Annual Report

and Accounts

2024

This is

Relationship Banking

Welcome

Strategic report

1 Summary of the year

2 Our purpose and strategy framework

4 Chair’s statement

6 Operating environment

8 Chief Executive Officer’s statement

10 Business model

14 Key performance indicators

16 Financial review

19 Environmental, social and governance review

28 Non-financial information and

sustainability information statement

31 Section 172 statement

32 Task Force on Climate-related

Financial Disclosures

42 Risk overview summary

46 Viability statement

Governance

49 Corporate governance introduction

50 Board of Directors

52 2024 governance at a glance

54 Board activities and stakeholder engagement

56 Stakeholder engagement

59 Letter from the Designated Non-Executive

Director for Colleague Engagement

61 Board leadership and company purpose

63 Board roles and responsibilities

64 Board effectiveness

66 Group Audit Committee report

71 Group Risk Oversight Committee report

74 Group Nomination Committee report

78 Group People and Remuneration Committee

report

82 Remuneration at a glance

87 Remuneration for colleagues

below Board level

90 Remuneration Policy

103 Annual report on remuneration

118 Directors’ report

Risk

122 Risk management framework

123 Risk governance and oversight

125 Financial risks

144 Non-financial risks

Financial statements

152 Independent Auditors’ report

to the members

of Metro Bank Holdings PLC

161 Consolidated statement of

comprehensive income

162 Consolidated balance sheet

163 Consolidated statement

of changes in equity

164 Consolidated cash flow statement

165 Notes to the financial statements

212 Company balance sheet

213 Company statement

of changes in equity

214 Company cash flow statement

215 Notes to the financial statements

Additional information

220 Country-by-country report

221 Independent Auditors’

report to the Directors of

Metro Bank Holdings PLC

223 Other disclosures

224 Alternative performance measures

229 Abbreviations

230 Shareholder information

Evolution

2024 has been a year of evolution as we have pivoted our

strategy towards corporate, commercial and SME lending, and

specialist mortgages.

Focused on growth

We remain focused on achieving sustainable profitability and

creating value for all our shareholders. We will continue to deliver

on our strategy, building relationships and becoming the specialist

lender of choice.

Read more in the Chief Executive

Officer’s statement on page 8

Metro Bank continues

to make strong progress.

We’re creating a simpler,

more agile and

digitally enabled

bank for the future.

Daniel Frumkin

Chief Executive Officer

Statutory (loss)/profit before tax

(£m)

Loan-to-deposit ratio

(%)

Net interest margin

(%)

Deposits

(£b)

Underlying loss before tax

(£m)

Loans and advances

(£b)

Summary of the year

2024 has been a year of transformation with the Bank returning to underlying

profitability in H2, ahead of guidance, thanks to our continued emphasis on cost

discipline and balance sheet management. We have positive momentum moving

forwards, with a strong pipeline supporting our pivot towards higher yielding

corporate, commercial and SME lending, and specialist mortgages – areas where

our established relationship banking model positions us to win and create new FANS.

Who we are

We opened our doors in the summer of 2010 and

were the first high street bank to open in the UK in

over 100 years. Since then, we’ve built a business that

is providing meaningful competition against larger

incumbents and offering a compelling alternative for

small business and commercial customers.

Our approach

Our approach is centred on our colleagues and

building relationships with our customers and

communities. Whether through our network of

75 stores, on the phone through our UK-based

contact centres, or online through our internet

banking or award-winning mobile app, we offer

our FANS a real choice. Our established relationship

banking model and focus on our localness informs

everything we do and the decisions we make.

In-store service for

business and personal

customers

3.0m

Customer accounts

1. Competition and Markets Authority (CMA) survey carried out in Great Britain by Ipsos and BVA-BDRC

between January 2024 and December 2024 – Services in branches. Results at ipsos.com and bva-bdrc.com

021

020

024

023

022

(212.1)

(311.4)

(245.1)

(70.7)

30.5

021

020

024

023

022

021

020

024

023

022

1.22

1.40

1.92

1.98

1.91

021

020

024

023

022

(271.8)

(171.3)

(50.6)

(16.9)

(14.0)

021

020

024

023

022

16.1

16.4

16.0

15.6

14.5

021

020

024

023

022

9.0

12.1

12.3

13.1

12.3

Metro Bank Holdings PLC Annual Report and Accounts 2024

1Additional informationFinancial statementsStrategic report Risk reportGovernance

Our purpose and strategy framework

At Metro Bank,

we have always

been proud to do

things our way.

In an age where banking has become less

personal and increasingly faceless, we have

always stood for something different, and

today, it’s that difference that defines the next

chapter in our story. Our reason for being, why

you and our customers choose us, is because

of our people.

We exist to empower our customers and

communities and we do so with a human

approach to banking, whether face to face,

over the phone or through our digital channels.

We strive to make life easier for our customers

by providing exceptional service every time. It’s

at the heart of what we do and why we are the

‘relationship banking specialists’.

Our AMAZEING behaviours strengthen

everything we do and are ingrained throughout

our organisation helping us drive our relationship

banking approach:

• Attend to every detail

• Make every wrong right

• Ask if you’re not sure – bump it up

• Zest is contagious – share it

• Exceed expectations

• Inspire to create FANS

• Nurture for growth

• Game change, because we’re a different

kind of bank.

Our purpose is to empower customers and

communities with a human approach to banking.

Through delivering exceptional customer

service, we turn customers into FANS, who

champion us through actively recommending

us to friends and family.

Our core principles define, guide, and inspire

what we do and the experiences we create.

This simple purpose guides everything we do as

it places the customer and our communities at

the heart of all of our decision-making.

1. It’s achieved through our purpose

2. Strengthened by our AMAZEING behaviours

Metro Bank Holdings PLC Annual Report and Accounts 2024

3. Delivered via our business model 4. Supported by our strategic priorities

5. Measured by our key performance indicators 6. Aligned with performance based remuneration

Our purpose and strategy framework continued

Our strategic priorities are our day-to-day focus, and are crucial to delivering our long-term success.

Our key performance indicators (KPIs) are the metrics we monitor to check we are on track

with the delivery of our strategy as well as to assess how our business model is performing.

These consist of:

• customer accounts

• colleague engagement

• net promoter score

• senior leadership diversity

• statutory profit/(loss)

• underlying profit/(loss)

• total capital plus MREL

• cost of deposits

• cost of risk

• statutory cost:income ratio

• return on tangible equity

• loan-to-deposit ratio

• total shareholder return.

Our approach to remuneration for management is based on a simple and clear scorecard in

addition to a Long Term Incentive Plan (LTIP) and a Shareholder Value Alignment Plan (SVAP).

Scorecard measures are aligned to the four components of our business model with the LTIP

and SVAP based upon the successful generation of sustainable long-term value and tangible

book growth.

Read more about our

remuneration on pages 78 to 117

Cost

Cost discipline to support

profitable growth and

reinvestment.

Balance sheet optimisation

Continued focus on

risk-adjusted returns.

Revenue

Create FANS to deliver

strong growth.

Infrastructure

Protect value through safe,

scalable infrastructure.

Communication

Engage colleagues,

communities and other

stakeholders to tell our story.

Our business model is how we create sustainable long-term value for our stakeholders. It involves

combining stores and digital channels with exceptional customer service to generate tangible

book growth.

Integrated model

Our model combines delivery through physical

and digital channels.

Unique culture

Our colleagues deliver superior service and are

the heart of our relationship banking approach.

Service-led core deposits

We attract core deposits through our service-

led relationship banking model with specific

emphasis on our core retail and SME/

commercial franchise.

Risk-adjusted returns

We are balancing our lending mix through a

broad yet simple product offering that is priced

proportionate to risk.

Metro Bank Holdings PLC Annual Report and Accounts 2024

3Additional informationFinancial statementsStrategic report Risk reportGovernance

Chair’s statement

Dear shareholder

2024 was a year of transformation for the Bank.

The first half of the year saw the Bank plan and

articulate a strategic pivot to prioritise and grow in

higher yielding commercial and specialist lending. As

a relationship bank with a distinct and valued service

proposition, we believe there is great potential to

better serve this market and that we are ideally

positioned to deliver. In the second half of the year,

we have made significant progress in the delivery

of our strategy. We have returned to underlying

profitability, reported financial results ahead of

guidance and carry real momentum into 2025.

To execute our strategy effectively, we have had to

make some hard decisions, in particular around our

cost model and taking measures that will allow us

to invest more in future growth. Some of these

decisions included reducing our store hours and

making more than 1,000 colleagues redundant

across our stores and the wider business.

Alongside the cost savings, we also made

additional investments to improve our service to

continue to provide market-leading services for our

customers. For example, we have invested in the

automation of services, improving our productivity

and our response to customer needs.

We have also invested in a strategic collaboration

with Infosys, announced in October 2024, which

further demonstrates our commitment to

long-term investment in digital experience for

our customers.

In a year of significant change and transformation,

our colleagues’ dedication to our customers has

remained a constant inspiration for the Board.

On behalf of the Board, I remain immensely

grateful for the continued trust and support from

our shareholders, bondholders, regulators,

customers and colleagues.

Results

The operating environment remained challenging

throughout 2024. Despite the economic

headwinds, Daniel Frumkin, Chief Executive Officer

(CEO) and his executive team have successfully

delivered a fundamental transformation of the

Bank. Business performance has improved from an

H1 underlying loss of £27 million to an H2

underlying profit of £13 million, establishing

momentum that we anticipate will continue into

2025 to meet our objective of returning the Bank to

sustainable profitability.

2024 also saw the Bank return to the FTSE 250 and

receive the first credit rating upgrade in its history.

Both are important steps in the Bank’s turnaround.

The market reaction to our progress has been

positive, with the share price closing on 31

December at £0.94, up 155% year-on-year. As the

Bank delivers on its strategic pivot, our priority is to

help grow shareholder returns.

2024 was a year of successful

transformation, which saw the

Bank return to underlying

profitability through strong

cost management and pivoting

towards higher yielding

commercial and specialist

lending. Relationship Banking is

at the heart of what we do and

has underpinned the strong

momentum delivered in 2024.

I remain immensely grateful for the continued trust

and support from our shareholders, bondholders,

customers and colleagues.

Robert Sharpe

Chair

Metro Bank Holdings PLC Annual Report and Accounts 2024

Regulatory and Compliance

I am pleased that the FCA has concluded its

enquiries into a legacy issue relating to transaction

monitoring systems and controls that began in

2016 and were remediated by 2020. The

conclusion of these enquiries draws a line under

this and all other outstanding legacy issues,

allowing the Bank to entirely focus on the future,

building on the solid foundations it has already laid.

Governance

In 2024, the Bank added four highly experienced

directors to the Board with the appointments of

Marc Page, Paul Coby, Cristina Alba Ochoa and

Jaime Gilinski Bacal. Marc joined the Bank as CFO

in September, bringing with him more than 20

years of financial experience, and has already

made a positive contribution to the Board and

Executive team. Cristina, following her strong

contribution as interim CFO, was appointed as a

shareholder-nominated Non-Executive Director in

October. Jaime, who is a major shareholder of the

Bank through his Spaldy Investments Limited

vehicle, joined the Board as a shareholder-

nominated Non-Executive Director in September.

Chair’s statement continued

Stakeholder impact

We focus on the impact on our stakeholders

in all the decisions we make. Delivering the

right outcomes to stakeholders is

fundamental to empowering customers and

communities in line with our human

approach to banking.

Stakeholder engagement

The Board engaged with a range of

stakeholders throughout 2024 and looks

forward to further engagement throughout

2025 including meeting shareholders at our

AGM which will take place on 20 May 2025.

Read more in the Chair’s Corporate

Governance Introduction on page 49 and in

our Section 172 Statement on page 31

Where to find out more

How governance

is supporting our

transformation

In December, we were joined by Paul as a Non-

Executive Director, adding a wealth of FTSE 100

executive and board technology experience which

will be important as the Bank grows and develops

its offering.

Outlook

The road ahead for the UK economy is not without

uncertainty. Despite expectations of UK growth in

2025, renewed challenges from a higher pace of

inflation, increased trade frictions, and a

heightened state of economic and geopolitical

uncertainty are likely.

Notwithstanding these macro challenges, I remain

confident in our ability to deliver for our customers.

The Bank’s resilience and ability to navigate

obstacles, as well as seize new opportunities,

remains one of its great strengths and will support

delivery of our 2025 objectives.

We will continue to champion customer service

and traditional banking values of trust, honesty and

integrity, delivering excellence in our products and

services and nurturing the relationships we value.

Finally, I would like to extend my sincere thanks to

colleagues past and present, as well as the Board

and Executive team for all their hard work and

contribution.

We have more to do in 2025 to get the Bank to

where we all want it to be, but I look forward to the

year ahead with confidence and optimism.

Robert Sharpe

Chair

22 April 2025

Metro Bank Holdings PLC Annual Report and Accounts 2024

5Additional informationFinancial statementsStrategic report Risk reportGovernance

Operating environment

The environment we operate in is both competitive and rapidly changing.

This presents us with challenges but also creates exciting opportunities for us as we grow.

How we see it

The macroeconomic outlook has stabilised in 2024, with the UK economy

continuing to be remarkably resilient. Inflation has levelled off at close to

the 2% target thanks to earlier falls in energy prices. As a result of this

inflation softening, the Bank of England has started reducing base rates.

Whilst the outlook is that rates will continue to come down, this will be at

a slower pace, and will continue to impact customers in the years ahead

as they roll-off lower-cost fixed-rate borrowing. Although this has

resulted in an increase in arrears, this has come off a low base. The fiscal

expansion announced in the budget will drive a renewed acceleration

next year as stronger government consumption and investment feed

through.

How we are responding

Supported by a stable-to-improving macroeconomic outlook and decline

in inflation, expected credit loss (ECL) has remained at an adequate level

having declined over the course of the year, partially offset by run-off

of the personal loan and credit card portfolios and limited arrears,

and defaults in the retail mortgage portfolio. In addition, Post Model

Adjustments (PMAs) are also being held to reflect economic uncertainty

not fully captured in the IFRS9 models as well as the Moody’s macro-

economic outlook.

In Q3 2024, we took the decision to move away from unsecured retail

credit card lending given the return on capital it is providing in the

current economic climate.

The road ahead for the UK economy is not without uncertainty. Despite

expectations of UK growth in 2025, renewed challenges from a higher

pace of inflation, increased trade frictions, and a heightened state of

economic and geopolitical uncertainty are likely. Notwithstanding these

macro challenges, we remain confident in our ability to deliver for our

customers. The Bank’s resilience and ability to navigate obstacles, as well

as seize new opportunities, remains one of its great strengths and will

support delivery of its 2025 objectives.

How we see it

The UK banking market remains highly competitive in respect of both

deposits and lending.

For core current accounts, digital-only operators are achieving high

levels of customer satisfaction whilst incumbent players continue to

deploy switching offers to defend market share. At the same time,

average current account balances are stabilising industry-wide as the

UK economy exits the worst of the recent inflationary cycle and base rate

begins to decline.

In the lending market, whilst larger incumbents continue to price

mortgages below base rate, we are seeing Net Interest Margin (NIM),

Cost of Funding (CoF), and swap rate pressures impact market pricing.

Specialist lenders have also had to respond to this, which has resulted

in reduced volumes for some market leaders as they seek to protect and

grow NIM in an interest rate environment that is expected to remain

higher for longer than previously thought.

We have also started to see the early signs of consolidation within the

industry, which is likely to see market share concentrated further

between larger incumbents.

How we are responding

We are focusing our investment in current accounts, and supporting

capabilities, for our corporate, commercial and SME customers where

we see our relationship-first proposition differentiating ourselves from

our peers. We continue to win new corporate, commercial and SME

current accounts and average balances have stabilised following the

market-wide shifts of 2022 and 2023.

In the lending space, we are focusing our attention on targeting specialist

sub-segments of the market which offer relative scale at attractive risk

adjusted returns. We believe our target operating model, distribution

and lower CoF relative to leading specialists provides a competitive

advantage as opposed to continuing to compete within the vanilla/

Advanced Internal Rating-Based (AIRB) space, where structural

disadvantages in the capital treatment of residential mortgages

compared to larger AIRB-approved competitors persist.

How we see it

Customer behaviour in 2024 has been marked by the decline in base

rate and reduction in inflation and cost-of-living pressures. This has seen

customers stabilise the balances they hold in current accounts relative

to expenditure and saving. The higher base rate environment, with

associated higher savings rates, means the savings market remains

highly competitive with ongoing switching behaviours. We have also

seen customers making greater use of ISAs as a tax shield, particularly

amongst savers with high balances where interest payments exceed

the personal savings allowance.

We are witnessing the acceleration of digitisation with customers

continuing to prefer digital-first channels. This rise in use of new

technology also gives rise to increasingly sophisticated fraud.

How we are responding

In 2024 we have been optimising our deposit base, and associated cost,

reflecting the sale of a portfolio of mortgage assets and prudent

reduction in excess liquidity held as cash. We continue to invest in current

accounts, and supporting capabilities, for our corporate, commercial and

SME customers where we see our relationship-first proposition

differentiating ourselves from our peers.

We expect the current digitisation trend to continue, and we will make

disciplined investment choices in response including capabilities to

minimise the risk of fraud and financial crime.

We remain committed to stores and maintaining a fully integrated offering.

Economic and

political outlook

Competition Customer

behaviour

Metro Bank Holdings PLC Annual Report and Accounts 2024

How we see it

The UK regulatory environment has undergone significant changes

in recent years and continues to evolve, with further changes on the

horizon from key regulatory bodies.

Regulatory authorities including the Prudential Regulation Authority (PRA),

and Financial Conduct Authority (FCA) have introduced reforms aimed at

enhancing financial stability, consumer protection and market integrity.

Key regulatory initiatives have included the new Consumer Duty

requirements and Basel 3.1 which sees changes to the industry’s capital

requirements.

We are also continuing to see regulators take a firm approach to

misconduct and ensuring fair outcomes for customers.

How we are responding

We are delivering on a range of comprehensive projects to ensure we

remain compliant with changes to the regulatory environment. We are

preparing for the introduction of Basel 3.1, the finalisation of the PRA’s

Consultation Paper 9/24 on streamlining the Pillar 2A capital framework

and the capital communications process, and the Bank of England’s

Consultation Paper on amendments to the MREL regime.

We proactively engage with our regulators, industry bodies and other

stakeholders to help shape the regulatory agenda, provide feedback

on proposed reforms and continue to advocate for proportionate

and pragmatic regulations that support both innovation and growth,

whilst protecting the integrity of the financial system.

How we see it

The UK’s stringent approach to capital management continues to shape

the banking industry. This is particularly true for new and mid-sized

challengers like us who remain subject to MREL requirements

but unable to leverage the structural advantages of larger players able to

benefit from their AIRB status for determining risk-weightings. This

makes providing the required return on capital challenging, particularly in

mainstream lending, which would benefit from additional competition.

With respect to funding, the Bank of England’s continued planned

withdrawal of TFSME

(combined with additional quantitative tightening)

will put additional pressure on banks’ funding requirements, with firms

needing to either shrink balance sheets or increase their deposits to

replace this form of funding. Liquidity will remain a core focus for banks

going into 2025, with firms likely to continue to hold excess liquidity over

minimum requirements.

How we are responding

The successful sale of the £2.5 billion portfolio of prime residential

mortgage in Q3 2024 was earnings, NIM and capital ratio accretive, and

the sale proceeds were used for the early repayment of TFSME

in Q4

2024. The £584 million unsecured personal loan portfolio sale

announced post period-end is capital accretive. Both portfolio sales

create additional lending capacity to enable the Bank to continue its asset

rotation towards higher yielding assets.

The cost of capital remains high, both industry-wide and for us in

particular. We are therefore continuing to ensure we optimise our return

on regulatory capital when determining our product and pricing strategy.

Equally, we are working to ensure we are right-sizing our cost base to aid

in the delivery of sustainable organic capital generation.

Following the successful deposit campaign launched in Q4 2023, the

Bank has been actively managing down expensive tactical deposits to

optimise cost of deposits. Cost of deposits at year end was 1.40%, down

from a peak of 2.29% in February 2024. We retain high levels of liquidity

with a liquidity coverage ratio (LCR) as at 31 December 2024 of 337%

(compared to the minimum requirement of 100%). Our strong levels of

liquidity provide further opportunity to continue to optimise our deposits

and funding position.

1. Bank of England Term Funding Scheme with additional incentives for SMEs.

How we see it

2024 was the hottest year on record globally and we are seeing the

impacts of climate change both around the world and in the UK.

As awareness of the risks and opportunities around sustainability grows,

stakeholders are increasingly scrutinising companies’ responses to these

sustainability factors. Customers expect the companies they interact

with to operate and grow in a sustainable manner and are taking these

considerations into account when making purchasing decisions.

As well as our own decisions around sustainability within our operations,

we recognise the role we play in broader society, primarily through the

decisions over who and what we choose to finance and the suppliers we

chose to work with. The financial system has a central role in acting as a

catalyst for change in broader society and as such can play a significant

role in contributing to the transition to a more sustainable and resilient

economy.

How we are responding

We recognise the interconnectedness between sustainable business

practices and long-term financial performance and as a result continue

to integrate sustainability into all of our core operations and decision-

making processes.

We remain on track to deliver on our pledge to achieve net zero carbon

emissions across Scope 1 and 2 emissions by 2030 and continue to make

progress with mitigating our wider Scope 3 emissions. In achieving this,

we remain committed to being transparent in respect of our reporting

of progress to delivering this.

We also recognise the importance of giving back to society and this will

continue to be achieved through a range of initiatives which utilise our

physical and digital channels.

Our corporate governance structure ensures that sustainability remains

a key focus as part of our ambition to empower colleagues and

communities with a human approach to banking.

Regulatory

environment

Capital and

funding regime

Focus on

sustainability

Operating environment continued

Metro Bank Holdings PLC Annual Report and Accounts 2024

7Additional informationFinancial statementsStrategic report Risk reportGovernance

CEO’s statement/FY 2024 business review

We have made significant progress in creating

a simpler, more agile bank and continued, at pace,

the strategic shift towards corporate, commercial

and SME lending, and specialist mortgages –

a compelling opportunity in an underserved area

of the market.

We have delivered on an ambitious transformation,

delivering £80 million annualised run rate cost

savings in FY 2024- primarily from reducing

on-shore headcount numbers by more than 30%

from 4,458 to 2,972. These cost savings helped

offset headwinds and created capacity for

investment to support future growth.

In Q4 2024, we announced a new partnership with

Infosys, a world leader in strategic outsourcing,

to enhance digital capabilities, improve automation,

and embed further AI capabilities .

We continued to optimise the balance sheet,

including a £2.5 billion sale of prime residential

mortgages in Q3 2024 and a £584 million sale

of unsecured personal loans announced post

year-end. Both transactions are in line with the

Bank’s strategy to reposition its balance sheet,

actively manage the asset rotation and enhance

risk-adjusted returns on capital. The transactions

create additional lending capacity to enable the

Bank to continue its shift towards higher yielding

corporate, commercial and SME lending,

and specialist mortgages.

We delivered strong growth momentum

supporting our strategy, with corporate,

commercial, and SME gross new lending growing

by 71% year-on-year. Effective asset rotation has

also allowed us to actively manage down excess

liquidity, particularly expensive fixed-term deposits,

resulting in a significant reduction in cost of

deposits throughout the year. Underlying

momentum in the franchise remains strong, with

110,000 new personal and 36,000 new business

current accounts opened in the year.

