Metro Bank adds £1bn of business lending as commercial book jumps 30%

Metro Bank increased its commercial lending book by 30% year on year to £4.02bn after providing £1bn of new gross lending to corporate, commercial and SME customers during the first half of 2026.

Commercial balances rose from £3.08bn a year earlier and £3.57bn at the end of 2025. The figures exclude lending through the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and Recovery Loan Scheme.

The increase is the clearest evidence yet of Metro Bank’s effort to rotate its balance sheet towards higher-yielding business and specialist lending. Its combined target segments, comprising corporate, commercial and SME loans alongside specialist mortgages, expanded by 43% year on year to £6.18bn.

At the same time, legacy books designated for run-off fell by 34% to £3.03bn. Prime mortgage lending declined by 32%, government-backed lending by 45% and consumer lending by 47%. Metro Bank said new commercial growth continued to be partly offset by repayments and attrition, particularly in commercial real estate and portfolio buy-to-let.

The strategy helped the bank report underlying pre-tax profit of £61m, an increase of 34% and the most profitable half in its history. Underlying net interest income rose by 8% to £242m, while net interest margin increased to 3.18%, with the June exit margin reaching 3.25%.

Credit indicators were mixed but remained controlled. Cost of risk increased to 0.22% from 0.14% a year earlier, while arrears declined from 4.9% to 3.9% and non-performing loans fell from 5.42% to 4.39%. The expected credit-loss provision stood at £134m.

The funding side also moved towards business customers. SME deposits increased by 3% to £4.64bn and deposits from larger commercial customers rose by 19% to £2.33bn. Metro Bank’s loan-to-deposit ratio was 69%, and the bank said all customer lending remained funded by customer deposits.

The product breakdown of the £1bn in new lending was not disclosed, so it should not all be characterised as working-capital finance. Nevertheless, the figures show a material expansion in the bank’s capacity and appetite for UK business lending while lower-yielding assets are allowed to run off.