock has lost more than 88% of its value since the beginning of January, with the Metro Bank’s share price closing at trading at 193p as of 15:00 GMT on Monday, down from the £17 levels it saw at the start of the year.

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A transitional year for Metro Bank

Metro Bank’s total deposits sit at £13.7 billion, down 13% from 31 December 2018, driven by a limited number of commercial customers withdrawing deposits during intense speculation in February and May.

Despite the pressure the bank finds itself under, its management contends that 2019 is a ‘year of transition’, with the lender focused on upgrading its cost savings guidance to the upper end of its original range and rebalancing its lending mix.

This year also saw the resignation of the bank’s controversial Chairman and Co-Founder Vernon Hill, who will leave his post at the end of the year.

Metro Bank remains focused on cutting costs

The bank is likely looking to put the first half of 2019 far behind it and instead focus on delivering costs efficiencies and continued growth in capital-light fee income.

Investors will be eager for an update how successful it has been in reducing expenditure.

Metro Bank expands presence in the North of England

The bank is also busily expanding its presence in the North of England in the hopes of empowering growth for SMEs in cities like Manchester, Liverpool and Birmingham. Metro Bank plans to open around 10 new branches in 2019.