Successful operational execution has resulted

in the Bank outperforming the 2024 guidance

and reconfirming all guidance previously

provided at half-year results, building to best-in-

class performance:

• Underlying profit of £13 million in H2’24, beating

guidance of profitability during the 4th quarter

• Net interest margin at year-end was 2.65%,

beating guidance of 2.50%

• Cost savings delivered

• RoTE guidance reconfirmed to mid to upper

single digit in 2025, double digit in 2026

and mid to upper teens thereafter

• Continued NIM expansion driven by asset

rotation and cost of deposits, with 2025

exit run-rate expected to be between

3.00% – 3.25%, 3.75% – 4.00% in 2026

and 4.00 – 4.50% in 2027, respectively

• Continued cost discipline and control, guiding to

a 4-5% year-on-year reduction in costs for 2025.

Cost to income ratio improves to be between

75% – 70% in 2026, 65% – 60% in 2027

and 55% – 50% in 2028.

2024 has been a

transformational year

for Metro Bank.

It has been a transformational year for Metro Bank as we made

substantial progress against our strategy, ending the period ahead

of guidance, profitable, and with strong momentum going forward.

Delivery in 2024 provides strong growth

momentum and proves the Bank’s ability to deliver

on an ambitious future strategy. By 2027, we remain

committed to generating one of the best returns

on tangible equity of any UK High Street bank.

Progress on strategic priorities

Revenue

As part of our strategic shift, corporate,

commercial and SME lending, and specialist

mortgages in the year. Corporate, commercial and

SME gross new lending grew by 71% year-on-year,

and we ended 2024 with a credit approved pipeline

which was two times larger than at the start of

2024. 78% of new corporate and commercial

lending was non-broker led, and c.30% of this

came from refinancing existing customers. On

average, new originations attracted a margin in

excess of 350 bps over base rate, driving year-on-

year improvements in yield. Progress in specialist

mortgage originations was strong, with the launch

of new propositions helping to drive a significant

increase in spread over swaps on new mortgage

originations. New lending, together with attrition of

legacy portfolios at lower yields, has led to a 61 bps

year-on-year improvement in overall lending yield.

Daniel Frumkin

Chief Executive Officer

Metro Bank Holdings PLC Annual Report and Accounts 2024

1. Bank of England Term Funding Scheme with additional

incentives for SMEs.

CEO’s statement/FY 2024 business review continued

Following our successful deposit campaign at the

end of 2023, we have observed a subsequent

decline in balances as we optimise our deposits and

cost of funding. The cost of deposits at year-end of

1.40% continues to fall, down from a peak of 2.29%

in February 2024, as more expensive fixed term

deposits are allowed to attrite.

The combined impact of increased lending yields

and a lower cost of deposits has resulted in an exit

NIM of 2.65%, ahead of guidance of 2.50%, and up

1.13% from nadir of 1.52% in February 2024.

Cost

Over the past year, we have fundamentally

transformed our cost base, reducing operating

costs in line with a bank of our size and driving

towards sustained profitability. We continue to

take a disciplined approach to cost management,

with underlying costs down YoY by 4%, despite

inflationary pressures. We have delivered £80 million

of annualised run rate cost savings in FY 2024, after

reducing on-shore headcount numbers by more

than 30% from 4,458 to 2,972 within 12 months.

We fundamentally repositioned our store and call

centre propositions in line with customer usage

patterns, and enhanced cost control frameworks.

We have driven efficiencies across the business.

The Bank established a strong strategic partnership

with Infosys to enhance digital capabilities, improve

automation, refine data, and embed further AI

capabilities . This collaboration has helped make

the Bank model more scalable.

Infrastructure

To drive our next stage of growth, we have

strategically invested in platforms and capabilities.

Central to this is a collaboration with Infosys which

will revolutionise our digital capabilities, including

actionable data analytics, automated processes,

and compelling digital platforms.

Our redesigned store offering empowers

colleagues to drive growth in the SME and

commercial segments, whilst also driving efficiency

and improving customer experience. Our store

openings in the North of England are on track, with

new stores planned for Chester, Gateshead and

Salford in Q2 2025. Back-end processes,

particularly around lending and digital customer

onboarding, have also improved key customer

interactions. We have also built a range of new

products and platforms, such as online chat and an

enhanced business overdraft via mobile app which

will enable customers to engage with us any way

they want. We have implemented over 450

technical changes to systems, products and

infrastructure – even more than last year – along

with upgrading our fraud tools, and our new first

line risk function.

The Bank also resolved the FCA’s enquiries into

transaction monitoring systems and controls that

began in 2016 and were remediated by 2020.

The conclusion of these enquiries draws a line

under this legacy issue, allowing the Bank to

move forward and fully focus on the future,

building on the solid foundations it has already laid.

Balance sheet optimisation

We have made significant progress in restructuring

our balance sheet to align with strategic growth

opportunities, including a £2.5 billion sale of prime

residential mortgages in Q3 2024 and a £584 million

sale of unsecured personal loans post year-end. The

mortgage sale proceeds were used to repay TFSME

providing further opportunity to continue optimising

our funding capabilities. Both transactions are in line

with the Bank’s strategy to reposition its balance

sheet, actively manage the asset rotation and

enhance risk-adjusted returns on capital.

Following the successful deposit campaign in Q4

2023, we have worked to reduce our cost of funds

and excess liquidity. Overall, customer deposits

reduced by 7% at 31 December 2024 to £14.5 billion,

down £2.0 billion from the February 2024 peak of

£16.5 billion (31 December 2023: £15.6 billion)

reflecting the deliberate focus on reducing excess

liquidity and cost of deposits. The core deposit base

continues to be predominantly retail and SME. Higher

cost fixed-term deposits have reduced by 46%

year-on-year as deposits from the successful Q4

2023 deposit campaign have started to mature and

are being allowed to attrite.

Communications

We continue to focus on engaging our colleagues,

communities and other stakeholders. Our focus

on delivering excellent customer service is

reflected in the latest independent Competition

and Markets Authority survey where we ranked

number two for in-store service quality for retail

customers, up from third place in August 2024. We

were also placed second for service quality, both in

stores and in our business service centres. We

remain committed to maintaining a physical

presence and ensuring that stores remain both

accessible and at the heart of local communities.

We will be opening three new stores in 2025 in

Chester, Gateshead and Salford.

Following a year of transformation, we are a leaner

organisation, and as part of our continuous

improvement, we will keep creating an

environment where colleagues can grow, thrive

and be their true authentic selves. We continue

to focus on our culture of promoting from within,

with over 55% of the open positions in the year

filled from our existing Metro Bank team. Given our

strategic focus on corporate, commercial and SME

lending, and specialist mortgages, we have hired

additional colleagues into corporate and

commercial relationship and credit teams to drive

our next stage of growth.

Our partnership with the England and Wales

Cricket Board went from strength to strength, as

we continue to be committed to growing Women’s

and Girls’ Cricket. We launched Metro Bank Girls

in Cricket Fund contributing in one year to a 21%

increase in the number of girls’ teams. We also

launched our ‘Relationship Banking specialists’

brand positioning to ensure we are uniquely

positioned to serve our corporate, commercial

and SME customers.

Capital

Our capital position continues to strengthen,

with the Bank’s MREL ratio 23.0% as at

31 December 2024, up 100bps year-on-year

from 22.0% as at 31 December 2023, reflecting

the mortgage sale and ongoing focus on capital

management whilst optimising risk-adjusted

returns on regulatory capital.

Post year-end, we announced completion of a

£584m personal unsecured loan portfolio sale,

resulting in a 31 December 2024 improvement in

total capital plus MREL ratio from 23.0% (reported)

to 24.5% and CET1 ratio from 12.5% (reported) to

13.4%.

We also completed our inaugural £250 million,

13.875% fixed rate reset perpetual subordinated

contingent convertible capital securities (AT1) raise

in Q1 2025. The successful issuance resulted in a

further 31 December 2024 pro forma improvement

in Tier 1 capital ratio from 13.4% (post loan sale) to

17.5%.

Both transactions were in line with the Bank’s

capital management framework and strategy and

were aimed at optimising the capital structure and

providing further flexibility for growth.

Looking ahead

2024 has been a pivotal year for the Bank. We

outperformed market guidance and delivered an

ambitious transformation plan. However, we know

there is more to be done if we are to realise our

ambition of generating one of the best returns on

tangible equity of any UK High Street bank by 2027.

As we move into 2025, we are focused on continuing

to grow higher-yielding corporate, commercial and

SME, and specialist mortgages, whilst optimising

deposits to lower cost of funds and grow revenue.

All while maintaining a focus on cost discipline,

and a prudent approach to credit risk. With a robust

capital base, a growing customer base, and a clear

path for future growth, the Bank is well-positioned

to capitalise on the opportunities ahead.

Daniel Frumkin

Chief Executive Officer

22 April 2025

Metro Bank Holdings PLC Annual Report and Accounts 2024

9Additional informationFinancial statementsStrategic report Risk reportGovernance

is underpinned by... Our model

Business model

Environmental and

social priorities

We ensure that our business model and

approach is focused on the areas that

matter most to our stakeholders.

Read more on pages 11 to 13

Customers

Without the loyalty of our customers we

would not exist. Turning our customers into FANS

ensures the enduring success of our business.

Colleagues

We strive to make Metro Bank a great place

to work, where colleagues can excel, grow

and be themselves.

Investors

We are committed to being an attractive

investment for equity and bondholders. We never

take our investors for granted and are working

hard to build and maintain trust.

Regulators

We continue to play our part in ensuring a safe

and stable financial system.

Suppliers

Building a trusted supplier base is key to delivering

our ambitions. We want to ensure that as we grow

they share in our success.

Communities

We believe in being truly local through supporting

businesses to strengthen local economies, and

addressing local issues with initiatives that benefit

our neighbours and friends.

How we make money

We make money through the difference we charge on the loans we issue and the

deposits we take, less our operating costs and changes in ECL.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Progress in 2024 Operating environment Priorities Risks

KPIs

Integrated model

Our integrated model

aims to combine delivery

through physical and

digital channels.

We have delivered stand-out

service through our stores

and digital presence.

Our focus in 2024 has been on

pivoting towards corporate,

commercial and SME lending,

and specialist mortgages.

In commercial, we have enhanced

our business overdraft offering via

mobile application and launched

revolving credit facilities for larger,

more complex businesses. We have

also enhanced our digital self-service

and onboarding capabilities as well as

reviewing internal processes to

improve our speed to market.

In mortgages, we launched our first

truly “specialist” product – limited

company buy-to-let, with more to

launch throughout 2025.

We also made changes to our

store opening hours in response

to observed changes in customer

behaviour though noted some

decline in customer satisfaction as

customers adjusted to our revised

proposition.

Competition

The UK banking market continues to

be very competitive with high levels

of innovation. To remain competitive

we need to continue to invest in all of

our channels to ensure they meet our

customer needs.

Customer behaviour

Customers are continuing to place

a strong reliance on in-person

service, although the move to

digital continues.

Focus on sustainability

We continue to see strong pressure

from all of our key stakeholders

to ensure all of our operations

are sustainable.

We are committed to serving

customers through stores, and

continue to reassess our store opening

hours, based on how and when our

customers use our services.

We will explore options to further

right-size our cost base in the months

ahead by assessing all opportunities

across the real estate we lease and

own. Our plans are progressing with

focus on opening smaller sites in

strategic locations in the North of

England.

Although a physical presence

remains core to our offering, our

focus will be to expand our digital

offering to ensure we remain

competitive against both larger

high-street peers and new digital-

first or digital-only entrants.

Our principal risks in respect of

delivering our integrated model are:

• conduct risk

• operational risk

• strategic risk.

We continue to enhance our

processes and systems to minimise

the risk of operational issues, and to

continue delivering on our strategy.

Number of accounts (m)

2024

2023

3.0

Net promoter score (%)

Account opening

2024

2023

Existing customer

2024

2023

Business model continued

Read more about KPIs

on pages 14 to 15

Metro Bank Holdings PLC Annual Report and Accounts 2024

11Additional informationFinancial statementsStrategic report Risk reportGovernance

Business model continued

Progress in 2024 Operating environment Priorities Risks

KPIs

Unique culture

Our colleagues deliver

superior service and are

the heart of our

relationship banking

approach.

We pride ourselves on being a bank

that puts our colleagues at the heart

of what we do. Following a year of

transformation, we are a leaner

organisation, and, given the backdrop

of change both internally and

externally, we saw a disappointing

but not unexpected drop in our

engagement scores.

As part of our continuous

improvement, we will keep creating

an environment where colleagues

can grow, thrive and be their true

authentic selves. We are focused on

being an employer of choice. In 2024,

we were awarded the Diversity,

Equity & Inclusion Award in the Top

12 Inclusive Employer category at the

2024 British LGBT Awards reflecting

our commitment to attract and retain

talent from within the diverse

communities we serve.

Competition

The market for talent remains

highly competitive, and the high

inflationary environment has

continued to put pressure on wages.

To attract and retain talent, we must

remain competitive.

We are committed to ensuring our

people are our key focus and that

recent cost reduction measures do

not impact our unique culture — we

are focused on continuing to drive

our colleague engagement. This

includes continuing to support a

diverse and inclusive workforce

where colleagues can be themselves.

We will leverage the assistance of

our suppliers to deliver efficient and

cost effective opportunities.

Our transformation initiatives in 2025

will focus on further automation to

free up colleagues’ time and allow

them to focus on what they do best

— creating FANS.

Our principal risks in respect of

delivering our unique culture:

• conduct risk

• legal risk

• operational risk

• strategic risk.

Colleague engagement (%)

2024

2023

Senior leadership diversity (%)

Minority ethnic

2024

2023

Female

2024

2023

Service-led core

deposits

We attract core deposits

through our service-led

relationship banking model

with specific emphasis on

our core retail and SME

franchise.

Throughout 2024 our focus has been

three-fold.

Firstly, optimising the Bank’s liquidity

and cost of deposits in the context

of our evolving balance sheet

requirements. This has resulted in

prudent and deliberate reductions

in interest-bearing deposit balances

throughout the year resulting in a

lower year-end exit cost of deposits

of 1.40%, down 0.89% from a

February 2024 peak of 2.29%.

Secondly, growing our core low-cost

relationship current account

deposits, with growth across

corporate, commercial, business

and personal in 2024.

Finally, refreshing product availability

and fees across our corporate.

commercial, business and personal

proposition to ensure we remain

competitive and the cost of our

services are adequately reflected.

Competition

Interest rates have remained

elevated despite two base rate

reductions in 2024. Competition

for deposits has remained robust,

both from challenger banks and

larger incumbents. Alongside this,

newer digital-only fintechs continue

to grow.

Regulatory environment

The regulatory environment

continues to work towards ensuring

the fair treatment of customers

with a particular focus on vulnerable

customers and Consumer Duty.

As a deposit-taking institution we

proactively engage with our

regulators to advocate for

regulations that support both

innovation and growth. We continue

to deliver and implement a range of

comprehensive projects to ensure

we remain compliant with changes to

the regulatory environment.

During 2025, we will concentrate

on growing our current account

numbers, with priority geared

towards increasing commercial,

corporate and business accounts,

where balances tend to be higher

and fee earning opportunities are

greater.

Our principal risks in respect to

delivering service-led core deposits

are:

• conduct risk

• financial crime

• legal risk

• liquidity and funding risk

• market risk

• regulatory risk

• pricing risk.

We are actively managing our

balance sheet to ensure we

retain high levels of liquidity and

appropriately hedge our interest

rate risk.

Alongside this, we continue to

enhance our controls and review

our products to both protect our

customers and ensure we are

delivering fair outcomes.

Cost of deposits (%)

2024

2023

0.97

1.95

Metro Bank Holdings PLC Annual Report and Accounts 2024

Business model continued

Progress in 2024 Operating environment Priorities

Risks KPIs

Risk-adjusted

returns

We are balancing our

lending mix through a

broad yet simple product

offering that is priced

proportionate to risk.

Going into the year we took the

decision to refocus our attention on

commercial and specialist mortgage

lending, with a shift away from

consumer lending.

The £2.5 billion portfolio sale of

prime residential mortgages to

NatWest Group plc in Q3 2024

demonstrated commitment to the

Bank’s strategy to reposition its

balance sheet and enhance risk-

adjusted returns on capital.

The transaction was capital ratio

accretive and created additional

lending capacity to enable the Bank

to continue its asset rotation.

Like most banks, a large proportion

of our mortgage lending is fixed

rate and therefore despite base

rates having stabilised we are

continuing to see the benefits

as older loans mature into a higher

rate environment.

Competition

Competition in the lending space

remains strong notably in the SME/

commercial and specialist mortgage

markets, where competitors include

both larger banks and smaller,

specialist lenders.

Capital and funding regime

The UK’s rigorous capital regime

continues to see large financial firms,

including ourselves, dependent

on capital markets to support

regulatory requirements.

Economic and

political outlook

We expect interest rates to fall

towards a more normalised level

in 2025, but financial pressure

on households and an uncertain

political outlook remains.

We will continue to optimise our

balance sheet and utilise our capital

stack more efficiently to generate

the best possible returns for

all stakeholders.

We continue to shift our focus away

from unsecured personal lending

towards corporate, commercial and

SME lending, and specialist

mortgages, where our manual

underwriting capacity is a

competitive advantage.

Our principal risks in respect of

delivering risk-adjusted returns are:

• conduct risk

• credit risk

• market risk

• regulatory risk

• model risk

• capital risk

• strategic risk.

We take a prudent approach to

lending to minimise the risk of

losses. We continue to review

and update our credit models

to support this issue.

Cost of risk (%)

0.26

0.06

2024

2023

Loan-to-deposit ratio (%)

2024

2023

Total capital plus MREL

ratio (%)

22.0

23.0

2024

2023

Read more about KPIs on

pages 14 to 15

Metro Bank Holdings PLC Annual Report and Accounts 2024

13Additional informationFinancial statementsStrategic report Risk reportGovernance

Key performance indicators

Link to business model

Components of our business model

Our business model is set out on page 10. Further

details of each component of our business model

can be found on pages 11 to 13, including how our

KPIs link to measure our performance for each of

these components.

Output of our business model

The output of our business model is to generate

long-term value and create tangible book growth,

measured through:

• total shareholder return

• return on tangible equity.

Link to remuneration approach

Our approach to remuneration for management

is based on a simple and clear scorecard. The

scorecard measures are aligned to the four

components of our business model to ensure

management is focused on these. In addition, we

provide an LTIP and SVAP which are linked to our

scorecard outcomes of long-term value generation

and tangible book growth.

Alternative performance measures

Where a financial KPI is an alternative performance

measure, a reconciliation to the nearest statutory

measure can be found on pages 224 to 228.

KPI performance during 2024

Our KPIs in 2024 are reflective of a year of

transformation and transition as we took proactive

steps to position ourselves for future growth and

sustainable profitability.

Our colleague engagement score is also aligned

with this period of change which we recognise has

been challenging for some. Building on this remains

a focus for us looking ahead.

We have maintained a steady portfolio of customer

accounts, kept the cost of risk low and managed

our capital position to end the year above

regulatory minima (including public buffers) for

CET1, total capital and total capital plus MREL

ratios.

As we look forwards into 2025, we will continue

to drive our cost of deposits down whilst growing

customer accounts and moving steadily into

long-term profitability.

Our KPIs are the metrics we monitor to check we are on

track with the delivery of our strategy, as well as to assess

how our business model is performing.

Key

Score card measure

LTIP measure

Alternative performance measure

Non-financial

Customer accounts (m) Colleague engagement (%)

024

023

022

2.7

3.0

024

023

022

How we define it

Number of active customer accounts.

Why it is important

Growing our customer accounts is key to our

franchise and validates that our approach is working

and that our proposition resonates with customers.

How we define it

The result is taken from our annual Voice of

the Colleague survey.

Why it is important

Attracting and retaining talent is vital to delivering

superior service and preserving our culture so we

want to ensure colleagues enjoy working for us.

Net promoter score (%)

Senior leadership diversity (%)

Account opening Female

024

023

022

024

023

022

Continuing relationships Minority ethnic

024

023

022

024

023

022

How we define it

Net promoter score for new account openings and

continuing customer relationships.

Why it is important

Our purpose is to create FANS and ensuring strong

ongoing levels of customer satisfaction is important

in measuring this.

How we define it

Proportion of female/minority ethnic colleagues

amongst our senior leadership team (Executive

Committee and their direct reports).

Why it is important

Ensuring diversity amongst our senior management

ensures we are representative of the communities

we serve and our colleagues as a whole. This means

we are more likely to make decisions that are

beneficial to all our stakeholders and help us deliver

on our strategy.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Financial

Statutory (loss)/profit before tax (£m) Underlying loss before tax (£m)

Total capital plus MREL ratio (%)

024

023

022

(70.7)

(212.1)

30.5

(14.0)

(50.6)

(16.9)

024

023

022

22.0

23.0

17.7

024

023

022

How we define it

Our earnings before tax as defined by International Accounting Standards

(IAS) and International Financial Reporting Standards (IFRS).

Why it is important

Achieving sustainable profitability is the key financial measure

to demonstrate we are creating long-term value.

How we define it

Our statutory earnings adjusted for certain items that distort

year-on-year comparisons.

Why it is important

It provides further understanding of the underlying trends in the business.

How we define it

Our total capital plus MREL expressed as a percentage of risk-weighted

assets (RWAs).

Why it is important

Whilst we measure capital at multiple levels our biggest constraints are

at our total capital plus MREL level which we are actively addressing,

ending the year above regulatory minima including public buffers.

Cost of deposits (%)

Cost of risk (%)

Statutory cost:income ratio (%)

0.97

1.95

0.20

024

023

022

0.26

0.06

0.32

024

023

022

151

106

024

023

022

How we define it

Interest expense on customer deposits divided by the average

deposits from customers for the year.

Why it is important

Our ability to attract service-led core deposits is a component of

our business model with cost of deposits being a key determinant

in measuring this.

How we define it

ECL expense divided by average gross loans for the year.

Why it is important

We seek to minimise our cost of risk, balanced with the interest received,

to ensure we are optimising our lending.

How we define it

Total costs (excluding ECL expense) expressed as a proportion

of total income.

Why it is important

Achieving tangible book growth involves achieving profitability

and therefore creating positive operating jaws is vital.

Statutory cost: income ratio is a useful metric in measuring this.

Return on tangible equity (%)

Loan-to-deposit ratio (%)

Total shareholder return (%)

(10)

(23)

024

023

022

024

023

022

(41)

(71)

155

024

023

022

How we define it

Earnings for the year divided by average tangible shareholders’ equity

(total equity less intangible assets).

Why it is important

This is the strategic output of our business model and how we

judge success.

How we define it

Net loans and advances to customers expressed as a percentage

of total deposits.

Why it is important

As we seek to be a deposit funded bank, ensuring we maintain an

appropriate loan-to-deposit ratio is a key measure in managing this.

How we define it

Total capital gains and dividends returned to investors over a one-year

rolling period.

Why it is important

We want to ensure shareholders are rewarded for their continued

investment in us.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Additional informationFinancial statementsStrategic report Risk reportGovernance

Financial review

Summary of the year

2024 was an important year as we pivoted our

focus to corporate, commercial and SME lending,

and specialist mortgages and took proactive steps

across the Bank to position ourselves for further

growth and future profitability in the coming years.

For the full year ended 31 December 2024, we

recorded an underlying loss before tax of

£14.0 million, a reduction of 17% from £16.9 million as

at 31 December 2023, reflecting the commitment to

greater cost discipline and transition to a leaner,

more agile operating model designed to most

effectively support our customers and better

position the Bank for profitability.

We recognised a statutory loss before tax of

£212.1 million for the full year, largely driven by a

one-off loss on the sale of a £2.5 billion mortgage

portfolio to NatWest Group plc and various charges

relating to the transformation of the business and

remediation costs. However, we recognised an

underlying profit of £12.8 million in H2 (H1: loss of

£26.8 million) that supported a forecast indicative

of future profitability. We recognised a deferred

tax asset on unused tax losses and subsequently

recorded a statutory profit after tax of £42.5 million

for the full year (2023: £29.5 million).

