Metro Bank bets the house on lending pivot
New portfolio will need to grow quickly to avoid squeezing net interest margins, say experts
The UK’s Metro Bank is set to take a punt on earning sorely needed net interest income via a pivot away from residential mortgages to specialist mortgages and commercial lending, according to a strategic shift announced as part of a rescue package.
If the challenger bank is unable to build up the planned new portfolio, however, experts say its net interest income (NII) will come under pressure from the higher cost of liabilities and the potential sale of £3 billion of residential mortgages.
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