UK's Metro Bank posts higher first-half profit on stronger lending

Aug 4 (Reuters) - Britain's Metro Bank reported a 34% jump in first-half profit on Tuesday, underpinned by strong loan growth across its core business segments.

Here are some details:

• Metro Bank posted underlying pre-tax profit of £60.6 million ($81.3 million) for the six-month period ended June 30, compared with £45.1 million a year earlier.

• The lender, which employs more than 2,900 people, reaffirmed its outlook for 2026 and beyond, citing a record lending pipeline and treasury repricing that it expects will boost margins and returns in the second half.

• UK banks have benefited from elevated interest rates, which have supported interest income from their loan books. Borrowing costs remained relatively high through the first half due to geopolitical tensions and broader economic uncertainty.

• The Bank of England left interest rates unchanged last week, but a third policymaker backed a rate hike, further reinforcing expectations that borrowing costs could remain elevated for longer.

• Metro Bank has sought to capitalise on the higher-rate environment under CEO Dan Frumkin by shifting away from lower-margin retail lending and expanding into corporate, commercial, specialist mortgage and SME lending.

• The lender's turnaround strategy has focused on growing higher-return lending segments, which typically generate stronger margins than traditional retail lending.

• Since its 2023 rescue deal, Metro Bank has cut nearly 1,300 jobs and streamlined operations as it seeks to lower costs, strengthen returns and position itself for growth in higher-margin lending segments.

($1 = 0.7450 pounds)

(Reporting by Atharva Singh in Bengaluru; Editing by Sherry Jacob-Phillips)