Our proactive and positive management of our

balance sheet and our dedication to the cost

reduction programme we outlined at the beginning

of the year support the future prosperity of

a profitable bank and position us well looking

into 2025.

Statutory and underlying results

Financial information in this report is

prepared on a statutory (taken from our

financial statements on pages 151 to 218) and

underlying basis (which we use to assess

performance on a management basis).

Further details on how we calculate

underlying performance, as well as our other

alternative performance measures can be

found on pages 224 to 228.

Income statement

2024

£m

2023

£m

Change

Underlying net

interest income 37 7.9 411.9 (8%)

Underlying non-net

interest income 125.6 134.6 (7%)

Total underlying

income 503.5 546.5 (8%)

Underlying operating

expenses (510.4) (530.2) 4%

ECL expense ( 7.1) (33.2) 79%

Underlying loss

before tax (14.0) (16.9) 17%

Non-underlying items (198.1) 47.4 (518%)

Statutory (loss)/profit

before tax (212.1) 30.5 (795%)

Taxation 254.6 (1.0) 25650%

Statutory profit

after tax 42.5 29.5 44%

Interest income

Interest income benefitted from a higher average

base rate during the year, increasing 9% to

£935.4 million (2023: £855.7 million). Lending

income continues to make up the largest

proportion of our interest income, though following

the sale of a portfolio of prime residential

mortgages, this has decreased marginally to

£586.2 million (2023: 599.9 million).

Asset yields increased to 4.17% (2023: 3.37%)

as we pivoted towards more specialist mortgages

and sold £2.5 billion of prime residential

mortgages. Our remaining retail mortgages are

90% fixed with an average time to reversion of

2.23 years (31 December 2023: 2.41 years). We

expect to see further improvements to asset

yields and associated income in the years ahead

as older balances roll-off and are replaced with

new lending at a higher rate.

Our commercial lending portfolio income grew,

predominantly driven by our floating business loans

which have seen greater yields as a result of the

higher base rate environment, as well as the

continued attrition of lower-yielding commercial

real estate. The consumer and Government-

backed lending portfolios are in run-off as the

Bank continues to pivot its strategy towards

corporate, commercial and SME lending, and

specialist mortgages.

We also saw the benefits of increased rates flowing

through to our floating treasury portfolio, as well as

the fixed rate treasury assets maturing at an

average blended yield of 1% and replaced by assets

in line with base rate.

Interest expense

Interest expense increased by 26% to

£557.5 million (2023: £443.8 million). This increase

reflected an increase in cost of deposits that

followed our deposit campaign in Q4 2023. We

sought to increase deposit inflows by launching a

range of products such as Instant Access accounts

at competitive rates, the impact of which has

materialised in 2024 where the average cost of

deposits increased to 1.95% (2023: 0.97%) as a

result. We actively managed down costly deposits

in the latter half of the year, reducing the average

cost of deposits from 2.18% in H1 to 1.72% in H2.

In January 2024, we repaid a £255 million repurchase

agreement with NatWest Group plc, reducing the

associated interest expense for the year.

We continue to see the impact of the increased

cost of funding following our repricing and

restructuring of debt securities in 2023. The

successful debt refinancing strengthened our

balance sheet and enabled us to embed our

strategy to pivot to specialist and commercial

lending throughout 2024. The launch of products

such as Limited Company Buy-to-let represented

the realisation of our revised strategy and ability to

enhance future earnings through asset growth and

risk adjusted returns.

Non-interest income

Net fee and commission income has increased by

£2.8 million to £93.2 million in 2024 (2023:

£90.4 million), reflecting nation-wide use of Bank

products including safe deposit boxes and Metro

Bank cards. Both safe deposit box income and ATM

and interchange income remained fairly static at

£19.0 million and £40.4 million respectively (2023:

£18.2 million and £40.0 million). Service charge and

other fee income grew by £1.8 million to £38.6 million

(2023: £36.8 million) providing a valuable source

of income, whilst having minimal impact on our

capital ratios.

Operating expenses

2024 2023

Underlying cost:income ratio 101% 97%

Statutory cost:income ratio 151% 90%

In Q4 2023, we committed to a cost reduction plan

to support a return to sustainable profitability.

Despite inflationary pressures, we have seen this

disciplined approach to cost management

materialise into a 4% improvement in underlying

operating expenses, year on year and a decrease

in general operating expenses from £502.9 million

in 2023 to £489 million in 2024.

People related costs remain our largest operating

expense but reduced to £209.6 million in 2024

(2023: £241.2 million) following difficult decisions to

restructure and reduce headcount. This is offset

partially by an increase in transformation costs. The

provision for the restructure is recognised as part

of non-underlying items.

Professional fees increased by 19% to £27.7 million

(2023: £23.2 million) as we prioritised digital

enablement and enhancement to deliver

customer initiatives.

Information technology costs remained broadly

flat at £60.1 million (2023: £59.7 million) reflecting

investment into digitising and improving new and

existing products and making internal processes

more efficient.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Occupancy expenses are driven by costs associated

with our continued store presence. Despite

inflationary pressures, costs remained broadly flat

at £30.9 million (2023: £31.7 million) reflective of

our disciplined approach to cost management.

We continuously exercise discipline around cost

whilst acknowledging the costs associated

with greater investment in diversifying our product

capabilities to both boost deposits and transition

further into specialist lending. We value our

relationship-centric approach to banking and will

continue to drive proactive cost management whilst

maintaining and growing our physical presence.

Non-underlying items

2024

£m

2023

£m

Change

Impairment and

write-off of property,

plant, equipment and

intangible assets (44.0) (4.6) (857%)

Remediation costs (21.3) – n/a

Transformation costs (31.1) (20.2) (54%)

Mortgage

portfolio sale (101.6) – n/a

Holding company

insertion costs – (1.8) n/a

Cost of capital raise

(0.1) 74.0 n/a

Non-underlying items (198.1) 47.4 (518%)

We have recognised non-underlying items of

£198.1 million in 2024 (2023: income of 47.4 million)

driven by a loss on the sale of the £2.5 billion

mortgage portfolio, write offs and impairments of

£44.0 million in relation to intangible assets, and

transformation.

The sale of the mortgage portfolio provides us

with additional lending capacity to enable a further

shift to high yielding assets in niche markets,

supporting our strategic focus to become a

specialist lender of choice.

Transformation costs consist primarily of the

costs associated with restructuring, specifically

movements to appropriately size the Bank and

make operations and support services more agile

and efficient going forwards.

Remediation costs refer to any and all costs

associated with legal or professional proceedings

such as the final conclusion of FCA enquiries.

At the end of 2024, we wrote off the outstanding

net book value of a number of intangible assets.

The larger proportion of the balance related to

legacy RateSetter and AIRB models.

Expected credit loss expense

31 December 2024

ECL

allowance

£m

Coverage

ratio

NPL ratio

Retail mortgages 15 0.29% 3.95%

Consumer lending 108 14.43% 13.02%

Commercial 68 2.06% 6.16%

Total lending 191 2.07% 5.48%

31 December 2023

Retail mortgages 19 0.24% 1.87%

Consumer lending 108 8.33% 5.94%

Commercial 72 2.13% 4.91%

Total lending 199 1.59% 3.11%

1. Coverage ratio is calculated using underlying figures.

We recognised an expected credit loss expense

of £7.1 million in 2024 (2023: £33.2 million),

primarily due to improvements in the proportion

of commercial lending balances in stage 2 and 3.

Some deterioration has been noted in the

outstanding retail lending balances due to the

macroeconomic environment but our strategic

pivot allows us to benefit from the improvements in

commercial. We recognised management overlays

and adjustments of £18.74 million (2023:

£23.4 million) which represents 10% of ECL stock

(31 December 2023: 12%). As at 31 December 2024,

our coverage ratio was 2.07% (2023: 1.59%) and we

believe we remain appropriately provided at this

stage in the economic cycle.

Balance sheet

Lending

31 December

2024

£m

2023

£m

Change

Retail mortgages 5,145 7,817 (34%)

Consumer lending 745 1,297 (43%)

Commercial 3,314 3,382 (2%)

Gross lending 9,204 12,496 (26%)

ECL allowance (191) (199) 4%

Net lending 9,013 12,297 (27%)

Net loans and advances to customers ended

the year at £9,013 million, down 27% from

12,297 million as at 31 December 2023, in large part

driven by the sale of the mortgage portfolio.

As a result, retail mortgages represented a smaller

proportion of our lending base than in previous

years, 56% compared to 63% as at 31 December

2023, as we pivoted our strategy to commercial

and specialist lending.

The consumer portfolio has decreased from

£1,297 million at the end of 2023, to £745 million

as at 31 December 2024 driven by the cessation

of lending through the RateSetter brand, further

supporting our strategic transition.

Commercial lending has reduced by a smaller

margin than retail and consumer lending,

representing a greater proportion of our overall

lending base, 36% as at 31 December 2024

compared to 28% as at 31 December 2023.

Commercial lending is down to £3,314 million as

at 31 December 2024 (31 December 2023:

£3,382 million) driven by a run off of government

backed lending and Professional Buy-to-Let but is

offset by more core commercial lending.

Throughout 2024, we have supported our shift to

commercial and specialist lending by digitalizing

more products and launching products such as

Limited Company Buy-to-Let. As we look forward

to 2025, commercial lending will be a focus for us

specifically those parts of the market where our

manual underwriting capacity present a

competitive advantage.

Treasury portfolio

Over the year, we have continued to optimise

our treasury portfolio to maximise our risk

adjusted return on regulatory capital, particularly

as rates have risen. We ended the year with

£7,301 million of treasury assets (31 December

2023: £8,770 million), comprising £4,490 million

investment securities and £2,811 million cash and

balances at the Bank of England (31 December

2023: £4,879 million and £3,891 million

respectively). Our investment securities remain

high quality and liquid with 75% being either

AAA-rated or gilts (31 December 2023: 75%).

Other assets

Property, plant and equipment ended the year at

£711 million, down from £723 million as at 31

December 2023. No new store openings took place

in 2024 though we are committed to identifying

appropriately sized sites in the North of England

that are conveniently located for surrounding

businesses. We obtained the freehold of two more

stores in 2024, a more cost-effective way of

delivering our store-based service-led model.

Intangible assets have decreased to £126 million,

down from £193 million in 2023, reflecting a more

selective approach to investments and write offs

including the RateSetter platform in line with the

cessation of our RateSetter brand and the AIRB

platform. Our investments in 2024 have included

Mobile LiveChat and Online Self-serve.

Financial review continued

1. Relates to the capital raise in Q4 2023.

Metro Bank Holdings PLC Annual Report and Accounts 2024

17Additional informationFinancial statementsStrategic report Risk reportGovernance

Deposits

31 December

2024

£m

2023

£m

Change

Retail customer

(excluding retail

partnerships) 5,968 7, 235 (18%)

Retail partnership 1,785 1,708 5%

Commercial

customers

(excluding SMEs) 2,263 2,898 (22%)

SMEs 4,442 3,782 17%

Total customer

deposits 14,458 15,623 (7%)

Of which:

Demand:

current accounts 5,791 5,696 2%

Demand:

savings accounts 7,5 34 7,827 (4%)

Fixed term:

savings accounts 1,133 2,100 (46%)

We are committed to being a relationship-focused

deposit-driven bank. We ended the year with

deposits of £14,458 million (31 December 2023:

£15,623 million), a decrease of 7% year on year.

A successful deposit campaign at the end of 2023

helped to manage the reduction but increasing the

overall cost of deposits.

Our overall deposit base remains diversified with

a 54%:46% between retail and commercial

customers (31 December 2023: 57%:43%) with

growth noted within the SME and retail partnership

areas, a trend we expect to see continue in 2025.

Wholesale funding

In 2024, we significantly reduced our TFSME

balance from £3,050 million to £400 million,

utilizing the proceeds of the mortgage portfolio

sale to NatWest to fund the reduction and repay

our holding early.

Taxation

We recorded a tax credit of £255 million (2023:

£1.0 million tax charge) in the year.

We have unused tax losses totalling £1,073 million

which equated to a deferred tax asset of

£269 million. £13 million was already recognised so

the credit to the income statement in 2024 was

£256 million.

The future profit projections as per the board

approved Long-Term Plan support the recognition

of the deferred tax asset. There is no time limit on

the utilisation of tax losses.

Liquidity

Our liquidity position remains strong and in excess

of regulatory minimum requirements despite

efforts being made to reduce the more costly

deposits. We ended the year with a liquidity

coverage ratio of 337% (31 December 2023:

332%) and a net stable funding ratio of 169%

(31 December 2023: 145%).

We hold large amounts of high-quality liquid assets

totalling £6,071 million (2023: £6,656 million). This

included £2,811 million of cash held at the Bank of

England (2023: £3,891 million).

Capital

2024

£m

2023

£m

Change

CET1 capital 808 985 (18%)

RWAs 6,442 7,533 (14%)

CET1 ratio 12.5% 13.1% (56bps)

Total regulatory

capital ratio 14.9% 15.1% (24bps)

Total regulatory

capital plus

MREL ratio 23.0% 22.0% 100bps

UK regulatory

leverage ratio 5.6% 5.3% 30bps

We ended the year with CET1, total capital and total

capital plus MREL ratios of 12.5%, 14.9% and 23.0%

respectively (31 December 2023: 13.1%, 15.1% and

22%), above regulatory minima, including buffers

(excluding any confidential buffers, where

applicable), of 9.2%, 10.8% and 21.2%.

We noted improvements in our total capital plus

MREL ratio in excess of those expected as part

of the capital raise, as we actively constrained

lending in order to preserve capital. The sale

of a portfolio of £2.5 billion of prime residential

mortgages to NatWest Group plc in Q3 24

demonstrated further commitment to the

Bank’s strategy to reposition its balance sheet

and enhance risk-adjusted returns on capital. The

transaction was capital ratio accretive and created

additional lending capacity to enable the Bank

to continue its asset rotation.

We ended the year with risk-weighted assets of

£6,442 million (31 December 2023: £7,533 million),

reflecting the proactive steps to effectively manage

our capital position for positive future growth.

Looking ahead

We took proactive steps to position ourselves for

future growth throughout 2024 and will continue

to build on that progress as we enter 2025.

We will integrate our agile working model in

collaboration with Infosys as we simplify and

digitise our ways of working to maintain strong

cost discipline.

We will continue to prioritise a reduction in cost of

deposits whilst remaining committed to positive

and meaningful relationships with our customers

opening new stores and offering more specialist

products.

Marc Page

Chief Finance Officer

22 April 2025

Financial review continued

Metro Bank Holdings PLC Annual Report and Accounts 2024

Environmental, social and governance review

Our strategic pivot towards corporate, commercial and SME

lending, and specialist mortgages sits alongside our belief in

the ethos of relationship banking which is closely interlinked

with ESG.

Our customers,

communities

and colleagues

Page 21

Our planet and

climate-related

disclosures

Page 27

Governance,

resilience, suppliers,

data privacy and

security

Page 25

A business with strong ESG credentials has a

positive impact on the communities it engages

with and consumers are increasingly influenced

by the ESG performance of the companies they

interact with.

According to the Federation of Small Businesses

there are 5.5 million small businesses in the UK

employing over 60% of the UK’s workforce, a total

of 16.7 million people. These businesses are seen

as the lifeblood of local economies, bringing jobs,

services and revenue as well as being an integral

part of their communities. The Bank’s strategic

pivot with its new focus on relationship banking will

help to further improve the prospects for many

small and medium-sized businesses.

The Bank’s ethos centres on remaining deeply

rooted in the communities in which we operate,

whether that be through support for local

businesses or our participation in local community

initiatives and events. Aligned with this is our

continued desire to act sustainably and responsibly

towards our customers, our communities, our

colleagues and our environment; to achieve that

we have continued to evolve our ESG activity in

order to amplify the work underway across

the Bank and further embed a strong and lasting

ESG culture.

Our customers value us for the high-quality service

they receive; our communities benefit from our

local engagement, investment and fundraising;

our colleagues thrive in our inclusive culture;

and we act where possible to make a difference

to our environment.

Support for communities in 2024 has included:

• Lunar New Year – customers being given red

envelopes over the Lunar New Year period to

use to gift money to friends and family

• Easter Egg Appeal – 38 stores taking part in our

appeal to donate chocolate eggs to local causes

• Eid al-Adha – Eid colleague communities shared

stories and educated others on Eid al-Adha and

Eid al Fitr

• International Women’s Day – 27 stores hosting

events in-store and externally

• British Legion Poppy Appeal – over 40

colleagues, alongside Armed Forces personnel,

raised over £60,000 in support.

ESG governance and structure

The Board maintains oversight of our ESG

strategy and priorities with ESG issues regularly

considered by the Executive Committee (ExCo).

An ExCo-level ESG Steering Committee meets

once a quarter, to ensure the Bank’s approach to

ESG is strategic, coordinated and consistent with

the direction set by the Board. Following our

organisational restructure, strategic requirements

and resources were reviewed with the Social and

Governance Working Groups operating as

workstreams.

The Risk Oversight Committee (ROC) has

oversight of the framework for managing and

reporting the risks from climate change, as set

out in the Enterprise Risk Management

Framework. ROC can escalate climate-related

risk matters to the Board.

The Audit Committee reviews our ESG update

and disclosures for TCFD requirements as part

of its wider role in reviewing our Annual Report

and Accounts.

Non-Executive Director Nick Winsor has an

informal Board role for ESG oversight which

includes engaging with senior management

on ESG matters. The Chief People Officer

is the ExCo member responsible for ESG

strategy and the Chief Risk Officer has Senior

Management Function (SMF) responsibility

for climate change risk.

Our focus areas

ESG Steering

Committee

Executive Committee

Audit

Committee

Risk Oversight

Committee

Board LevelExecutive Level

Nomination

Committee

People and

Remuneration

Committee

Board

Environment

Workstreams

Social

Workstreams

Governance

Workstreams

19Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Environmental, social and governance review continued

ESG materiality and priority themes

In 2022, we conducted a materiality assessment

of our approach towards current and emerging

ESG issues to obtain deeper understanding of

our external and internal stakeholders’ views.

We used the Global Reporting Initiative approach.

Following research and a shortlisting exercise,

we asked stakeholders to rank 19 issues, which

we mapped against six overarching priority

themes. We take account of the results in our

considerations of ESG issues.

Turning customers and the communities we

serve into FANS is central to everything we do.

Topics identified via materiality assessment:

• customer service and experience –

creating FANS

• financial inclusion, literacy and education

• supporting vulnerable customers

• community engagement, investment

and fundraising.

We work with suppliers who uphold our values

and actively assess and monitor the controls

they put in place.

Topics identified via materiality assessment:

• supply chain engagement

and responsible procurement

• human rights and modern slavery

• anti-bribery and corruption.

We are committed to an AMAZEING colleague

experience, based on an inclusive culture.

Topics identified via materiality assessment:

• colleague attraction training

and development

• colleague engagement, health,

safety and wellbeing

• diversity, equality and inclusion.

Good governance, compliance and risk

management practices make sure we remain

a sustainable, strong and resilient business.

Topics identified via materiality assessment:

• good governance practices

• ethics and compliance

• risk management and business resilience.

We continue to assess, evolve and mature our

data privacy and cyber security capabilities.

Topics identified via materiality assessment:

• data privacy and cyber security

• financial crime and fraud.

We are taking the actions required to make

positive changes and reduce our impact on

the environment.

Topics identified via materiality assessment:

• climate change

• operational environmental efficiency

• responsible investment and stewardship

• sustainable product innovation.

Our customers

and communities

Our suppliers

Our colleagues

Governance

and resilience

Data privacy

and security

Our planet

Metro Bank Holdings PLC Annual Report and Accounts 2024

Environmental, social and governance review continued

Our ESG strategy contributes to a number

of the United Nations Sustainable

Development Goals (UN SDGs) and this is

highlighted as appropriate in the following

pages.

UN SDGs

Our Diversity and Inclusion agenda continues to be

a focus and to support this we have introduced

new mandatory e-learning. Colleagues explore

why having a diverse workforce matters and what

it means to have a truly inclusive workplace culture.

colleagues have started their

Learning to Lead journey this year

Leader capability is one of our key focus areas

and we have invested in all leaders from newly

appointed line-managers to our senior team. In

May, we launched our compulsory leader learning

to give all new leaders a strong foundation in

people management. To support this, we

relaunched our four people management

essentials modules in August. 57 colleagues have

started their Learning to Lead journey this year

with 79% from corporate functions. 162 store

managers and assistant store managers were

trained over six weeks to support the new

operating model – over 80% attended at least

four of the six sessions. Finally, our senior leaders

were offered training in building high performing

teams through psychological safety (81% attended)

and effective decision-making (64% attended).

These topics were designed to support our

business transformation as part of our Consumer

Duty responsibilities.

Education

Alignment to

UN SDGs:

We continue to champion financial education and

wellbeing within our local communities. Our free

Money Zone financial education programme

supports children aged 7 to 17 to develop the skills

needed to handle money as adults. Since its launch

in 2020 we have supported over 250,000 young

people to develop their financial literacy skills.

Over 400 of our colleagues are trained to host

sessions for Key Stages 2 and 3. The Money Zone

programme now also covers care leavers and

military personnel. We will continue to evolve our

financial literacy skills training with our strategic

aims in mind.

We have been running learning campaigns focused

on the capabilities that help drive our strategy such

as Learning to Work Week and Digital Skills. The

latter are becoming even more important as

technology including automation and data analysis

advances, and proves crucial in helping us enhance

the face-to-face relationships which our FANS

value so much. Over 1,000 colleagues engaged in

our dedicated internal campaign to explore the

current digital initiatives and future possibilities.

To support our pivot to relationship banking, we

have worked towards building the skills of our

business, commercial, and corporate colleagues,

with refreshed learning journeys and investment

in key credit skills training.

Our customers,

communities and

colleagues

Our commitment to the social element of ESG can

be best showcased through our community ethos

which is interlinked with our recent strategic pivot

to corporate, commercial and SME lending, and

specialist mortgages. We have developed deep

relationships with local and regional businesses

around the country, helping them thrive and grow

alongside our own business. Responsibility for

developing and maintaining those relationships sits

across the Bank, from store colleagues working

day in, day out in their local communities to local

business managers and commercial and regional

business banking colleagues. Through this

approach we are able to demonstrate promotion

of education, employment, equality and equity,

and this is echoed in colleague community and

internal culture too, which we measure each year

in our Voice of the Colleague survey.

21Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

A signatory and active member of the Investing in

Women Code, the Bank is keen to support and

encourage female entrepreneurs to start up and

grow businesses. We have showcased our case

studies on the Invest in Women hub – a financial

guide for women-led businesses. Key highlights for

this year include profiling three female founders

and their businesses across cricket grounds and

through local and social media as part of our

sponsorship with the England and Wales Cricket

Board (ECB) to promote women in cricket and

business. We have also hosted dozens of

complementary business networking and

mentoring events across our store network.

This year, we transferred a portion of our

apprenticeship levy to female-run businesses.

We are supporting Encore Environments by

funding an apprentice to complete the AAT Level 3

diploma in accounting and Velvet Mortgages

through funding two Level 3 mortgage advisor

apprenticeships. We also supported two female-

led businesses with funding for apprentices to help

encourage business growth.

As an employer provider, we run a Level 2 and a

Level 3 financial services apprenticeship. Of those

due to complete their apprenticeship this year,

five have passed with one achieving a distinction.

We will also be sponsoring colleagues to join our

sixth cohort with Cranfield School of Management

to work towards achieving an MSc in Sustainable

and Digital Banking (Retail) along with a Level 7

senior leader apprenticeship.

We have already commenced recruitment for our

new stores, opening in 2025, where we will be

employing around 30 additional colleagues.

We also support a number of jobs indirectly via

the many businesses we support in our local

communities. Our wellbeing offer for colleagues

includes a suite of tools, including our Employee

Assistance Programme, and additional support

through our health partners as well as the Bank

Workers Charity. In 2024, 58% of colleagues who

utilised the health care programme completed a

Health Review Check to support them in making

informed choices about improving their mental

and physical wellness. The Bank’s Wellbeing hub

is a home for colleagues to explore all topics

related their physical health and mental wellbeing;

colleagues can read blogs created by their peers,

explore our Mental Health First Aid Kit and find out

about upcoming wellbeing events such as guided

meditation sessions and webinars to managing

stress and anxiety.

In 2024, the Bank reviewed its health partners with

a view to optimising colleague medical provision

and value for money. As a result, the Bank made the

decision to move from Vitality to Bupa, effective

from January 2025.

Our inclusion networks have also been responsible

for launching game-changing initiatives to enable

our colleagues to thrive at work – see Network

highlights on page 24.

Employment

Alignment to

UN SDGs:

Metro Bank is a multi-award winning organisation.

The awards we’ve won in 2024 include:

• British LGBT Awards – Top 12 Inclusive Employer

• Trans in the City Awards – Trans inclusive

organisation

• Asset Finance Connect Awards – Social award

• UK Sponsorship Awards – Women’s Sports

Sponsorship

• The Money Age Mortgage Awards – “Large

Loans Mortgage Lender of the Year”

• British Specialist Lending Awards – “Business

Leader: Complex Income Lender” – Charles

Morley, Director of Mortgage Distribution

• British Specialist Lending Awards – “Lender:

Head of Sales” – Joanne Hollins, Head of

Mortgage Intermediary Distribution

• Elite Woman – “Best Women Mortgage Leaders

in the UK” – Joanne Hollins, Head of Mortgage

Intermediary Distribution

• British Mortgage Awards – “Business Leader:

Intermediary Lender (less than £5bn gross

lending p.a)” – Charles Morley, Director of

Mortgage Distribution

As an active supporter of the Armed Forces

Community we have re-signed our

commitment to the military family through

the Armed Forces Covenant. We are

currently a holder of the gold award under

the Employer Recognition Scheme and will

be working towards our recertification in

2026. Colleagues have attended a number

of events to support members of the armed

forces transition into a new career this year

and already have plans for further events in

2025. We have continued to support the

annual Royal British Legion, with some

colleagues using their Day to Amaze to

fundraise on the London Poppy Appeal Day.

Environmental, social and governance review continued

Armed Forces

Business

Insights Day

Metro Bank Holdings PLC Annual Report and Accounts 2024

Environmental, social and governance review continued

In May 2024, we launched The Metro Bank

Girls in Cricket Fund with the ambition to

triple the number of girls’ teams in England

and Wales. The Fund, co-designed with the

support of research commissioned with

Women in Sport, and jointly funded by

Metro Bank and the ECB, focuses on

recruiting, educating, supporting, and

celebrating the people that make girls’

cricket happen. To help the mission come

to life, the Fund provides support to

current and potential new coaches and

volunteers, female and male, both in clubs

with a girls’ section and those starting

a new girls’ section.

The Fund comprises seven ‘pillars’ of

activity designed to help overcome the

key barriers holding back growth in girls’

cricket, as well as providing lasting support

as people progress through the game to

help women and girls succeed both on

and off the pitch.

In 2024 alone there have been: 70 brand

new to cricket volunteers recruited; 168

coaching qualification places created for

new learners; 1,130 mentoring hours

delivered; 24 coaching resources and

tutorials created for coaches; 38 Metro

Bank Champion of Girls’ Cricket award

winners; and, a 56% to 44% female to male

split for the ECB Coach Developer 2024

cohort, making it the first time ever that

there have been more women than men.

The activity in 2024 contributed to a 21%

increase in the number of girls’ teams in

2024, which is making a huge impact to

so many of our communities.

2025 will see The Metro Bank Girls in

Cricket Fund further supercharged to

deliver genuine change for the game,

and for the lives of so many young girls.

463

more girls teams in 2024

Transforming

the game for

girls with The

Metro Bank Girls

in Cricket Fund

Progress in 2024 has included:

• becoming a member of the Hidden Disabilities

Sunflower Lanyard Scheme with training for

customer facing colleagues

• introducing the ability to support vulnerable

customers through LiveChat without the

need to call

• improving identification of signs of customer

vulnerability through our contact centre

automated voice response system

• continuing our extensive training programme

for all customer facing colleagues to further

uplift skills and capabilities in recognising

and responding to the needs of vulnerable

customers

• research into the nature, scale and

experiences of existing customers

with characteristics of vulnerability

• updating our website to improve support

content available to our customers

• regular vulnerable customer training sessions

hosted by external ‘lived experts’ to help improve

all colleague awareness and consideration.

We always strive to deliver a positive customer

experience and right any wrongs. We publish

customer complaints data on our website here:

www.metrobankonline.co.uk/helpand-support/

forms/give-us-feedback/ complaints-data

In keeping with our commitment to local

communities, every colleague is entitled to a paid

day to volunteer – their very own ‘Day to Amaze’ –

as a way of supporting good causes in their local

areas. Alongside this, our colleagues and local

communities raised £115,000 for local, national

and international good causes via collections

and sponsored activities and events.

Equality and equity

Alignment to

UN SDGs:

Recognising the continuing economic challenges

faced by many of our customers, we continue to

support the UK Government’s Mortgage Charter

to offer additional support including for customers

struggling to keep up with mortgage payments.

Our website also has pointers to a number of

resources to help customers with budgeting,

boosting their credit score and avoiding fraud

and scams.

We are committed to financial inclusion and

ensuring our customers have access to market

leading service and support. We have continued

our focus on further enhancing how we consider

and support customers with characteristics of

vulnerability across all areas of what we do.

of our stores are now Safe Spaces

23Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

2024 was the second year of the Bank’s

groundbreaking partnership with the ECB as its

first-ever Champion of Women’s and Girls’ Cricket.

The partnership, developed around a shared

commitment to diversity, inclusion and community

impact, has gone from strength to strength, with

another really strong year of results for both the

growth of women’s and girls’ cricket, and for the

Metro Bank brand.

As a snapshot of activity and impact,

2024 delivered:

• 101% increase in women’s international cricket

attendance vs the last non-Ashes year in 2022

• 28% increase in the number of women playing

cricket in the UK vs 2023

• 155 match days featuring Metro Bank branding

across the summer

• 6pp increase in brand awareness of Metro Bank

amongst cricket fans

• launch of The Metro Bank Girls in Cricket Fund,

contributing to a 21% increase in the number of

girls’ teams vs 2023.

Our Voice of the Colleague survey showed that,

although the engagement score dropped as

anticipated given the scale of transformation and

change within the Bank and in the external context,

colleagues still value our people-centric, inclusive

culture and the chance to share their thoughts — the

survey response rate was 5 points above the global

benchmark. We also saw our question ‘I have good

working relationships with members of my team’

score 5 points above global benchmark, reflecting

our new brand positioning and focus on people and

relationships, both inside the Bank and out.

In 2024, the Bank won several awards in the

diversity and inclusion space — see Employment

section page 22 — and our five inclusion networks

have supported the business as it continues to

build on its inclusive culture, highlighting and

supporting important events as well as raising

money for brilliant causes. We also launched our

sixth inclusion network Mforces to support people

leaving the military and their families.

Environmental, social and governance review continued

Network highlights

Mbody

• worked with our Vulnerable Customer team

to support the launch of our membership to

the Hidden Disabilities Sunflower Lanyard

scheme, supporting our colleagues with hidden

disabilities and sharing valuable information,

enabling colleagues to become allies for their

peers

• celebrated World Mental Health Day by

facilitating a virtual session in conjunction with

Mind to highlight and discuss mental health in

the workplace.

Mbrace

• celebrated Black History Month with colleagues

being joined by black artists and poets from the

local community and raising funds for Sickle

Cell Society

• celebrated Diwali raising awareness of how

our colleagues mark this special occasion,

and collecting funds for Great Ormond

Street Hospital

• marked other occasions throughout the year,

including Eid, Rosh Hashanah, South Asian

Heritage Month, Vaisakhi, Holi, and Lunar

New Year

• focused on educating and awareness-raising

by distributing huddle packs on key events to

colleagues in our AMAZE Direct call centres

and stores.

Mfamily

• collaborated with Working Families to help

identify opportunities to offer even better

support to parents, carers, and families

and set us apart as an employer of choice

• along with WOW, held an event for colleagues

to hear from speakers inside and outside

Metro Bank about their experiences of being

a working parent

• focused on celebrating families of all shapes

and sizes, promoting career progression for

parents/carers and working towards improving

family-related policies

• held a number of neurodiversity coffee chats

to enable colleagues to share their own

experiences and support one another

• launched the Back to Work Buddy scheme to

support colleagues who return to work after

family leave and hosted a career and

networking event.

WOW

• renewed membership to the Menopause

Friendly Employer scheme and Women in

Finance charter

• ran mentoring circles, for which a record

number of colleagues signed up, supporting

colleagues with their personal and

professional growth

• invited all colleagues to ‘Wear It Pink’ Day in

October, with colleagues across the Bank

taking part and raising £1,500 for Breast

Cancer Awareness.

Mpride

• led Pride celebrations with a virtual Pride

parade which was open to all colleagues

• focused on intersectional collaboration across

all inclusion networks, creating self-service

educational material to promote allyship

and raise awareness of LGBTQ+ issues

• supported LGBTQ+ charity ‘LGBT Hero’ with

fundraising and volunteering opportunities.

Mforces

• supported colleagues on London Poppy Day

alongside the Royal British Legion

• facilitated the resigning of the Armed Forces

Covenant, demonstrating our commitment to

supporting those who have served.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Environmental, social and governance review continued

Gender pay gap

We believe it is important that our team reflects the

diverse communities we serve. We continue to

make progress in tackling our gender pay gap with

both mean and median pay gaps decreasing over a

three-year period to 15.9% and 15.7% respectively.

The main driver for the pay gap exists due to a

disproportionate number of women in senior

positions.

As at 5 April 2024

15.7%

median pay gap

15.9%

mean pay gap

Read more on our gender pay at

metrobankonline.co.uk

% Females in

SLT (ExCo -1)

Female colleagues as

% of the workforce

Female Directors

on the Board

2024 27%

2023 36%

2024 46%

2023 46%

Industry 47%

2024 37%

2023 38%

Industry 35%

Governance

and resilience

Alignment to

UN SDGs:

We have always had zero tolerance for bribery and

corruption. We continue to deliver regular training

to all colleagues on our Anti-Bribery and Corruption

Policy and they are encouraged to raise any

concerns about the conduct of others or the way

the business is run, without fear of unfair treatment

under our Whistleblowing Policy.

We comply with all applicable sanctions regimes,

UK anti-money laundering and anti-terrorist

financing legislation and have an implementation

framework in place. We do not give or receive

improper financial or other benefits in our business

operations, nor do we help facilitate tax evasion in

any way. We do not tolerate any deliberate breach

of financial crime laws and regulations that apply to

our business and the transactions we undertake,

and we continue to invest in our processes,

systems and monitoring.

Data privacy and security

Keeping our customers safe from fraud and scams

is naturally one of our highest priorities. Our ‘scam

of the month’ series informs people on how to

protect themselves against the latest scams used

by the fraudsters. There have been changes this

year to support scam victims and this has led to

improvements with detection and reimbursing our

customers. We continue to be supporters of the

Take Five fraud awareness campaign and have

been working with Meta/Facebook to help reduce

the fraudulent accounts on their platforms.

Safe management of personal data is taken

seriously and remains a priority for us. In 2024,

we focused on responding to an increase in

data subjects exercising their rights, while

supporting the Bank to reduce operational costs

of data management.

Recognising the ever-evolving nature of cyber risk,

we continue to run a strategic programme that

focuses on our capabilities keeping pace. We

constantly monitor for emerging threats and new

attack methods as well as strive to improve our

response capabilities, all of which support

operations and resilience. We have a vulnerability

management process in place that we aim to

adapt and improve as external and internal

changes occur. Our comprehensive policies

and standards align to ISO 27001 best practice,

and we benchmark ourselves against the National

Institute of Standards and Technology framework.

We are active members of a number of industry

forums and provide awareness campaigns to

colleagues in addition to annual mandatory cyber

security training.

25Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Our suppliers

It is important to us that we work with suppliers

who uphold our values. We take this seriously –

starting when we select a supplier during our

procurement processes and running throughout

the entire life-cycle of our business relationships.

In 2022, we launched our first Supplier Code of

Conduct, setting out the expectations we have of

our suppliers. In 2025, we will introduce an annual

review cycle of the code of conduct to ensure it

aligns to our business priorities.

We remain committed to using the Financial

Services Supplier Qualification System (FSQS) for

our suppliers to share information with us and we

encourage all our suppliers to become members.

FSQS helps our suppliers by reducing duplication

of effort in responding to buyer due diligence

requests and benefits us by sharing resources. We

have made great progress through 2024, inviting a

number of our suppliers who have not previously

been part of FSQS to join.

FSQS includes a subset of ESG questions and we

are using this information to inform conversations

with our suppliers about their ESG approach during

our regular governance. This information is also

reviewed as part of our sourcing processes when

selecting new suppliers to work with.

Our pledge to be net zero for operational, supply

chain and financed emissions by 2050 will require

us to work even more closely with our suppliers on

this topic going forwards. In 2025, we will define

the metrics that we will be using to track progress

towards this goal.

Human rights

In line with our brand ethos, we are committed

to maintaining positive relationships with our

stakeholders including conducting our business in

a way that respects human rights. Our policies and

practices reflect this, including our Whistleblowing

Policy which applies to any information relating

to suspected wrongdoing or dangers, and our

detailed Modern Slavery Policy.

Slavery, servitude, forced labour and human

trafficking (modern slavery) is a crime and a

violation of fundamental human rights. We have

zero tolerance of modern slavery and remain

committed to conducting all of our business

activities professionally, fairly and with integrity

across all of our relationships, including enforcing

appropriate systems and controls to ensure, on a

risk basis, that modern slavery is not taking place

in our business or supply chains.

During 2024 we:

• published our eighth Modern Slavery Statement,

approved by the Board and signed by

the CEO (available on our website at

www.metrobankonline.co.uk/about-us/

modern-slavery/)

• delivered the seventh report of the Modern

Slavery Champion to the Board. The report

included an update on the progress against

the Modern Slavery Statement and Action Plan,

and an update on our internal Modern Slavery

Working Group.

We continue to leverage the FSQS to support due

diligence on suppliers before contracting and on

an ongoing basis.

In 2024, we engaged 1845 active third parties.

0.65% were either based in riskier countries

(where the 2023 Global Slavery Index score, an

independent assessment of government progress

toward UN Sustainable Development Goal 8.7, is

less than 50) or were more likely to be exposed to

modern slavery risk due to the nature of the services.

In accordance with our Modern Slavery Policy,

further investigation was conducted, following

which all suppliers demonstrated adequate

controls to mitigate modern slavery risk.

We continue to support our suppliers in relation to

the risk of modern slavery, to clearly explain our

approach to modern slavery and our expectations

of our suppliers. We require suppliers to comply

with the Modern Slavery Act 2015 and to ensure

that modern slavery is not taking place in their

business or supply chains.

All colleagues were required to undertake modern

slavery computer-based training during 2024.

Political neutrality

Metro Bank is and will remain politically neutral

and it is not our policy to open or close an account

due to the political or personal beliefs of an

individual or organisation.

Taxation

We recognise the benefits to society that arise

from full participation in the tax system. As with

everything we do, we are committed to acting with

integrity and honesty as set out by the tax strategy,

policies and practices we adopt.

We made a total tax contribution in 2024 of

£130.2m, which comprised of £69.9m of taxes we

paid and £60.3m of taxes we collected on behalf of

the government. Taxes paid in the period represent

a direct cost to us and are either, charged to our

income statement, or capitalised as part of an

asset’s cost. Taxes collected are generated by the

Bank’s business activity and are part of our indirect

contribution to tax revenues. These are the taxes of

employees and customers collected during the

period in the usual course of business and

administered on behalf of the UK government.

Further information can be found in our Tax

Strategy document available on our website at:

www.metrobankonline.co.uk/globalassets/

documents/customer_documents/personal/2024-

tax-strategy.pdf

Environmental, social and governance review continued

Taxes paid (2024)

£m %

1. Irrecoverable VAT

and customs duty 37.6 53.8

2. Employer NICs 21.5 30.8

3. Business rates 8.9 12.7

4. Corporation tax – –

5. Land transaction taxes 1.7 2.4

6. Other tax 0.2 0.3

Taxes collected (2024)

60.3m

£m %

1. PAYE 40.1 66.5

2. Employee NICs 9.1 15.1

3. Net VAT 11.1 18.4

69.9m

Metro Bank Holdings PLC Annual Report and Accounts 2024

Operational emissions road map tCO

20302023 20242022202120202019

Scope 1 Scope 2

500

1000

1500

2000

2500

3000

3500

4000

Environmental, social and governance review continued

Our planet

Alignment to

UN SDGs:

We continue to work to reduce the impact of our

operations on the environment. Climate change is a

risk both to the Bank and the communities we

serve – managing this risk, and helping our

colleagues, suppliers, customers and communities

also to do so is a key part of our ongoing

commitment to being a responsible bank.

In recognition of this, we have committed to two

headline pledges to reduce our carbon footprint:

• to achieve net zero across Scope 1 and Scope 2

emissions by 2030

• to achieve net zero across Scope 3 emissions

by 2050.

Our Scope 1 and 2 emissions have reduced by 96%

from our baseline level in 2019, evidencing strong

progress towards achievement of our 2030

pledge. We have identified the key sources driving

our residual emissions and continue to assess

opportunities to mitigate these ahead of 2030.

We are committed to following the carbon

mitigation hierarchy and will continue to prioritise

prevention, reduction and substitution of our

residual emissions, with the remainder being offset

via the purchase of high-quality carbon removals.

Our stores and offices continue to be assessed

and reviewed to ensure that energy efficiency

and wider environmental considerations are

incorporated into the ongoing management

of our estate. As we grow and expand into new

communities, we will build these considerations

into the plans for our new stores.

In 2024, we engaged a third party to conduct an

energy audit to identify opportunities for energy

efficiency across our estate and in 2025 will submit

an Energy Action Plan to the UK Government in line

with the requirements of the Energy Savings

Opportunity Scheme. We do not have any

operations based in high biodiversity habitats.

Since 2020, we have sent zero waste to landfill.

We source supplies from renewable sources and

recycle where possible. We donate surplus office

furniture to local charities, reducing the amount of

material being disposed of in addition to preventing

the carbon emissions that would arise from

purchasing equivalent new equipment.

This year, we have made another full disclosure of

our corporate environmental data via the Carbon

Disclosure Project, having made our first full

disclosure in 2023.

We do not lend directly to businesses that

undertake:

• metal ore mining, coal mining; peat, oil

or gas extraction

• fossil fuel power generation

• activities that cause deforestation

• arms manufacture or military activities.

The table below sets out our GHG emissions.

2024 2023 2022 2021 2020 2019

Scope 1 emissions 122 469 179 336 67 319

Scope 2 emissions (location based) 2,532 2,705 2,855 3,327 3,799 4,247

Scope 2 emissions (market based) 32 – – 1,194 729 3,256

Scope 3 emissions (core)

1,181 1,335 1,397 n/a n/a n/a

Scope 3 emissions (all) 72,670 111,205 129,363 155,182 190,333 248,979

Total GHG emissions (location based) 75,324 114,379 132,397 158,845 194,199 253,545

Total GHG emissions (market based) 72,824 111,674 129,542 156,712 n/a n/a

Full-time equivalent colleagues (FTE) 3,449 4,281 4,040 4,184 3,850 3,555

Total emissions per FTE 21.1 26.1 32.8 38.0 50.4 71.3

1. This measure covers emissions arising from purchased paper (Cat. 1), Fuel and energy related activities (Cat.3), Waste Generated in Operations (Cat.5) and Business Travel (Cat. 6).

Quoted emissions figures are quoted in tCO

27Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Reporting requirement Where to find further information for an understanding of our business and

our impacts, including outcomes of our activities

Relevant policies and standards that govern our approach (please see policy

list on pages 29 to 30 for a description of each policy)

Environmental

matters

Page 27 – Our planet.

Page 32 – Task Force on Climate-related Financial Disclosures.

• Climate Pledges.

• Supplier Management.

• Business and Commercial Lending.

Colleagues

Page 21 – Our colleagues.

Page 25 – Gender pay gap.

Page 59 – Letter from the Designated

Non-Executive Director for Colleague Engagement.

Page 103 – Annual report on remuneration.

• Diversity and Inclusion.

• Recruitment and Selection.

• Health and Safety.

• Whistleblowing.

• Conflicts of Interest.

Social matters

Page 22 – Our customers and communities.

Page 25 – Data privacy and security.

Page 25 – Governance and resilience.

Page 27 – Our planet.

• Climate Pledges.

• Supplier Management.

• Business and Commercial Lending.

• Vulnerable Customers.

• Data Protection.

• Anti-Tax Evasion.

• Anti-Money Laundering/Counter Terrorist Financing.

• Business Continuity.

• Complaints.

Human rights

Page 22 – Our colleagues.

Page 25 – Gender pay gap.

Page 59 – Letter from the Designated

Non-Executive Director for Colleague Engagement.

Page 103 – Annual report on remuneration.

• Modern Slavery.

• Outsourcing.

• Diversity and Inclusion.

Anti-bribery

and corruption

Page 25 – Governance and resilience.

Page 144 – Financial crime risk.

• Anti-Bribery and Corruption.

Non-financial information and sustainability information statement

This statement is prepared in compliance with sections 414CA and 414CB of the Companies Act 2006 and explains where you can find further information about how we do the right thing in relation to our customers,

communities, colleagues and the environment. A description of our business model and strategy, as well as the non-financial KPIs relevant to our business can be found on pages 10 to 13.

Environmental, social and governance review continued

Metro Bank Holdings PLC Annual Report and Accounts 2024

Policy Description ESG priorities

Anti-Bribery and Corruption

The policy outlines our approach to managing the risk of bribery and corruption and to ensure we conduct business in an honest and ethical way,

with a zero-tolerance approach to bribery and corruption.

Anti-Money Laundering/

Counter Terrorist Financing

The policy sets out the systems and controls to identify, assess, monitor and manage financial crime risks and the procedures in place to assess their

effectiveness.

Anti-Tax Evasion

The policy sets out our zero-tolerance approach to facilitating tax evasion.

Business Continuity

The policy makes sure we are able to continue delivering services to our customers at acceptable levels if something unexpected were to happen.

It addresses impacts to the continuity of critical business activities in the case of man-made disasters, natural disasters or other material events.

Change Risk Management

The policy sets out the principals with which the Bank manages the risk of failing to meet planned delivery objectives, desired outcomes, or causing

detriment to existing services/customers whilst implementing change.

Complaints

The policy is in place to ensure customer complaints are handled promptly and effectively, with a focus on fair outcomes for our customers and

meeting our regulatory obligations when things go wrong.

Conflicts of Interest

The policy provides consistent practical guidance to all relevant parties in relation to the identification, recording and maintenance of actual and

perceived conflicts of interest.

Data Management

The policy sets out our objectives and expectations in managing data and data governance practices. It makes sure that data is managed, governed,

accessed, protected, utilised and disclosed appropriately. It also focuses on the quality of key data elements and their ongoing maintenance.

Data Protection

The policy is in place to ensure we comply with our data protection obligations and have the adequate level of data protection as prescribed by the

General Data Protection Regulation.

Diversity, Equity

and Inclusion

The policy means that we treat our colleagues fairly. It sets out our commitment to having a diverse workforce which reflects our customer base

and to employment policies which follow best practice, based on equal opportunities for all colleagues.

Fraud

The policy sets a consistent approach to the deterrence, detection and prevention of internal and external fraud.

Health and Safety

The policy protects our customers and colleagues. It recognises our statutory duties and responsibilities under the relevant Health and Safety

and Welfare legislation.

Information Security

and Acceptable Use

The policy sets objectives, expectations, roles and responsibilities and requirements for protecting both our and customer information and the use of

IT assets.

Policy list

Environmental, social and governance review continued

Key

Our customers and communities

Data privacy and security

Governance and resilience

Our colleagues

Our suppliers

Our planet

29Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Policy Description ESG priorities

Lending and Arrears

Management (including

Retail, Business and

Commercial Lending)

These policies set our approach to making lending decisions in a structured, consistent and fair way that is compliant with all relevant regulatory

requirements. They define the way we safeguard both ourselves and our customers in pursuit of our goals and how we support our customers during

periods of financial difficulty.

Modern Slavery

The policy describes our approach towards preventing slavery, servitude, forced and compulsory labour and human trafficking in any of our

operations or at any of our suppliers and, through them, our supply chains.

Physical Security

The policy protects our customers and colleagues. It defines the measures to protect our premises from security threats and to ensure the personal

safety and security of all customers, colleagues and visitors.

Procurement and

Supplier Management

The policy ensures that when we rely on an external supplier for key processes and activities, we take the reasonable steps to identify, monitor and

mitigate the external supplier risks.

Product Governance

The policy sets requirements to ensure products and services are developed to address customer needs, have a defined target market, are designed

to deliver good customer outcomes and are understood by customers.

Records Management

The policy sets out our objectives and expectations for managing records responsibly and efficiently from creation to disposal, complying with legal

and regulatory obligations.

Recruitment and Selection

The policy relates to all recruitment-related activities and is relevant for all colleagues and any third-party recruitment partners. The policy outlines

responsibilities for hiring aligned to our Company objectives/ethos and in accordance with the relevant legislation and regulation.

Regulatory Reporting

and Disclosure

The policy set out the principles, governance and control considerations required for accurate, complete, and timely regulatory reporting.

Sanctions

The policy sets the requirements and approach to managing financial sanctions risks in compliance with applicable sanctions regimes including the

prevention, detection and investigation of potential sanctions evasion.

Share Dealing

The policy sets out the approach and process relating to dealing in Metro Bank shares by the Board, colleagues and, where appropriate, third parties.

Technology

The policy sets our approach to the management of technology and associated risks across each of the delivery channels, to support our strategic

objectives and deliver good customer outcomes.

Vulnerable Customer

The policy sets out our approach to identifying and interacting with vulnerable customers to ensure we deliver good customer outcomes.

Whistleblowing

The policy encourages colleagues to disclose information, in good faith and without fear of unfair treatment, when they suspect any illegal or

unethical conduct or wrongdoing affecting us.

Environmental, social and governance review continued

Key

Our customers and communities

Data privacy and security

Governance and resilience

Our colleagues

Our suppliers

Our planet

Policy list continued

Metro Bank Holdings PLC Annual Report and Accounts 2024

Section 172 statement

Stakeholder engagement is essential to the execution of our purpose to

empower customers and communities with a human approach to banking.

Our six key stakeholders:

Our customers Our colleagues Our communities Our investors Our regulators Our suppliers

Our business model is

predicated on attracting

customers and turning them

into FANS. Our reputation and

creating FANS is at the core

of our values.

As a growing business, we need

to attract new talent. We also

want to ensure our colleagues

are happy and engaged so that

they provide excellent service

to each and every customer.

We are proud to be an integral

part of the communities

we serve.

We engage openly and

transparently with our investors

who help us to grow.

Following our regulators’

principles, rules and guidance

helps us to put customers at the

heart of everything we do.

We pride ourselves on doing

the right thing, and maintaining

the highest values in everything

we do, and this extends to the

suppliers we work with.

The Board must act in accordance with the duties

set out in the Companies Act 2006 (‘the Act’).

Under section 172 of the Act, the Board has a duty

to promote the success of the Company for the

benefit of its members as a whole. When making

decisions, the Board ensures that it acts in the way

it considers, in good faith, would most likely

promote success for the benefit of our members,

and in doing so has regard to the matters set out in

Section 172(1) of the Act.

The different needs of stakeholders are considered

throughout the whole decision-making process.

The Board, at all times, has regard to the impact of

material decisions on the different stakeholder

groups. However, it is not always feasible to provide

pragmatic outcomes for all stakeholders and the

Board, at times, has to make decisions based on

the competing priorities of stakeholders and the

needs of the Bank. More information on the key

decisions made by the Board in the year and how

stakeholders were considered can be found on

page 54.

S.172 factor Relevant disclosures Pages

(a) the likely consequences of any

decision in the long-term

• Our purpose and strategy framework

• Business model

• Strategic priorities

• Risk report

2–3

10–13

121–150

(b) the interests of the

Company’s employees

• Non-financial information statement

• Our colleagues

• Board activity and stakeholder engagement

• Letter from the Designated Non-Executive Director for Colleague Engagement

22 and 56

54–58

59–60

business relationships with

suppliers, customers, and others

• Board activity and stakeholder engagement

• Environmental, social and governance review

• Our suppliers

54–58

19–30

(d) the impact of the Company’s

operations on the community

and the environment

• Board activity and stakeholder engagement

• Task Force on Climate-related Financial Disclosures

• Environmental, social and governance review

54–58

32–41

19–30

(e) the desirability of the Company

maintaining a reputation for high

standards of business conduct

• Whistleblowing

• Anti-bribery and corruption

• Audit Committee report

• Modern slavery

25, 28 and 144

66–70

26 and 70

(f) the need to act fairly between

members of the Company

• Board activity and stakeholder engagement

• 2024 AGM

• Share capital

54–58

118

31Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

During 2024, we built upon the progress made in previous years by further enhancing and embedding our

approach to the management of climate-related risks across both our governance structure and the

wider risk management framework, as well as making positive strides on our data and metrics. There

remains work to do to further enhance our transition planning, including more granular assessment of the

impact of climate-related risks and opportunities on our businesses, strategy, and financial planning, as

well as continued evolution of the coverage and application of climate-related metrics as our capabilities

and methodologies mature.

Task Force on Climate-related Financial Disclosures

This section of our annual report includes our climate-related

financial disclosures, consistent with the recommendations

of the Task Force on Climate-related Financial Disclosures,

providing an update on our current progress and areas of

future focus.

Key points Future developments Page

Governance

Describe the Board’s oversight of climate-related risks and opportunities.

• The Board retains oversight for all climate-related risks and opportunities and has received an

annual update on our progress in this regard in 2024.

• The Risk Oversight Committee has oversight of the framework for managing and reporting on

climate-related risks in line with our Enterprise Risk Management Framework.

• The Board will continue its regular oversight, engagement and challenge on climate-related strategy

and activity.

• Ongoing review of governance framework to ensure continued alignment with regulation and

industry-recognised best practice to ensure that an appropriate level of oversight of climate-related

risks and opportunities is in place.

19, 35

Describe management’s role in assessing and managing climate-related risks and opportunities.

• Overall responsibility for our approach to climate-related risks and opportunities sits with the

CEO and is devolved to relevant members of ExCo.

• Senior Management Function responsibility under the Senior Managers and Certification Regime

sits with the Chief Risk Officer for climate-related risks.

• Our Environment Working Group, reporting into the ESG Steering Committee, is accountable for

delivering our Net Zero strategy, bringing together stakeholders from across the business. In

2024 it has focused on building out the foundations of a multi-year roadmap, delivery of which

will be tracked through the ESG Steering Committee.

• Focus on enhancing our data and reporting on climate-related risks via key risk indicators to facilitate improved

management assessment of these risks via enhancements to data coverage, reporting and disclosures.

• In 2025, management will finalise the roadmap and continue to deliver the actions across workstreams

covering risk management and reporting, customer engagement, suppliers, colleague capability, customer

communications and brand.

19, 35

Strategy

Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term.

• Climate-related risks have been identified and assessed as part of a wider review of top and

emerging risks and embedded in the Enterprise Risk Management Framework. The most material

risk exposures were identified in Credit, Capital and Operational Risk and assigned potential time

horizons.

• Considerations covering risks and opportunities within our internal operations and our

engagement with stakeholders across our value chain are embedded in the ESG materiality

assessment for the organisation.

• Opportunities to support our customers in achieving their climate-related aspirations are

considered in the strategy review and product development process.

• Continue to assess and evolve our climate-related strategy in line with the Bank’s wider strategic objectives.

• Expand dialogue with customers on climate-related risks and opportunities to ensure we can both manage our

risk exposure and best support their transition to a low-carbon economy.

• Enhance data capture and quality to support identification, assessment and mitigation of climate-related risks

and opportunities and evolve risk capabilities, origination strategy and product suite accordingly.

35–36

Metro Bank Holdings PLC Annual Report and Accounts 2024

Task Force on Climate-related Financial Disclosures continued

Key points Future developments Page

Strategy continued

Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning.

• The potential impact of climate-related risks and opportunities on our strategy and financial

position continues to be considered on an ongoing basis.

• Further embedding of climate considerations in our strategic and financial planning processes, with

consideration of the necessary tools and methodologies to support delivery of the climate-related strategy.

35–36

Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.

• Climate-related stress testing is in place and continues to evolve in maturity. There is a credit

impairment overlay process established to cover climate-related risks.

• Scenario analysis insights are used to inform the Internal Capital Adequacy Assessment

Process and in financial reporting.

• Continued enhancement of our modelling capabilities, including integration of Network for Greening the

Financial System (NGFS) aligned scenarios developed with Moody’s into our scenario analysis activity.

36, 39

Risk management

Describe the organisation’s processes for identifying and assessing climate-related risks.

• Climate change has been embedded as a cause into the Enterprise Risk Management

Framework, together with frameworks, policies and standards for the relevant principal risks.

• To form a view on materiality and assess impacts across different time horizons, we assess

each principal risk to identify how climate change could manifest.

• Internal modelling capabilities are in place to assess the exposure of our lending portfolios

to climate-related risks. Mortgage portfolio data is monitored to understand material climate

risk drivers.

• Continue to develop methodologies to identify and assess climate-related risks.

• Enhanced coverage and quality of climate-related data and monitoring across risk types

and processes.

• Review of commercial customer population to identify high risk sectors, potential concentrations

and associated risks.

37–39

Describe the organisation’s processes for managing climate-related risks.

• We have integrated climate-related controls into our credit processes across both retail

and commercial lending, with credit assessments for in-scope commercial clients including

qualitative climate risk considerations.

• We engage closely with our material suppliers to ensure climate-related risks are identified and

appropriate controls put in place, as well as doing so as part of our RFP process.

• Extend climate scenario analysis to additional portfolios.

• Enhance capabilities for mortgage portfolio physical and transition risk data capture to enable enhanced

portfolio monitoring.

• Further development and embedding of climate-related controls.

37–39

Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management.

• Climate-related risks are fully embedded in our Enterprise Risk Management Framework

and Three Lines of Defence model, with associated governance structures and defined roles

and responsibilities.

• Continue to keep pace with evolving industry requirements around risk management, reporting, governance

and disclosures.

37–39

33Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Task Force on Climate-related Financial Disclosures continued

Key points Future developments Page

Metrics and targets

Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process.

• Climate-related metrics across our operations, supply chain and financed emissions are

reported on an annual basis via our climate-related disclosures.

• The properties securing our lending portfolios are assessed for flood and subsidence risk, as

well as EPC distribution.

• For financed emissions, intensity metrics covering the Bank’s residential and commercial

mortgage lending are disclosed, as is a weighted PCAF data quality score.

• Continued review and enhancement of our calculation methodologies for Scope 3 emissions across all

categories in line with industry best practice. This includes data enhancements to further improve PCAF

data quality levels and increase coverage of portfolio data as well as engagement with suppliers to increase

utilisation of activity based methodologies for assessing supplier emissions.

• Development of climate-related key risk indicators and further intensity metrics

for intra-year monitoring.

27, 39–41

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas emissions, and the related risks.

• Scope 1, 2 and 3 emissions are disclosed within the wider TCFD disclosure, with full disclosure

across all applicable Scope 3 categories. Methodological and data quality enhancements were

embedded across all Scopes in 2024.

• Continued enhancement of emissions calculation methodologies in line with industry

best practices.

• Define required data enhancements to extend calculation of financed emissions

to additional portfolios.

27, 39–41

Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets.

• We have two overarching net zero targets in place – to achieve net zero emissions across

Scope 1 and Scope 2 by 2030 and across Scope 3 by 2050.

• We have achieved emissions reductions of 96% across Scope 1 and 2 and 71% across Scope 3

from our baseline year of 2019.

• Continued monitoring of performance against these targets and development of interim milestones for

sub-categories across all Scopes.

27, 39–41

We have highlighted some key opportunities across different time horizons which we believe will help us to meet our 2030 and 2050 Net Zero pledges.

Short-Term Medium-Term Long-Term

Delivery of ESOS Energy Action Plan,

identifying opportunities to mitigate

Scope 1 emissions

Introduction of activity based assessment of supplier emissions for our most material

supplier relationships

Review of origination strategy, product proposition and asset mix

to support mitigation of financed emissions

Integration of Moody’s Macroeconomic

Climate Risk Scenarios into scenario

analysis activity

Sector and channel based review of climate related risks and opportunities Ongoing identification of new physical and transition risks

impacting our portfolio through scenario analysis

Review financed emissions calculation

methodologies for non-mortgage lending

Purchase of high quality carbon removal credits to mitigate residual Scope 1 and 2 emissions

Further enhance data capture capability

for employee commuting

Metro Bank Holdings PLC Annual Report and Accounts 2024

Whilst the changes associated with the transition

to a lower-carbon economy pose risks, they also

present significant opportunities for organisations

focused on climate change mitigation and

adaptation solutions.

We have an important role to play in facilitating the

transition to a low-carbon economy, leveraging the

opportunities, and managing the risks we are

exposed to from climate change.

We are committed to supporting our customers

along the journey as they make the transition

towards a low-carbon economy, and to enhancing

our own capabilities by identifying and managing

the potential impact of climate change on the

business, as well as exploring ways to reduce the

impact that the business has on the environment.

We recognise that climate change presents

both risks and opportunities to our business

model and strategy over short-, medium-

and long-term horizons:

• short-term (0-1 years): The time horizon for

annual financial planning

• medium-term (1-5 years): The time horizon

for strategic and financial planning cycles

• long-term (> 5 years): This timeframe is

considered using scenario analysis.

Governance

Board oversight of climate-related risks

and opportunities

The Board has ultimate accountability for all

climate change risk-related matters. During 2024,

the Board has been engaged in the development of

our approach, receiving an annual update on the

management of climate-related risks and

opportunities, as well as a broader annual ESG

update. The Board considers climate-related risks

and opportunities as part of the annual strategic

and financial planning process to ensure our

approach to these matters evolves in line with the

ongoing evolution of regulation, industry best

practice and capabilities. The Risk Oversight

Committee (ROC) has oversight of the framework

for managing and reporting the risks from climate

change, as set out in the Enterprise Risk

Management Framework. The Committee can

escalate any climate-related risk matter to the

Board. The Audit Committee approved the

approach to disclosures, in line with TCFD

requirements, and reviews climate-related financial

disclosures as part of its wider role in reviewing our

Annual Report and Accounts.

Management’s role in assessing

and managing climate-related risks

and opportunities

Responsibilities for the management of climate-

related risks extend across the organisation and its

‘Three Lines of Defence’. As climate risk impacts a

significant number of our principal risks, it requires

integration with existing control frameworks,

policies and strategies. The accountability for our

approach to ESG sits with the CEO and is devolved

to relevant members of ExCo. The Chief Risk

Officer has Senior Management Function

responsibility under the Senior Managers and

Certification Regime for our approach to managing

both financial and non-financial risks arising from

climate change, including:

• embedding the consideration of climate-related

risks into the governance structures

• incorporating the risks from climate change

into risk management practices

• using long-term scenario analysis to inform

strategy setting, risk identification and

assessment

• ensuring that climate-related risks are

appropriately disclosed in line with the

recommendations of the TCFD.

Executive Risk Committee

The Executive Risk Committee (ERC) has delegated

authority from ROC for overseeing our exposures

and approach to managing climate-related risks. In

2024, the Committee received an update on the

progress of our approach to managing climate-

related risks, including an overview of current

regulatory requirements and industry expectations,

their expected evolution over the next two years

and the implications for the Bank. An overview of

the controls mitigating credit-related aspects of

climate risk was included, as was an overview of

our existing data and reporting capabilities related

to financed emissions, benchmarking against peer

institutions and updates on our progress towards

our Net Zero goals.

Credit Risk Oversight Committee

The Credit Risk Oversight Committee (CROC) has

specific responsibility for oversight of climate-

related aspects of credit risk including

recommending strategies to adjust the credit risk

portfolio to react to changes in the prevailing

market or physical environmental conditions.

During the year, the Committee received updates

on the credit risk aspects of climate change,

including climate risk-specific analysis relating to

lending portfolios.

Asset and Liability Committee

The Asset and Liability Committee (ALCO)

oversees the effective management of the

Bank’s financial risks of capital, funding, liquidity

and market risk. The Committee considers the

impact, or potential impact, of climate change

within its assessment of holding adequate capital

and liquidity resources within the respective

planning horizons.

Task Force on Climate-related Financial Disclosures continued

Environment Working Group

The Environment Working Group brings together

key stakeholders from across the first and second

lines of defence to support work to help embed

climate risk into the Enterprise Risk Management

Framework and support our wider climate-related

goals and ambitions.

The Environment Working Group is accountable

for delivering our net zero strategy and objectives

across three strategic focus areas:

• managing the impact of climate change

on the business

• supporting our customers’ transition

to a low-carbon economy

• reducing the impact that the business

has on the environment.

The Environment Working Group has focused

on building out the foundations of a multi-year

roadmap across core business areas and risk

management disciplines. Delivery on the roadmap

is tracked through the Bank’s ESG Steering

Committee and enhancements to the roadmap

are informed by our ongoing analysis of risks

and opportunities arising from climate change.

This will help to accelerate progress and

prioritisation, particularly in relation to our

climate change response.

Strategy

2024 has been a pivotal year for the Bank, with

leadership setting out our strategic pillars for the

road ahead and colleagues delivering significant

levels of transformational change to set the

foundations for growth. As we progress through

this evolution, we will embed the assessment of

climate-related risks and opportunities in the

formulation of our strategic approach throughout

the business, whether in our own operations,

strategic partnerships and supplier relationships

or our financing activity.

35Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Task Force on Climate-related Financial Disclosures continued

Identifying and managing the impact of

climate change on the business

The ability to identify, understand and manage risk

is critical to our long-term strength and stability

and climate risk is no different in this regard.

Climate risk does, however, require us to address

risks that may manifest over a significantly greater

period than that covered by more traditional

approaches to risk management. We broadly

categorise climate risks into two types: transition

risk and physical risk. Within these broad

categories, we have identified a number of

potential impacts arising from climate change

which we monitor over the short-, medium- and

long-term.

Our initial focus has been to identify and assess

risks to the business. The assessment of climate

risks is embedded into our key risk process, with

controls in place across our lending activity and

internal operations. We utilise our internal climate

scenario analysis and stress testing capability in

line with emerging industry methodologies and

have used outputs from initial methodology

developments to formulate an initial impact

assessment to inform considerations in developing

our strategic response. The risks we face in the

medium term are primarily transition risks,

predominantly arising from developing regulatory

and legislative expectations. For example, potential

changes to minimum energy efficiency standards

applicable to the properties securing our lending

may lead to transition risks which could impact the

value of these properties or the ability of

borrowers to service debt.

Physical risks represent a longer-term risk

(primarily from changes in climate patterns

impacting the physical property securing our

mortgage portfolio) and the most material risks

are expected to crystallise over the long term.

Changes in extreme variability in weather patterns

are forecast to lead to increased incidence and

severity of physical risk events which, in addition

to the disruption felt by customers, can lead to a

decrease in the valuations of property taken as

collateral to mitigate credit risk.

Whilst the nature of our business model means we

are not heavily exposed to certain carbon intensive

industries, exposures to physical and transition

risks may arise within our commercial lending

portfolio due to changes in policy, consumer

preferences or technology. Our strategic pivot

towards corporate and commercial lending will

transform our portfolio, impacting both volumes of

lending and the channels/propositions through

which we deliver that lending to our customers.

The nature of our customer base may also evolve,

changing our proportional exposure to existing

sectors as well as introducing new ones. Through

2025, we will review our sectoral exposures to

identify higher-risk sectors as well as climate-

related risks and opportunities across the broader

portfolio. Additionally, we will further develop our

customer engagement model to ensure we are

well placed to understand our customers’ climate

related ambitions and ensuring we are supporting

them with the guidance and financing required to

help achieve their goals.

Operational risk exposures arise from physical

damage to key office locations and physical and

transition risks via key suppliers, which could result

in business disruption or increased costs. Our

strategic collaboration with Infosys represents

a significant milestone for the Bank and our

transformation journey. Climate considerations

were taken into account throughout the RFP

process and will continue to be as our collaboration

evolves. We will work with Infosys over the coming

months to more fully understand their own

commitments and progress in the climate space

and ensure these are closely aligned with our own.

We have worked with Moody’s to define two new

climate scenarios which align to a set of scenarios

developed by the NGFS. These scenarios will be

leveraged in 2025 to refine our approach to climate

change scenario analysis. As these methodologies

develop, we will be progressively drawing on our

scenario analysis to inform strategic planning;

providing insight into/for our strategy, business

model and financial plans. At present we do not

believe risk arising from climate change to have

had material impact on the financial statements.

Operations

We have made substantial progress in reducing

the impact of our direct operations on the

environment. We have maintained our position

of procuring 100% renewable electricity with full

backing by REGO certificates.

Waste levels have

reduced materially from our baseline year of 2019

and we are maximising recycling rates, as well as

diverting zero waste to landfills. In line with the UK

government’s Energy Savings Opportunity Scheme

(ESOS), we will deliver an Energy Action Plan in Q1

2025 outlining key actions to be taken across our

operational footprint and will consider how these

will be integrated into our wider climate roadmap.

The actions taken to date have helped us to achieve

an overall reduction of 96% across our Scope 1

and 2 emissions from the 2019 baseline, and this

keeps us strongly positioned to meet our stated

commitment of being net zero across Scope 1

and 2 by 2030. We have identified the activities

driving our residual Scope 1 emissions and have

considered the actions required to eliminate,

reduce or substitute them. Once these steps

have been taken, we will assess the level of

residual emissions and deliver our full net zero

pledge through the purchase of high-quality

carbon offsets derived from solutions which

are characterised by carbon removal, durable

storage and low risk of reversal.

1. 32 tonnes of market based Scope 2 emissions set out in the Emissions summary by Scope and Category table

on page 39 are derived from one site where we are a tenant and unable to verify the energy consumption and

tariff. We have assessed the consumption as the mean of all other stores and assumed a non-green tariff.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Task Force on Climate-related Financial Disclosures continued

Risk management

Identification and assessment

We classify climate-related risks as either physical

risks or transition risks. We are exposed to both

physical and transition risks arising from climate

change. Risks arising from climate change

materialise through various channels:

1) through the financial services and support we

provide to customers who may themselves be

exposed to the climate change

2) the operation of our own infrastructure,

business and premises which may be exposed

to both transition and physical risks

3) through a deteriorated perception of our brand

if we do not adequately support a transition to

a low-carbon economy.

To form a view on materiality, and to understand

the broad financial impacts across different time

horizons, the Enterprise Risk Management

Framework was assessed through a climate

change lens to identify how climate change could

manifest in each of our principal risks. Due to the

longer timeframes associated with climate

impacts, short-, medium- and long-term horizons

are being applied to the consideration of impacts.

This assessment has been included in the 2024

Internal Capital Adequacy Assessment Process

(ICAAP) and identified our top three climate change

risks as: credit, capital and operational. Credit risk

is the most material climate change risk due to our

mortgage portfolio exposures.

Our Risk Appetite Statement includes a qualitative

statement in relation to climate risk. In support of

this appetite, complementary quantitative key risk

indicators are being developed and will be

assessed with a view to integrating them into risk

appetite metrics, where appropriate. Metrics will

be further enhanced as data and capability evolves

and will leverage scenario analysis outputs.

Credit risk

Physical risk examples Transition risk examples Time horizon

Repayment challenges from obligors due to

reduced profitability or asset devaluation because

of climatic shifts.

Failure to adapt to changes in policy, regulation,

and technology resulting in negative impact to

customers.

Medium term to long term.

Mortgages

We have controls in place to mitigate against flood risk, subsidence, and

landslip in our residential mortgage portfolio. Where it is identified that a

property is situated on a flood plain, borrowing is only permitted where

a suitable insurance policy is in place. Specific requirements are in place

in relation to lending to buy-to-let properties which have an Energy

Performance Certificate (EPC) rating below E. In accordance with the

Minimum Energy Efficiency Standards Regulations, all buy-to-let

properties must have a minimum EPC rating of E.

All physical valuations must be completed by registered valuers to utilise

their local knowledge and expertise, including the assessment of physical

risks and climate-related information.

We receive open-source property data for our mortgage portfolio to

enhance our portfolio risk identification and monitoring processes.

We also review and evolve our secured lending policies and standards

in response to the external environment, regulation, investor and other

stakeholder interest.

Commercial lending

Our approach to commercial lending and collateral management incorporates

environmental risk considerations. We have additional credit risk assessment

requirements for customers operating in carbon-intensive industries. Our

Commercial Lending Policy also outlines the prohibited and restricted industries

where we have either no or limited appetite to lend.

A large proportion of our business lending customers are privately owned and/

or SMEs. Very few lending customers therefore report against voluntary

disclosure initiatives such as Carbon Disclosure Project, Sustainability

Accounting Standards Board or TCFD.

A top-down assessment of sectors (and sub-sectors) which may have a higher

likelihood of being impacted by transition risks has been performed. It highlighted

that our direct exposure to commercial lending segments with high emissions is

relatively low. We continue to enhance and refine this work at both counterparty

and sector level, considering both risks and opportunities as we look to support

our customers’ responses to climate change. The output will be used to inform

the evolution of our credit policies and risk appetite measures to monitor the

portfolio transition risk.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Capital and liquidity risk

Physical risk examples Time horizon

• Our capital position is indirectly subject to

climate risk through Bank-wide exposures

across all risk types.

• Longer-term climate change risks may

adversely impact our future revenue through

customer behaviour, balance sheet or strategy

changes over the longer term in response to

climate change risk factors.

• Market dislocation could also impact the value

or the ability to monetise liquidity buffers or

incremental client deposits run-off resulting

from transition risk drivers.

Medium term to long term.

Climate change risk has been considered as part of the 2024 ICAAP. This includes a qualitative

assessment of the potential financial implications of climate-related risk, namely transition and physical

risks. The ICAAP is a key planning process and facilitates the Board and senior management in

identifying, measuring and monitoring our risks and ensures that we hold adequate capital to support

our risk profile. Based on our current assessment the capital requirement is not considered to have a

material impact over the planning horizon at this time. Consideration of climate risk will continue to be

further embedded in key processes where investment decisions are made and the level of climate risk

being taken is material. The output of the climate scenario analysis and stress testing is used to inform

the understanding of how capital management may be impacted.

Climate risk and broader ESG considerations are now reflected in our liquid asset portfolio investment

strategy, with implications for securities that can be included in the Liquidity Pool. The 2024 Internal

Liquidity Adequacy Assessment Process (ILAAP) outlined the potential funding and liquidity risks that

may arise as a result of physical risks or transition risks.

The impacts of climate change will continue to be assessed within our prudential statements, namely

the ICAAP and ILAAP.

Operational risk

Physical risk examples Time horizon

Business interruptions due to extreme weather

events and damage to facilities. Disruptions in

supply chain.

Medium-term to long-term

Transition risk examples

Increased operating costs for facilities and higher

capital expenditures for resiliency and carbon

reduction measures.

Climate change is embedded as a cause within the Enterprise Risk Management Framework and our

principal risks are assessed through a climate lens. All loss events are recorded in our incident

management system, enabling the identification of climate-related risk events.

Scenario analysis is performed to assess the potential effects of climate-driven events including

disruption to business services, damage to physical assets, and health and safety. Physical risk data has

been obtained in relation to key data centres and office/store locations to support our assessment of

future risk. The results of the scenario analysis are used to plan, prepare and respond to potential

disruptions. There are also plans in place to help resume business operations as quickly as possible in

the aftermath of an extreme climate event to minimise operational disruptions.

We take steps to integrate climate change considerations into our procurement and supply chain

management processes, including exploring different methods to collect environmental performance

data from third parties. More broadly, the Operational Resilience programme outlines the

requirements (including requirements of suppliers) to respond to business disruption.

We will continue to identify, manage and disclose material climate-related risks and their impacts on

our strategy and financial planning, in line with the TCFD framework.

Task Force on Climate-related Financial Disclosures continued

Metro Bank Holdings PLC Annual Report and Accounts 2024

Response

Climate change has been embedded as a cause

into the Enterprise Risk Management Framework,

together with the frameworks, policies and

standards for these principal risks. For credit risk,

we have also integrated climate risk considerations

into both the Business and Commercial Lending

Policy and the Collateral Management Policy to aid

the embedding, management and monitoring of

climate change risk as a cause to our credit risks.

Scenario analysis

As the understanding and importance of climate

risk progresses, climate scenario analysis is

becoming an essential capability and risk

management tool. Scenario analysis assists the

identification, measurement and ongoing

assessment of climate risks over the longer term,

and the potential threats to our strategic objectives.

Throughout 2024, we have used the analysis from

the Biennial Exploratory Scenario work conducted

in 2021, leveraging the results of that analysis

in the corresponding period and using this to

inform a Post Model Adjustment (PMA) which is

incorporated within our IFRS 9 ECL calculation.

In addition, a Climate Risk scenario was formally

assessed as part of the 2024 ICAAP, reviewing the

potential impact of an extreme weather event

causing prolonged physical damage to our stores

and a breakdown in the transport infrastructure

servicing the stores. Outcomes from these pieces

of analysis have indicated that we are considered

to have sufficient capital to withstand the losses

associated with the climate scenarios that have

been assessed. As this capability is established and

further developed, the assessment will be run on

an ongoing basis to inform scenario planning and

monitoring of the portfolio composition to ensure

no undue concentrations. The results of the

scenario analysis will be used to support the

evolution of origination strategies in line with our

overarching strategic objectives and risk appetite

to factor in climate change risks and opportunities.

It will also inform product opportunity assessment

and help to identify areas where we could best

support customers’ transition to improved energy

efficiency or reduction in exposure to physical risks.

Metrics and targets

Our climate change metrics are anchored to

our commitment to achieve Net Zero across our

Scope 1 and 2 emissions by 2030, and across all

Scopes by 2050. Our emissions data for 2024 is

disclosed in the summary table below, outlining

year-on-year changes as well as overall progress

from our 2019 baseline.

In 2024, we have taken positive steps to enhance

our metrics, particularly with regards to our

financed emissions. For the first time, we have

included emissions intensity metrics and a

weighted PCAF Data Quality score covering our

retail and commercial mortgage portfolios, have

disclosed our EPC profile for commercial property

and our unmatched EPC profile across both

commercial and residential portfolios, as well as

including data on subsidence risk for property

securing our lending. For supplier emissions, we

have transitioned to use of DEFRA Environmentally

Extended Input-Output (EEIO) model conversion

factors, allowing us to more accurately categorise

supplier spend and derive emissions. Additionally,

Task Force on Climate-related Financial Disclosures continued

Emissions summary by Scope and category

Emission Scope Category 2024 % change PY 2023

Scope 1 Fuels (transport) 22 7 20

Gas 82 14 71

Fugitive 19 (95) 378

Total 122 (74) 469

Scope 2 Electricity (market) 32 – –

Total Scope 1 & 2 154 (67) 469

% change from 2019 baseline (96) – (87)

Scope 3 Cat 1: Purchased goods & services 36,737 (33) 54,986

Cat 2: Capital goods 1,131 (48) 2,155

Cat 3: Fuel & energy activities 853 (6) 903

Cat 4: Upstream transportation 301 (19) 371

Cat 5: Waste 13 36 9

Cat 6: Business travel 272 (36) 423

Cat 7: Employee commuting 3,641 (19) 4,495

Cat 9: Downstream transportation 73 (36) 114

Cat 15: Investments 29,650 (38) 47,749

Total Scope 3 72,670 (35) 111,205

% change from 2019 baseline (71) – (55)

Total GHG emissions 72,824 (35) 111,674

% change from 2019 baseline (71) – (55)

Emissions figures are quoted in tCO

e and rounded to the nearest whole number (whilst % change is calculated on un-rounded figures).

For Scope 3 emissions, categories 8 and 10-14 are assessed not to apply to our operations at this time and are therefore excluded from our analysis.

we have transitioned the calculation of supplier

emissions for water and paper from spend-based

to activity-based, further enhancing the accuracy

of emissions calculations.

As our approach to transition planning continues

to evolve, we will embed further metrics and

develop interim targets across key Scope 3

categories, driven by both our data capabilities

and our understanding of the climate risks

and opportunities within our operations and

lending activities.

39Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Operational emissions

Greenhouse gas (GHG) reporting is undertaken in

line with our obligations under the Companies Act

2006 (Strategic Report and Directors’ Report)

Regulations 2013, and the Streamlined Energy

and Carbon Reporting regulations 2019. GHG

emissions are reported in accordance with the

GHG Protocol, which sets a global standard for

how to measure, manage and report emissions.

We report GHG emissions in accordance with the

operational control approach. Limitations in the

emission data relate to employee commuting,

where data for all individuals was not available;

and one site where we are a tenant and unable

to verify the energy consumption and tariff.

For employee commuting the average population

values were used to perform the calculation

and for energy consumption we have utilised

the mean consumption of all other stores and

assumed a non-green tariff.

We have seen a significant overall reduction in our

Scope 1 emissions this year, primarily driven by a

95% reduction in fugitive emissions (those derived

from refrigerant and coolant leaks in our HVAC

systems) and partially offset by small increases

in gas consumption from our Stores and fuel

consumption from our vehicle fleet. The ESOS

Energy Action Plan to be submitted in 2025 will

identify opportunities to mitigate the emissions

arising from both the gas and fuel consumption,

as well as identifying opportunities to increase the

efficiency of HVAC systems such that fugitive

emissions are reduced both in terms of overall

volume and volatility. We do acknowledge that

fugitive emissions will remain present in our Scope

1 profile and as we progress towards achievement

of our 2030 commitment, we will utilise high-

quality carbon offsets derived from solutions

characterised by carbon removal, durable storage

and low risk of reversal. Overall, we have achieved

a reduction of 96% in Scope 1 and 2 emissions from

our baseline year of 2019 and are well-positioned

to achieve our 2030 net zero commitment for

Scopes 1 and 2.

All electricity procured by the Bank across our

operations is 100% renewable and backed by

REGO certificates, Our location-based emissions

are reduced by 40% from our 2019 baseline,

reflecting a reduction in energy consumption

across our estate over this period.

We recognise that our climate impact extends

beyond emissions arising from fuel consumption

and electricity across our direct operations and

that we have a responsibility to understand and

address emissions across our wider value chain.

Therefore, we have measured our Scope 3

operational emissions in 2024 as set out in the

summary table. To enhance our reporting, we have

broken down our Scope 3 emissions into their

underlying categories. In addition to tracking

the emissions for buildings, water and waste

consumption are measured across our sites. We

have continued to see a reduction in emissions

from these sources both year on year and from our

baseline in 2019. We have also seen concurrent

reductions in paper usage covering both our direct

consumption and downstream distribution of

paper through customer communications.

Supplier Emissions

Emissions arising from the goods and services

procured from third parties currently represent

the largest individual contribution to our emissions,

accounting for 50% of our total. Emissions are

currently calculated using a spend-based

methodology, based on DEFRA EEIO conversion

factors which are assessed at a sectoral level. The

exceptions to this are water and paper, which are

calculated using an activity-based methodology.

As our engagement with suppliers on ESG evolves

(as outlined in the ESG report), we will improve our

ability to expand the scope of our activity-based

calculations, further improving the assessment of

supplier emissions. In 2025, we will leverage our

strategic partnership with Infosys to define and

implement activity-based metrics to track our

supplier’s progress towards Net Zero and utilise

these to assess our own supplier emissions,

extending these metrics across our top 5 suppliers

(by spend).

Financed emissions

We remain fully committed to our pledge to make

our financing activity and value chain net zero by

2050 to achieve alignment with the 2015 Paris

Agreement. Financed emissions are absolute GHG

emissions that we finance through our lending and

investment activity.

For 2024, we have calculated financed emissions

from our residential mortgage portfolio (both

organic and acquired) and residential and

commercial buy-to-let portfolios. In line with last

year, we have followed the industry-standard PCAF

methodology for calculating financed emissions,

however improvements in our underlying data have

allowed us to use property-level EPC and floor area

data for 77% of our residential portfolio and 53% of

our commercial portfolio (by volume), achieving a

weighted PCAF Data Quality score of 3.4 and 3.9,

respectively. This has allowed us to more

accurately assess our financed emissions from

these properties. Whilst the notable reduction in

financed emissions can be in large part attributed

to the reduction in overall balances driven by the

£2.5 billion mortgage portfolio sale to NatWest, the

data enhancements made this year and the

consequent ability to more accurately measure

financed emissions has been a contributing factor.

The introduction and continued development of

emissions intensity metrics and targets is critical

to tracking our performance against our climate

goals, particularly as the Bank continues through

its transformation and growth in lending activity

accelerates. With overall balances projected

to increase, it is reasonable to expect that our

absolute financed emissions could exhibit a

concurrent increase. Key to our transition planning

and achievement of our 2050 goal will be ensuring

that lending activity across portfolios and channels

is assessed for climate risk exposure and there is

ongoing engagement with customers to support

their transition to a low-carbon economy, ultimately

ensuring emissions intensity is diminishing in the

medium-to-long term.

Task Force on Climate-related Financial Disclosures continued

In 2025, we will assess how to best extend EPC

and floor area data across the unmatched portfolio

as well as the necessary enhancements to elevate

our PCAF Data Quality score across the overall

portfolio. We will also explore the methodologies

and data enhancements required to extend our

analysis of financed emissions to other lending

portfolios, utilising PCAF guidance and

methodologies, where available, to gain more

comprehensive insight into the impact of our

lending activity.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Portfolio Metrics

The use of EPC data has informed our

understanding of the potential impact of transition

risk on the property portfolio securing our

residential and commercial mortgages. EPC ratings

of the mortgage portfolio are monitored to provide

a view on the energy efficiency of the housing

stock securing our lending. The table alongside

shows a summary of EPC ratings on our mortgage

book as at the end of 2024, covering both

residential and professional buy-to-let.

Approximately 77% of mortgaged properties in

the residential portfolio and 53% in the commercial

portfolio have been matched to an EPC rating,

with the most common EPC rating in our mortgage

book being D.

Approximately 42% of the residential portfolio

and 45% of the commercial portfolio are currently

rated EPC C or better on an interpolated basis,

broadly aligned with the UK property EPC register

at 43%.

Physical climate risk data was matched for 95%

of the properties in the portfolio, with the

incremental impact of river, coastal and surface

flooding assessed to 2050, and subsidence risk

assessed through to 2070. The assessment

shows that the flood risk of the properties in our

mortgage portfolio is broadly in line with the

national average and slightly elevated for

subsidence, reflecting our concentration in the

Southeast of England. Our scenario analysis results

suggest physical risks arising from climate change

should have a low impact on our mortgage

portfolio over the next 30 years.

Improbable Possible Probable

Subsidence Risk Metro UK Metro UK Metro UK

Residential Risk in 2030 63.69% 80.50% 13.60% 8.50% 22.54% 10.60%

Risk in 2070 53.34% 72.30% 10.53% 8.40% 35.96% 19.00%

Commercial Risk in 2030 70.13% 80.50% 12.20% 8.50% 17.6 7 % 10.60%

Risk in 2070 60.18% 72.30% 10.67% 8.40% 29.15% 19.00%

Flood Risk Negligible Low Medium High

Residential Rivers and sea 94.35% 3.05% 1.89% 0.70%

Surface water 86.77% 8.77% 2.19% 2.27%

Commercial Rivers and sea 93.27% 4.04% 2.33% 0.36%

Surface water 82.87% 12.91% 2.24% 1.97%

Emissions Intensity (tCO

e/£m) 2024 2023

Residential 5.44 6.00

Commercial 5.83 5.60

Task Force on Climate-related Financial Disclosures continued

EPC rating

% of properties

Residential Commercial

A <1% <1%

B 10% 5%

C 22% 19%

D 31% 21%

<E 14% 8%

Unmatched 23% 47%

41Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Risk overview summary

This year there has been a clear risk focus on safely supporting

the Bank as it executes a programme of strategic change and

transformation. Alongside our continued management of

business-as-usual risks, this has positioned the Bank to deliver

its growth objectives.

Approach to risk management

Our risk management framework underpins our

ability to safely deliver, ensuring risks are carefully

considered when making decisions and are

managed within acceptable limits on an ongoing

basis. It sets out the tools and techniques used

to manage each of our principal risks within our

stated appetite.

Risk management is a key aspect of every

colleague’s objectives and is embedded within

our scorecard, against which performance is

measured. We work to create an environment in

which colleagues are encouraged and able to raise

concerns and act to meet all applicable legal and

regulatory requirements and maintain constructive

relationships with our regulators.

We operate a ‘three lines of defence’ model of

risk management and by leveraging well-defined

governance structures and processes, promote

individual accountability and action in mitigating

our risk exposures.

Further information on our

risk management framework

can be found on page 122

Risk environment in 2024

The 2024 risk agenda has been framed by the need

to safely execute on the Bank’s transformation

initiatives whilst continuing to manage business-as-

usual risks.

Whilst some of our risk exposures have changed,

measures taken have ensured these have been

managed within our risk appetite. The Bank’s

resilience has been maintained and we remain

focused on ensuring our customers receive good

outcomes. Achieving these objectives has guided

strategic decision-making and is at the heart

of the value proposition for our new partnership

with Infosys.

Greater macroeconomic stability including a

decline in inflation has supported a reduction in

expected credit losses, partially offset by run-off

of the personal loan and credit card portfolios

and limited arrears and defaults in the retail

mortgage portfolio.

Capability is in place to support targeted lending

growth objectives, including risk expertise to safely

expand into higher yielding specialist mortgage

lending and capabilities in commercial underwriting.

Plans are in place to scale this capability in line with

delivery of commercial objectives.

We have continued to actively manage our capital

position including through the successful sale of

a portion of our residential mortgage book in the

second half of the year. This supported the Bank’s

strategy to enhance risk-adjusted returns and to

increase capacity for future lending. Maintaining

capital above regulatory requirements and to

support strategic growth remains a key focus

for the Bank.

Work has been completed to establish and embed

the Bank’s approach to meeting the FCA’s

Consumer Duty. This remains a key priority subject

to ongoing close monitoring and enhancement.

This year we also completed the third operational

resilience self-assessment which demonstrated

further maturity in our approach and capability in

line with FCA and PRA regulatory requirements.

Alongside, we have continued to comprehensively

risk assess our key third-party relationships

including our partnership with Infosys, the success

of which is a key growth enabler.

The FCA concluded their enquiries into the Bank’s

historic transaction monitoring systems and

controls in place between 2016 and 2020. Since

then, the Bank has invested in transaction

monitoring enhancements and management of

financial crime risk remains a key priority. Progress

has been made in strengthening our financial crime

controls, including through establishing enhanced

central operational and risk management

capabilities. Responding to the dynamic external

threat, we have also invested further in our fraud

systems and controls to safeguard our customers

and funds.

Further information on our

operating environment can

be found on pages 6 to 7

Principal risk exposures

On an ongoing basis, we assess our risks against

risk appetite, including those that could result in

events or circumstances that might threaten our

business model, future performance, solvency or

liquidity, and reputation. We consider the potential

impact and likelihood of internal and external risk

events and circumstances, and the timescales over

which they may occur.

We identify, define and assess a range of principal

risks to which we are exposed, for which risk

appetite is set and monitored via key risk indicators.

They are consistent with those set out in last year’s

annual report and comprise:

• credit risk

• capital risk

• liquidity and funding risk

• market risk

• financial crime risk

• operational risk

• conduct risk

• regulatory risk

• legal risk

• model risk

• strategic risk.

Further details on all of our

principal risks, including our

risk appetite, exposure and

response to each can be

found on pages 121 to 150

Amongst these, certain risks have been the most

material over the course of the year.

Further details on these four

risks are set out on pages 43

and 44

Metro Bank Holdings PLC Annual Report and Accounts 2024

Exposure Response Outlook

Credit risk

Our primary source of credit risk is through the loans,

limits and advances we make available to our customers.

We have exposures across three key areas: corporate and

commercial, retail mortgages, and consumer lending.

Over the course of 2024, the macroeconomic outlook has

gradually improved, and arrears and loss outcomes have

been lower than prior expectations. Inflation reduced

significantly and property prices exceeded prior forecasts.

Whilst we saw some deterioration in economic variables,

these were generally less severe than previously forecast.

We have observed some crystallisation of the prior

economic deterioration on customer positions, this was

lower than previously forecast. As affordability for

customers came under pressure from higher interest

rates, we observed an increase in arrears for the mortgage

portfolio as existing customers transitioned from low fixed

rate products onto higher rates. Although customers

continue to be impacted by higher interest rates, arrears

have shown signs of stabilising. Furthermore, given the

forward-looking nature of IFRS 9, ECL stock was built in

prior years and has not been materially impacted by this

increase in arrears.

We have an appetite and credit criteria appropriate for

managing lending through an economic cycle. We have

enhanced our credit risk appetite, framework, and policies

where appropriate to support the Bank’s strategy to grow

corporate and commercial lending, and drive the pivot to

specialist mortgage lending, whilst managing our exposure

to risk to minimise losses.

We support customers who are in arrears, have payment

shortfalls or are in financial difficulties to obtain the most

appropriate outcome for both the Bank and the customer.

The primary objectives of our policy are to ensure that

appropriate mechanisms and tools are in place to support

customers during periods of financial difficulty and to

minimise the duration of the difficulty and the

consequences, costs and other impacts arising.

Our updates to risk appetite and policies put us in

a strong position to deliver on the Bank’s strategy

for growth in a way that appropriately manages

credit risk.

The macroeconomic outlook has improved during

2024, although risks remain as central banks

manage the course of interest rates with a

background of potential trade friction from

political risk, and geopolitical instability continues

from conflicts.

We utilise forward-looking macroeconomic

scenarios provided by Moody’s Analytics in the

assessment of provisions. The use of an

independent supplier for the provision of scenarios

helps to ensure that the estimates are unbiased.

The macroeconomic scenarios are assessed and

reviewed monthly to ensure appropriateness and

relevance to the ECL calculation.

Capital risk

Capital risk exposures arise from the depletion of our

capital resources which may result from:

• increased RWAs

• losses

• changes to regulatory minima or other regulatory rules.

Our capital risk management approach is centred around

ensuring we can maintain appropriate levels of capital to

meet regulatory minima, including changes, and support

our strategic objectives.

Our capital risk mitigation is focused on three key

components:

• a return to sustainable profitability that will allow us to

generate organic capital growth

• the continued optimisation of our balance sheet to

ensure we are utilising our capital stack efficiently

• continuing to assess the raising of external debt capital,

as and when market conditions and opportunities allow.

The Board is committed to these principles and has taken

steps through 2024 to strengthen the capital base.

The focus for 2025 remains on supporting the

Bank’s strategy through an appropriate and

efficient capital stack that allows us to lend in our

target market whilst maintaining ratios above our

regulatory minima.

Risk overview summary continued

Principal risks

43Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Exposure Response Outlook

Financial crime risk

We may be exposed to financial crime risk if we do not

effectively identify and appropriately mitigate the risks of

criminals using our products and services for financial

crime. Financial crime risks include money laundering,

sanctions violations, bribery and corruption, facilitation of

tax evasion, proliferation financing and terrorist financing.

Failure to prevent financial crime may result in harm to our

customers, ourselves and third parties. In addition,

non-compliance with regulatory and legal requirements

may result in enforcement action such as regulatory fines,

restrictions, suspension of business or cost of mandatory

corrective action, which will have an adverse effect on us

from a financial and reputational perspective.

We are committed to safeguarding both ourselves and our

customers from financial crime. We continue to invest

in our financial crime control framework to ensure

compliance with current as well as newly issued legal

and regulatory requirements.

We continue to identify emerging trends and typologies

through conducting horizon scanning activity, through

information obtained from investigative and intelligence

teams and through attending key industry forums (or

associations) such as those hosted by UK Finance. As

required, we continue to update our control framework

to ensure emerging risks are identified and mitigated.

Recognising the evolving landscape of financial

crime risk against the backdrop of increasing

regulatory focus, we continue to invest in our

financial crime control environment to prevent

financial crime and remain aligned to our legal and

regulatory requirements.

Strategic risk

Strategic risk can arise from an insufficiently defined,

flawed, or poorly implemented strategy resulting in the

expectations of our stakeholders not being met, including

our customers, regulators and investors.

We are confident that the strategy set in 2024 lays the

foundations for long-term growth but recognise that its

success is dependent on our effective execution. Volatility

in the external environment, the challenge of safely

exploiting opportunities for efficiency and the possible

impact of negative external sentiment are all recognised as

having the potential to push us off course.

The Board completes an annual review of the strategy and

Long-Term Plan, supported by a risk assessment reviewed

at the Risk Oversight Committee. The Executive team and

Board monitor strategy execution risks closely across all

business lines and transformation initiatives.

Elevated reputational risk exposure has been monitored

closely throughout the year with proactive and

coordinated responses seeing coverage and sentiment

normalise by year end.

Our established Risk Management Framework is

applied to oversee the Bank’s evolving risk profile

and we will act as needed to ensure we operate

inside our agreed risk appetite. The Bank also

continues to conduct horizon scanning against

emerging risks with the potential for a severe

impact and will adjust its approach accordingly.

Risk overview summary continued

Principal risks continued

Metro Bank Holdings PLC Annual Report and Accounts 2024

Risk overview summary continued

Emerging risks

We proactively identify a range of evolving threats, which cannot yet be reliably quantified, but which have the potential to significantly impact the Bank. These are actively monitored and regularly reported through

the Bank’s governance structures with preparatory actions taken in response where necessary.

Emerging risks are classified using the Bank’s principal risks and time horizons for their potential emergence as crystallised risks are estimated.

A range of methods are used to identify emerging risks including internal working groups, scenario analysis and consulting with external experts to ensure an external perspective is incorporated. There continues

to be increased focus on assessing and understanding how different individual risks and threats are correlated with each other, including via scenario analysis.

Emerging risks and time horizon

Emerging risk Response Principal risks Crystallising time horizon

Geopolitical instability

Market volatility from trade

disruptions, conflicts, supply chain

shocks or energy insecurity.

• ongoing investment in sanctions capability and active monitoring

• resilience planning, including scenario plans for trade disruption, supply chain shocks, energy insecurity

• diversified portfolios and revenue streams to manage concentrations in exposures.

Operational

Financial crime

< 12 months

Prolonged macroeconomic

deterioration and credit risk

Rising defaults from economic

stagnation or contraction.

• close and active monitoring of customers in, or with signs of, arrears/distress

• application of Consumer Duty principals to deliver good customer outcomes

• continued investment in fraud and financial crime monitoring and controls.

Credit

Conduct

Financial crime

1 to 3 years

Digital disruption and

technological competition

Disruption of traditional banking

models by fintechs, Big Tech

and peer adopters.

• adoption of a flexible IT infrastructure and investment in the digital customer experience

• safe and staged introduction of AI/machine learning use cases (internal efficiencies, customer opportunities)

• communicate and demonstrate the value of our relationship banking proposition.

Operational

Strategic

Regulatory

1 to 3 years

Demographic

and social shifts

Ageing population and demand for

ESG and ethical financial products.

• design and deliver products aligned to evolving customer expectations, demographic and social shifts such as an

ageing population, changes in home ownership, socially conscious customers with increased focus on ESG initiatives

• use of data analytics to identify, adapt and respond to emerging customer needs.

Operational

Conduct

Strategic

3+ years

Climate-related

financial risk

Financial exposure to climate

events and transition to

a low-carbon economy.

• maintenance of a robust climate strategy, with climate risk fully embedded within the Enterprise Risk Management

Framework and integrated into strategic planning activities

• quantified and modelled climate risk assessments and scenario analysis for lending portfolios and operational risk

exposures, ensuring sufficient capital is held to withstand modelled losses

• embedding of climate risk controls into retail and commercial lending practices covering both physical and transition

risk exposures.

Credit

Operational

Strategic

3+ years

45Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Routine stress testing

In addition to the specific scenario, we perform

routine stress testing (including reverse stress tests)

for both management and regulatory purposes

including as part of the ICAAP and ILAAP. Directors

review these assessments to understand the likelihood

of such events occurring and what mitigating actions

could be taken.

Scenario outcome and mitigating actions

The Directors considered the actions that could reasonably be deployed to

mitigate the liquidity and capital risks and concluded that these were both

plausible and did not in and of themselves constitute any additional risk.

Mitigating actions for liquidity could include increasing savings rates as part

of a deposit-raising campaign and repo funding; and for capital could include

reducing commercial lending originations and forgoing payment of discretionary

cash bonus. Accounting for these actions we would remain above minima

although we would need to operate in our capital buffers for a period of time.

Severe but plausible stress

Directors considered a scenario that led to increased

ECL, deposit outflows, reduced fee income, increased

costs, the removal of our ability to raise incremental

regulatory capital and base rate stress and we fell

below regulatory minima at a total capital plus MREL

level. Directors also considered a severe liquidity stress

scenario where we did not retain sufficient liquidity.

Viability statement and going concern

Assessment of prospects

Assessment of viability

Although our Long-Term Plan reflects the Directors’ best estimate of the future prospects of the business, they have also tested the potential impact by examining our

sensitivity to a ‘severe but plausible’ downside. This has been undertaken via the creation of a scenario that reflects additional downside risks.

Going concern

The Directors consider it appropriate to prepare the financial statements on the going concern basis.

Viability statement

The Directors confirm that they have a reasonable expectation that we will be able to continue

in operation and meet our liabilities as they fall due over the four-year assessment period to

31 December 2028.

Strategic planning process

Our strategic planning process consists of our Long-Term Plan

which covers a five-year period from the year-end and is central to

the assessment of prospects. It is reviewed annually by the Board

with the first four years forming the viability assessment period.

Board review of the Long-Term Plan

• determination of whether the assumptions underpinning the Long-Term Plan remain appropriate

• consideration of whether the plan continues to take appropriate account of the external environment.

See pages 43 and 44 for our principal risks

Assessment of principal and emerging risks

The Directors undertook a robust assessment of all the principal

and emerging risks we face, to understand those that presented

the greatest risks to going concern and viability.

See pages 43 and 44 for our principal risks

Risks to going concern and viability

The principal risks that were felt posed the greatest risk to going

concern and viability were:

• a lack of liquidity (liquidity and funding risk)

• insufficient capital (capital risk)

• delivery risk for planned transformation (strategic risk).

Risk management and internal controls

The Directors undertook an assessment of our approach to risk

management and the effectiveness of our internal control

systems to ensure these remained appropriate and didn’t require

any additional consideration in respect of assessing going

concern and viability.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Approach and horizon period

Our approach starts with the consideration of

the principal risks we face. Of our principal risks it

was felt that only a lack of liquidity (liquidity and

funding risk), insufficient capital (capital risk)

or delivery risk for planned transformation

(strategic risk) could directly lead to us not being

able to continue in our current form if they were

to occur (although a failure of our other principal

risks could lead to one of these events).

Alongside this, the Directors considered our

approach to risk management and the

effectiveness of our internal control systems to

understand if there were any other considerations

that should form part of the assessment. This

included consideration of all material controls,

including financial, operational and compliance

controls. As described in the corporate governance

and risk reports, our risk management and internal

control systems are monitored and evaluated on an

ongoing basis at the Risk Oversight Committee,

Audit Committee and Board.

Although underpinned by a wide variety of support,

central to the assessment was our Long-Term Plan.

The Long-Term Plan represents our best forecast

estimate covering the period from 1 January 2025

to 31 December 2029, the first year of which

reflects our 2025 budget. Although the plan covers

five years the Directors have assessed prospects

and viability for the four years through to

31 December 2028. This is felt appropriate as it is

the period over which forecasts have a greater

level of certainty (although the fifth year still

provides a robust planning tool against which

strategic decisions can be made). The assessment

then focused on reviewing the plan against the

principal risks identified above that could impede

our ability to remain viable over the four-year

horizon period.

Assessment of prospects

The Directors have an obligation in accordance

with provision 31 of the Code to confirm that they

believe that we will be able to continue in operation,

and to meet our liabilities as they fall due. Our

prospects are assessed primarily through our

strategic planning process (our Long-Term Plan) as

set out to the left. The Board participates fully in

the annual process and is responsible for signing

off the plan and in doing so considers whether the

plan continues to take appropriate account of the

external environment (see Operating environment

on pages 6 to 7 for further details). The latest

updates to the Long-Term Plan (covering the period

2025 to 2029) were formally approved by the

Board in February 2025.

Our purpose and strategy framework which

incorporates our business model and strategic

priorities (see pages 2 to 3) are central to an

understanding of our prospects. The nature of our

activities is long-term, and our business model has

remained unchanged since we were founded.

Delivering on our strategic priorities is key to

achieving our forecasts in the Long-Term Plan.

The Directors have reviewed the assumptions

underpinning our plan and have determined they

are appropriate.

Assessment of going concern

In line with the work undertaken in respect

of viability the Directors also undertook an

assessment of going concern, which they consider

to cover a period of at least 15 months from the

date of approval of the financial statements.

Consistent with their approach to considering

viability, the Directors assessed whether we

continued to maintain sufficient liquidity and

capital for the period of assessment. Given this

assessment, combined with the fact that the

Directors do not intend to liquidate or to cease

our operations, they concluded that there was a

reasonable expectation that we have adequate

resources to continue as a going concern. They

have also concluded that there are no material

uncertainties that could cast significant doubt

over this assessment.

Viability statement and going concern continued

Viability statement

Based on their assessment of prospects and

viability above, the Directors confirm that they

have a reasonable expectation that we will be able

to continue in operation and meet our liabilities

as they fall due over the four-year assessment

period to 31 December 2028.

Going concern statement

The Directors also consider it appropriate to

prepare the financial statements on a going

concern basis, as explained further in the

Basis of preparation paragraph in note 1

to the financial statements.

Daniel Frumkin

Chief Executive Officer

22 April 2025

47Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

In this section

49 Corporate governance introduction

50 Board of Directors

52 2024 governance at a glance

54 Board activities and stakeholder engagement

56 Stakeholder engagement

59 Letter from the Designated Non-Executive

Director for Colleague Engagement

61 Board leadership and company purpose

63 Board roles and responsibilities

64 Board effectiveness

66 Group Audit Committee report

71 Group Risk Oversight Committee report

74 Group Nomination Committee report

78 Group People and Remuneration Committee report

82 Remuneration at a glance

87 Remuneration for colleagues below Board level

90 Remuneration policy

103 Annual report on remuneration

118 Directors’ report

Metro Bank Holdings PLC Annual Report and Accounts 2024

Governance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Corporate governance introduction

On behalf of the Board, I am pleased to set out

Metro Bank’s Corporate Governance Report.

This section sets out how, during 2024, the Board

has considered and made decisions that were in

the best interests of shareholders, customers,

colleagues and all other stakeholders. The Board

remains committed to the highest standards of

corporate governance and this is reflected in the

decisions we take, the transparency of the

standards we set, our culture and our

communication with stakeholders.

2024 was a pivotal year in the Bank’s

transformation journey and the Board continued to

focus on overseeing ExCo’s delivery of the Bank’s

strategy, centred on our five strategic priorities.

Aligned to a strong cost discipline focus and

targeted growth in higher yielding corporate,

commercial and SME lending and specialist

mortgages where our established relationship

banking model positions us to win and create new

FANS, 2024 saw the Board approving business

cases for new stores aligned to the Bank’s pivot to

commercial; the sale of a £2.5 billion residential

mortgage portfolio in September 2024, with

TFSME repaid from proceeds; and the

announcement of the Bank’s strategic

collaboration with Infosys in October 2024 to

enhance digital capabilities, improve automation,

refine data, and embed further AI capabilities.

In November 2024, the Bank announced the

conclusion of the FCA’s enquiries into transaction

monitoring systems and controls that began in

2016 and were remediated by 2020, drawing a line

under this legacy issue and allowing the Bank to

move forward and fully focus on the future.

Some of the progress and decisions made in 2024

have resulted in a reduction in the number of roles

in the Bank, with some colleagues exiting the Bank

or transferring to our strategic partner, Infosys.

These difficult decisions were necessary to

support the long-term sustainability of the Bank

and were in the best interests of all stakeholders.

On behalf of the Board, I would like to thank each

and every colleague for their hard work and

support over the year.

The Board continued to review and monitor

progress against the Bank’s ESG strategy and

priorities and is proud of the initiatives successfully

launched during the year. The Bank’s ESG strategy

will remain under close review by the Board as it is

a key enabler of our purpose. More information on

ESG can be found on pages 19 to 30.

I am proud of the progress made during the year.

Moving forward, the Board is focused on how the

Bank can continue to deliver sustainable

profitability and growth for our stakeholders whilst

continuing to navigate an uncertain economic

environment.

Leadership

Following the departure of James Hopkinson in

January, Cristina Alba Ochoa joined the Bank as

interim CFO in February, and, following regulatory

approval, was appointed to the Board in June.

Jaime Gilinski Bacal joined the Board in September.

Upon completion of her role as interim CFO,

Cristina Alba Ochoa was appointed as a

shareholder-nominated Non-Executive Director in

October. Having joined the Bank in September,

CFO Marc Page was appointed to the Board in

November following regulatory approval.

Paul Coby joined the Board in December.

As at 31 December 2024, the percentage of

females on the Board was 27%, below the

recommended 40%. The Board has retained its

ethnic diversity on the Board and the Senior

Independent Director (SID) is female.

We recognise the benefits of having a balanced

and diverse Board which represents the views,

experiences and backgrounds of our customers

and colleagues. We are committed to increasing

the diversity of our Board over time and in line with

our Board succession plan.

In terms of ExCo changes during 2024, Andy

Veares was promoted to Managing Director,

Corporate and Commercial in January.

The Nomination Committee is delighted that the

strong pipeline and succession planning in place

for our senior leaders is continuing to bear fruit.

The changes made to ExCo, as well as the

appointment of Marc Page as CFO reflect our

continuing commitment to creating a strong,

experienced and diverse leadership team.

During 2024, the Board received regular updates

on culture, including current and future initiatives

to define, measure and sustain culture at the Bank.

Following Catherine Brown’s appointment as SID

on 1 January 2024 and to ensure appropriate

ongoing Board focus on creating FANS and

ensuring good outcomes for customers, in line with

the FCA’s Consumer Duty objectives, Nicholas

Winsor took over from Catherine as Consumer

Duty Champion on 1 February 2024.

Governance

Our aim in this Corporate Governance Report is to

provide a clear and meaningful explanation of how

the Bank applies the principles of the 2018 UK

Corporate Governance Code (the ‘Code’) and how

the Board provides oversight of the Bank and

discharges its governance duties.

In view of the changes made to the Bank’s

ownership structure and Board composition, the

Board’s effectiveness and performance in 2024

was assessed via an externally facilitated evaluation

which commenced in January 2025. I am pleased

to report that the Board continues to operate

effectively. Like all boards, there are areas where

our performance and value to stakeholders can be

enhanced, and these are outlined on page 64.

Drivers of the Board’s effectiveness highlighted in

the 2024 Board Effectiveness Report include:

• its focus on the highest priority issues

• collegiate and committed Directors

• effective oversight

• robust and constructive challenge.

I would like to thank our shareholders for their

support throughout the year — 18 of 20 resolutions

at our AGM on 21 May were duly passed.

Future priorities

As we move forwards, both the Board and

management still fundamentally believe that to be

successful we must continue to offer both physical

and digital services and we know the value this

creates for our customers and our communities.

The Bank remains committed to having store

presence a key differentiator for our customers.

We continue to invest further in creating and

offering products and services that meet the needs

of our diverse customer base and create an even

better consumer experience for our customers.

Looking forwards to 2025, I remain positive about

the future of the Bank. As a Board, our focus will be

on continuing to provide effective oversight of

management as they deliver our strategic priorities

of revenue, balance sheet optimisation, cost,

infrastructure and communication.

Robert Sharpe

Chair

22 April 2025

49Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Board of Directors

As at the date of publication

Key to Committees

Audit

Nomination

People & Remuneration

Risk Oversight

Marc has more than 20 years’

experience in financial services roles

in Barclays, HBOS and Lloyds Banking

Group. He is Metro Bank’s Chief

Financial Officer and joins from

Barclays where he held a number of

senior positions since joining in 2017.

He was most recently CFO of

Kensington Mortgages following its

acquisition by Barclays in 2023; and

Non-Executive Director of

Clydesdale Financial Services, also

part of Barclays, having previously

been its CFO. Marc has significant

cross- functional banking experience

having led distribution strategy/

optimisation; customer integration

programmes (post the HBOS and

Lloyds merger) and global credit

impairments (notably for Barclays

through the COVID pandemic).

Appointed to the Board:

12 November 2024

Marc Page

Chief Financial Officer

Catherine is the Chair of The Bank

of London. Her other non-executive

director and committee chair roles

include QBE Underwriting Limited

and QBE UK Limited, one of the

world’s leading international insurers,

and FNZ Securities Limited.

Catherine has previously held a

Non-Executive Director role at the

Cabinet Office and was Chair of

Additive Flow Limited. She has been

a Trustee of Cancer Research UK

and Chatham House. Catherine

has extensive experience in

organisational transformation in

financial services and a wide range

of experience in leadership and

operations. Her previous executive

appointments include Group

Strategy Director at Lloyds Banking

Group, Executive Director of Human

Resources at the Bank of England

and Chief Operating Officer at

Apax Partners.

Appointed to the Board:

1 October 2018

Catherine Brown

Senior Independent

Non-Executive Director

Robert has over 45 years’ experience

in retail banking and is currently

Chair at Pollen Street Group Limited

and Hampshire Trust Bank plc. He has

had an extensive number of board

appointments both in the UK

including Chair of Bank of Ireland UK

plc, Chair of Al Rayan, Chair of

Retirement Advantage, Non-

Executive Director at Aldermore

Bank plc, George Wimpy plc, Barclays

Bank UK Retirement Fund, Vaultex

Limited, LSL Properties plc, RIAS plc;

and several independent Non-

Executive Director roles at banks

in Qatar, UAE, Oman and Turkey.

Robert was previously Chief

Executive Officer at West Bromwich

Building Society, a role he took to

chart and implement its rescue plan.

Prior to this, he was Chief Executive

Officer at Portman Building Society

and Bank of Ireland’s consumer

business in the UK.

Appointed to the Board:

1 November 2020

Robert Sharpe

Chair

Daniel is responsible for leading

the Bank – with a focus on driving

long-term sustainable growth by

delivering great customer service

at the right cost, to create even

more FANS.

Prior to joining Metro Bank, Daniel

worked in America, the UK, Eastern

Europe and Bermuda. He has

performed business, risk, product

and commercial executive level roles

throughout his career. Most recently,

Dan was Group Chief Operating

Officer at Butterfield Bank with

responsibility for eight jurisdictions

across the globe covering a range of

business and support areas.

Appointed to the Board:

1 January 2020

Daniel Frumkin

Chief Executive Officer

Paul is an experienced FTSE 100

Chief Information Officer with a

successful track record in delivering

digital transformation and tech-

enabled change across a range of

sectors, having been the Group CIO

at British Airways, the John Lewis

Partnership, and Johnson Matthey.

Currently, Paul is Group Chief

Information Officer at Persimmon

Homes, a Trustee of Museum of

London Archaeology, and a member

of the Board of Governors of More

House School for boys with Specific

Learning Difficulties. Paul was

previously a Non-Executive Director

at Clydesdale Bank, subsequently

Virgin Money, from June 2016 until

June 2022. Prior to this, Paul’s

non-executive directorships included

Pets at Home Group and chairing

SITA, the global supplier of air

transport communications and IT.

Appointed to the Board:

30 December 2024

Paul Coby

Independent

Non-Executive Director

Paul is an experienced Chief

Executive Officer, Chair and Non-

Executive Director with diverse

international media and service-led

experience with an emphasis on

people, innovation, data and culture.

Paul is the former Chief Executive

Officer and Chair of the NEC Group

in Birmingham and successfully

steered the NEC on a journey from

public sector ownership to a

£307 million management buyout in

2015, and then an £800 million

acquisition of the NEC Group by

Blackstone in 2018. In addition, Paul is

the Chair of BOXPARK, Chair of

Student Energy Group, sits on the

Board of the West Midlands Growth

Company Limited and the British

Allied Trades Federation, and is a

patron of Marie Curie and Heads

Together. Paul is Deputy Lieutenant

of West Midlands Lieutenancy,

representing the King in the region,

and was awarded a CBE for services

to the economy in the New Year’s

Honours List 2020.

Appointed to the Board:

1 January 2019

Paul Thandi CBE

Independent

Non-Executive Director

Metro Bank Holdings PLC Annual Report and Accounts 2024

Cristina has worked in financial

services for over 30 years, where she

has served as company executive

and Board member. Most of her work

has been in the EMEA and North

American markets, with exposure to

SE Asia/ANZ. During four years as

CFO, she led OakNorth’s financial

organisation as it grew both in the UK

market and globally, achieving triple

Unicorn valuations in several rounds

of equity raise, to support

outstanding growth. It became the

first profitable Unicorn in the UK.

During 18 years at GE Capital, she

held positions in credit and finance in

Spain, and then moved to global roles

based out of London and Paris. In the

last two years, when GE decided to

fully divest GE Capital, she was the

director leading GE Capital’s in-house

M&A Finance Readiness team to

execute divestitures of ~$100 billion

financial services assets (33

transactions) over 24 months.

Cristina is a shareholder-nominated

Non-Executive Director, nominated

by Jaime Gilinski Bacal, a significant

shareholder of Metro Bank,

through his Spaldy Investments

Limited vehicle.

Appointed to the Board:

10 June 2024

Dorita is the President of JGB

Financial Holding Company and a

member of the Board of Directors

and the Audit Committee of Banco

GNB Paraguay. Dorita co-led the

launch of Lulo Bank, the first fully

digitalised bank in Colombia.

She brings significant experience

in banking, including digital banking

and marketing, as well as strategic

planning and stakeholder

engagement to her Non-Executive

Director role. Prior to these roles,

Dorita founded the Dori Gilinski

Gallery and Libros Para Niños, a

non-profit organisation that connects

UK volunteers with Latin American

schools and charities. Dorita is a

graduate of the University of

Oxford and holds an MBA from

Harvard Business School. Dorita

is a shareholder-nominated Non-

Executive Director, nominated by

her father Jaime Gilinski Bacal,

a major shareholder of Metro Bank,

through his Spaldy Investments

Limited vehicle.

Appointed to the Board:

26 September 2022

Michael has extensive career

experience in senior roles across

financial services. His current

appointments include Non-Executive

Director roles at FICS Group

Holdings Limited, Frasers Group

Financial Services Limited and

Remitly Europe Limited. His past

appointments include Chief

Executive of the Corporate &

Treasury division and Member of

the Group Executive Committee at

Bank of Ireland, Head of Banking at

the National Treasury Management

Agency in Ireland; Group Treasurer

at Irish Life & Permanent plc;

Senior Treasury Adviser at the Irish

Financial Regulator; Finance Director

at Ulster Bank Group; and Finance

Director at First Active plc.

Appointed to the Board:

1 September 2019

Michael Torpey

Independent

Non-Executive Director

Nick is an independent consultant

and Non-Executive Director. He is

Chair of Schroder Oriental Income

Limited and a member of its

Nomination and Remuneration,

Audit and Risk, and Management

Engagement committees. He is also

a Senior Independent Director of

the States of Jersey Development

Company, Chair of its Remuneration

and Nomination Committee and a

member of the Audit and Risk

Committee; a Non-Executive

Director of Bankers Without

Boundaries Connect Singapore Pte

Ltd; and a Non-Executive Director of

iC2 PrepHouse Limited. Nick has

more than 35 years of international

banking experience with HSBC

Group in a number of markets:

Brunei; Channel Islands; Hong Kong;

India; Japan; Qatar; Singapore;

Taiwan; United Arab Emirates and

the UK. Nick was awarded an MBE

for services to the community in the

Queen’s 2020 Birthday Honours List.

He holds a Masters in Physics from

Oxford University and is a Fellow of

the Institute of Directors.

Appointed to the Board:

20 April 2020

Nicholas Winsor MBE

Independent

Non-Executive Director

Jaime is an experienced banker, real

estate developer and philanthropist

and has extensive holdings primarily

in the banking and real estate sectors

in Latin America and the United

States. Jaime’s current non-executive

roles include Chair of JGB Financial

Holdco Inc., Chair of Grupo Nutresa

S.A. and Chair of the Board of

Directors of Banco GNB Paraguay

S.A. Jaime started his career as an

associate at Morgan Stanley &

Company in the investment banking

area; and then moved on to planning

and implementing business

strategies for various companies in

the consumer products and snack

food businesses in South America

in conjunction with several major

multinational US companies. Jaime

is also on the Board of Trustees at the

Georgia Institute of Technology and

the Board of Advisors at Harvard

Business School, Teatro Real in

Madrid and the Blavatnik School of

Government at Oxford University.

Jaime is a shareholder-nominated

Non-Executive Director, as a major

shareholder of Metro Bank

through his Spaldy Investments

Limited vehicle.

Appointed to the Board:

2 September 2024

Jaime Gilinski Bacal

Shareholder-Nominated

Non-Executive Director

Clare joined Metro Bank as Company

Secretary in July 2023 and leads the

Bank’s company secretarial function,

ensuring it continues to meet its

statutory and regulatory obligations.

Clare joined Metro Bank after more

than 15 years at Bank of Ireland

where she held a number of senior

risk governance roles, latterly UK

Company Secretary. Clare holds a

BA Hons in Russian & Soviet Studies

from the University of Manchester.

Appointed:

31 July 2023

Clare Gilligan

Company Secretary

Cristina Alba Ochoa

Shareholder-Nominated

Non-Executive Director

Dorita Gilinski

Shareholder-Nominated

Non-Executive Director

Board of Directors continued

51Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

73%

Male

27%

Female

2024 governance at a glance

Board gender diversity

As at 31 December 2024

Board independence*

As at 31 December 2024

Board tenure

As at 31 December 2024

0-2 years

5+ years

50%

Independent

Directors

50%

Non-

Independent

Directors

2-4 years

* Excluding the Chair.

Highlights

2024 Board and Committee meeting attendance

Committee

Chair

Standard

Board

Audit

Committee

Risk Oversight

Committee

People and

Remuneration

Committee

Nomination

Committee

Chair

Robert Sharpe Nom 7/ 7 6/6 4/4

Executive Directors

Daniel Frumkin 7/7

James Hopkinson (until 12 January 2024) 0/0

Cristina Alba Ochoa (10 June 2024 – 14 October 2024) 1/1

Marc Page (from 12 November 2024) 1/1

Non-Executive Directors

Catherine Brown ROC 7/7 6/6 10/10 6/6 4/4

Cristina Alba Ochoa (from 15 October 2024) 2/2

Dorita Gilinski 6*/7

Jaime Gilinski Bacal (from 2 September 2024) 1*/2

Michael Torpey AC 7/7 6/6 10/10

Nicholas Winsor 7/7 6/6 10/10

Paul Coby** (from 30 December 2024) 0/0

Paul Thandi PRem 6*/7 10/10 6/6 3*/4

* Unable to attend due to prior commitments.

** No further Board meetings were held in 2024 following Paul Coby’s appointment on 30 December 2024.

2024 Board changes

On 12 January 2024, James Hopkinson

stepped down as CFO and Executive

Director and Cristina Alba Ochoa was

appointed as interim CFO. Cristina was

appointed as Executive Director from

10 June 2024, before being appointed as a

shareholder-nominated NED on 15 October

2024, when her tenure as interim CFO

ended. Jaime Gilinski Bacal was appointed

as a shareholder-nominated NED in

September 2024. Marc Page was

appointed as CFO and Executive Director

on 12 November 2024. On 30 December

2024, Paul Coby was appointed as an

independent NED.

Board training

Training and insight sessions held during

the year included topics such as updates

on the UK Corporate Governance Code,

requirements under the new 2024 Global

Internal Audit Standards, refresher training

on Director Duties, and Transformation

Pricing.

External Board review

The Board and its committees are

committed to regular, independent

evaluation of their effectiveness. Given the

changes to the Bank’s ownership structure

and Board composition, Rise Regulatory

Consulting Limited was appointed to

undertake an external review of the

effectiveness of the Board and its

committees in 2024. The process and

findings can be found on page 64.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Compliance with the UK Corporate Governance Code 2018

We believe good corporate governance is

essential to our ambition to become the most

trusted and recommended UK bank. With this in

mind, we welcome the proposed enhancements

to the UK Corporate Governance Code

announced by the Financial Reporting Council in

January 2024, against which we will report our

compliance in our 2025 Annual Report.

Key content on compliance with the Code can be

found in this report as set out on the following

pages. During 2024, there was one instance of

non-compliance with a provision of the Code

and our explanation is set out on this page.

Code non-compliance

Provision 11 – At least half the board, excluding the

chair, should be non-executive directors whom the

board considers to be independent.

Explanation – Between 12 November and 29

December 2024, following the appointment of two

non-independent shareholder-nominated NEDs,

the Bank was not in compliance with provision 11 of

the Code (44% independent). It is important that

new appointments to the Board are considered as

part of a robust process and this can take time.

Paul Coby was appointed on 30 December 2024,

restoring the balance of independence on the

Board. We remain committed to upholding the

highest standards of corporate governance and

will continue to monitor board composition to

ensure compliance with the Code’s principles.

2024 governance at a glance continued

Board leadership and company purpose

Corporate governance introduction

Section 172 statement

Board of Directors

2024 governance at a glance

Strategic priorities

Business model

50–51

52–53

10–13

Division of responsibilities

Board roles and responsibilities

Board and Board Committee attendance

Board independence

Composition, succession and evaluation

Board of Directors

Board effectiveness

Group Nomination Committee Report

50–51

64–65

Audit, risk and internal controls

Group Audit Committee Report

Risk Report

121–150

Remuneration

Group People and Remuneration Committee Report

Annual Report on Remuneration

103–117

Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Key Board activity Stakeholders considered Strategic priorities

New stores

We remain committed to maintaining a physical

presence and ensuring that stores remain both

accessible and at the heart of local communities. In

April 2024, the Board approved a business case for

new stores aligned to our pivot to commercial, which

will see the Bank opening three new stores in 2025 in

Chester, Gateshead and Salford.

Mortgage

portfolio sale

In July 2024, the Bank announced the sale of a

£2.5 billion residential mortgage portfolio to NatWest

Group plc. Successful completion of the sale was

announced in September 2024.

Strategic

collaboration

In October 2024, the Bank announced a strategic

collaboration with Infosys which will enhance the

Bank’s digital capabilities, improve automation, refine

data, and embed further AI capabilities. This led to

changes for some colleagues and a number of

redundancies. More information on how colleagues

were considered during this time is set out on

page 60.

Conclusion of

FCA enquiries

November 2024 saw the resolution of the FCA’s

enquiries into transaction monitoring systems and

controls that began in 2016 and were remediated by

2020. The conclusion of these enquiries draws a line

under this legacy issue, allowing the Bank to move

forward and fully focus on the future, building on the

solid foundations it has already laid.

Stakeholders

Our customers

Our colleagues

The communities

we serve

Our suppliers

Our regulators

Our investors

Strategic priorities

Costs

Revenue

Infrastructure

Balance sheet

Communication

Board activities and stakeholder engagement

Metro Bank Holdings PLC Annual Report and Accounts 2024

Board activities

The Board has a forward plan for its meetings, which

includes regular updates from management on financial,

strategic, risk management, people and culture, and

operational matters. Each Board Committee has defined

Terms of Reference with delegated specific areas of

responsibility to ensure that all areas for which the

Board has responsibility are considered during the year.

Reports from the CEO, CFO and CRO are standing

Board agenda items. During 2024, transformation

programme updates were also standing agenda items.

The Company Secretary, or her delegate, reports on

governance matters and updates the Board on any

changes to Directors’ statutory duties or the regulatory

environment which are pertinent to their role. The Chair

of each Board Committee reports on the proceedings

of the previous Board Committee meeting at the next

Board meeting. Approved Board Committee minutes,

including Disclosure Committee minutes, are included

in the Board papers.

The ExCo, senior management and advisors are invited

to attend Board and Board Committee meetings to

present, contribute to discussion, and advise members

of the Board or Board Committees on particular

matters. The involvement of the ExCo and senior

management in Board and Board Committee

discussions strengthens the relationship between the

Board and senior management and helps to provide the

Board with a greater understanding of operations and

strategic direction.

The Board meets periodically without the Executive

Directors present to ensure any concerns can be

discussed. Furthermore, it enables the Board to

scrutinise and challenge management on the delivery of

strategic objectives. The Chair, assisted by the Company

Secretary and her team, is responsible for ensuring that

the Directors receive accurate and timely information.

The Company Secretary and her team compile the

Board and Board Committee papers, which are

circulated to Directors in advance of meetings. The

Company Secretary and her team ensure that feedback

on Board papers is relayed to senior management. The

Company Secretary prepares minutes of each meeting

and is responsible for following up on any action items.

Board activities and stakeholder engagement continued

Feb

• announced the appointment of Marc Page as CFO

• 2023 Board and Committee Effectiveness Evaluation Summary and

Recommendations

• reviewed and approved the Bank’s Long-Term Plan

• approved the risk appetite for the Bank ensuring that returns are

maximised in a safe and sustainable way.

• Q1 2024 results

• announced the appointment of interim CFO, Cristina Alba Ochoa, as an

Executive Director

• approved a business case for new stores aligned to the Bank’s pivot

towards the corporate, commercial and SME lending, and specialist

mortgages sectors.

• announced that on completion of her contract as interim CFO, Cristina

Alba Ochoa, would join the Board as a shareholder-nominated

Non-Executive Director.

Dec

• announced the appointment of Paul Coby as a Non-Executive Director.

Aug

2024

• annual review of the Bank’s Resolution Readiness

• announced the resignation of James Hopkinson as CFO

• announced the appointment of Jaime Gilinski Bacal as shareholder-

nominated Non-Executive Director.

• 2023 year-end results.

• welcomed shareholders to our AGM.

Key announcements, decisions

and Board activity

• H1 2024 results

• announced the sale of £2.5 billion residential mortgage

portfolio to NatWest Group plc

• approved the Consumer Duty Report and attested to the accuracy

of the information contained therein.

• announced completion of the sale of £2.5 billion residential

mortgage portfolio to NatWest Group plc

• approved a strategic collaboration with Infosys.

• Q3 2024 results

• announced the conclusion of FCA enquiries into transaction monitoring

systems and controls that began in 2016 and were remediated by 2020.

• summary of changes to align Retail and Business Banking support and

operations with desired service proposition and financial performance

aligned to the Bank’s pivot towards the corporate, commercial and SME

lending, and specialist mortgages sectors.

Jan

Feb

Mar

Apr

May

Jun

Jul

Sep

Oct

Nov

55Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

We pride ourselves on delivering personable service to every customer no matter how they interact with us,

whether they’re a business, commercial, retail, or private banking customer.

What matters most to them

• personal service underpinned by relationship banking

• simple banking products and services that can be accessed through the channel of their choice

• a wide range of business banking and specialist products.

How we engage

• people, relationships, simplicity and locality are our brand principles, and the Board takes our customers into

account in every decision it makes

• a business performance update is a standing Board agenda item. This includes performance against key

customer metrics such as Net Promoter Scores (NPS); Expressions of Dissatisfaction; and Competition and

Markets Authority (CMA) survey results, which gives the Board valuable insight into how customers rate service

delivery

• alongside our relationship banking approach, we engage through direct marketing, events, advertising, social

media and external communications

• we increased marketing activity to support the Bank’s pivot to corporate, commercial and SME lending, and

specialist mortgages including launching our first brand campaign in three years to increase consideration and

trust amongst SMEs, our first trade marketing campaign targeting commercial brokers and appeared at NACFB

and The Business Show events.

2024 outcomes

The Board remains committed to maintaining a physical presence and ensuring that stores remain both accessible

and at the heart of local communities. In April 2024, the Board approved a business case for new stores which

aligned to our pivot toward commercial lending.

The Board remains committed to strategically repositioning its balance sheet toward higher yield corporate,

commercial and SME lending, and specialist mortgages. Product offerings have been enhanced during the year to

support this.

2024 highlights

• enhanced Buy-to-Let offering to serve more customers

• improved business overdraft services via the mobile app

• increased maximum loan sizes for residential properties

• enhanced mortgage employment income criteria

• launched revolving credit facilities for larger, more complex businesses

• hosted business and women in business networking events in our communities

• hosted the East London Expo at our Ilford store.

We understand that our colleagues are what makes the Bank different. We want every colleague to be a fan of

Metro Bank, feel supported and invested in, so that they can make FANS of our customers.

What matters most to them

• sense of purpose and connection to their work

• development and career opportunities

• fair pay, reward and opportunity to make a difference

• culture of inclusion and wellbeing

• flexible and hybrid working practices.

How we engage

• twice-yearly Voice of the Colleague surveys, outcomes of which are reported to the Board

• Voice of the Colleague engagement representatives across the business

• face-to-face and virtual opportunities to meet and provide feedback to our DNED for Colleague Engagement,

Nicholas Winsor

• Revolution Update strategy overview hosted by the senior leadership team and ExCo

• opportunities to engage with ExCo and Board members

• have your say cafés and colleague meetings with leaders

• fortnightly ‘Tea on Teams’ with the CEO and ExCo team and ten colleagues from across the Bank

• colleague-led inclusion networks.

2024 outcomes

The Board reviews Voice of the Colleague survey results and receives updates on people and culture throughout

the year. The Board was committed to supporting colleagues through a transitional year for the Bank and more

information on how we engaged with our colleagues through regular updates from the DNED are set out on pages

59–60.

2024 highlights

• new panel format Revolution Update with the opportunity to join in person or virtually

• online ‘Yam Jams’ Q&As with senior leadership

• CEO and CFO full and half-year financial results Q&A all-colleague call.

Our customers Our colleagues

Stakeholder engagement

Metro Bank Holdings PLC Annual Report and Accounts 2024

Stakeholder engagement continued

It is important to us that we engage with our investors to keep them up to date on our performance and strategy,

share our vision for the future and understand their views and focus areas. We engage openly and transparently,

on an ongoing basis, with our investors who are helping us to grow and shape the Bank for the future.

What matters most to them

• successful delivery of the strategic plan

• the path to sustained profitability

• ability to maintain cost discipline and leverage the cost base for revenue growth

• capital management and ability to lend more to our customers.

How we engage

• 2024 AGM and Annual Report and Accounts

• quarterly trading updates and investor presentations at half/full year

• investor roadshows and conferences

• proxy advisor and institutional investor meetings.

We ensure shareholder views are brought into the boardroom and considered at all times throughout the

decision-making process. The Board regularly receives updates from the Investor Relations team and the Bank’s

Broker to remain informed on investor views, the market and latest trends. In line with the agreement with the

majority shareholder, the Board appointed two further shareholder-nominated NEDs in 2024, with the purpose of

further enhancing the consideration of shareholder views as part of Board decision-making.

We provide comprehensive updates to the market at half and full year, with condensed trading statements at Q1

and Q3. The results presentation and Q&A with management provides stakeholders with clear guidance on our

capital planning priorities alongside strategic updates and financial results. The announcements are reviewed and

approved by the Board.

2024 highlights

• feedback from investors was taken into account when reviewing the strategic plan, ensuring alignment with

shareholder interests

• strong investor relationships, both existing and new, have continued to be cultivated this year, as the Bank

continues to transition into the new strategy

• shareholders supported 18 out of the 20 resolutions at the 2024 AGM with 79% or more of the votes in favour

of these. The Board has consulted with shareholders who voted against the two resolutions and understands

their reasons. The Board continues to engage with shareholders and their representative bodies on an

ongoing basis.

We are subject to financial services regulation and approval in the markets in which we operate. We engage with

our regulators to ensure we meet all the relevant regulations and ensure we do the right thing. The Bank is

committed to promoting integrity, transparency and engaging in a collaborative and open manner with our

regulators. The financial services regulatory landscape continues to evolve, and the Board ensures the Bank’s

strategic priorities are in line with regulatory requirements and new initiatives.

What matters most to them

• compliance with relevant laws and regulations

• governance and accountability

• transparent and constructive engagement and communication.

How we engage

• annual PRA presentation to the Board

• regular meetings between our regulators and members of the Board and ExCo.

We aim to maintain our positive relationship with regulators through an approach of early and regular

engagement, particularly on areas of critical importance. The FCA and PRA receive copies of our Board papers.

We have engaged constructively with our regulators during 2024 with respect to key initiatives and will continue

this engagement across upcoming changes to the regulatory landscape in 2025 and beyond. The CRO reports

regularly to the Risk Oversight Committee and the Board on material matters of regulatory engagement including

an assessment of the status of our regulatory relationships.

Our investors Our regulators

57Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Stakeholder engagement continued

Our supply chain helps us to deliver banking products and services to all of our stakeholders.

What matters most to them

• collaboration

• open and fair terms of business, including payment terms and practices

• social and ethical business relationship

• long-term partnerships.

How we engage

• report on supplier payment practices

• Supplier Code of Conduct

• regular senior-level engagement with key suppliers

• dedicated relationship manager with the Bank.

We are committed to paying our suppliers within clearly defined terms and have processes in place for dealing

with any payment issues that may arise. The Group Audit Committee reviews and approves the Bank’s disclosure

on supplier payment practices, and, as required by law, we publicly report this information on a biannual basis. For

the last reporting period between 1 July 2024 and 31 December 2024, our average invoice payment turnaround

was 25 days. We continue to review and improve our processes with the aim of ensuring all of our suppliers are

consistently paid within defined terms.

The Board understands the risks posed by our suppliers and ensures that they are appropriately managed by the

Bank. All suppliers have a relationship owner within the Bank and a Supplier Commercial Manager within the

Procurement, Supplier Risk and Commercial Management teams. We maintain effective relationships with our

suppliers and consider their interests when making relevant decisions.

We work closely with our suppliers, meeting regularly at a senior level with key suppliers. We have continued to

embed ESG considerations in conversations with suppliers, driving meaningful engagement with their ESG teams.

We also further bolstered our oversight of supplier risks and controls, with a particular focus on our top-tier

material engagements.

2024 outcomes and highlights

• first supplier-specific emissions reporting

• enhanced oversight of material supplier risks and controls.

Our suppliers The communities we serve

We are proud to be an integral part of the communities we serve. Our communities bring Metro Bank to life,

providing vital services to local people and businesses, as well as employment opportunities when we expand into

new locations.

What matters most to them

• effective engagement and communication

• safe and friendly environment in store and outside

• impact on local economies.

How we engage

• networking and community events

• days to AMAZE volunteering

• fundraising for charities

• 27 of our stores celebrated International Women’s Day by hosting more than 750 people at complimentary

networking events for local businesses.

The Board understands how important it is to have a physical presence in our communities. In deciding where to

build a new store, we take into account where we can reach the most people and businesses so that we can

continue to offer convenient banking at a time that suits our customers, and we will open new stores in Chester,

Salford and Gateshead in 2025.

The Board continues to support the Bank’s partnership with the England and Wales Cricket Board (ECB), and

approved The Metro Bank Girls in Cricket Fund.

The Board supported our colleagues in joining a Community Champion Group of their choice. Champions give

back by helping our local communities and registered charities.

2024 outcomes and highlights

• continued to be part of the UK SAYS NO MORE campaign to end domestic violence with 52 of our stores official

‘Safe Spaces’ for those in need

• invited business customers to our first ECB Business Networking Event

• hosted a stand for the first time at The Business Show; the UK’s largest business expo for SMEs

• connected with local business owners at numerous business exhibitions throughout the year, driving awareness

and consideration of the Bank amongst the SME market at a regional level

• supported a number of female-led businesses with funding for apprentices by transferring a portion of our

Apprenticeship Levy

• launched The Metro Bank Girls in Cricket Fund, which focuses on recruiting, training and celebrating more

volunteers and coaches in girls’ cricket across communities in England and Wales, with the ultimate ambition of

tripling the number of girls’ teams

• in Brighton, Bristol and Southampton, we created sponsorship packages and case study videos of three

businesses and put their brands up in lights at their local England Women’s cricket match and local Metro Bank

store to generate awareness of them, and the role Metro Bank plays in supporting women in business.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Our colleagues are a key asset, and our culture is a major reason that they choose to work

here. The Board plays an active role in fostering this culture, particularly in an environment

of change, and will closely monitor this during 2025.

Letter from the Designated Non-Executive Director

for Colleague Engagement

I’m pleased to set out my letter to Metro Bank’s stakeholders

following another busy year as the Designated Non-Executive

Director for Colleague Engagement (DNED). Since being

appointed in 2022, I have strengthened Board-colleague

engagement and I have shared the valuable insights gained

into colleague sentiment and their thought-provoking

questions to benefit the Board’s decision-making process.

The Board recognises that the DNED role doesn’t

replace existing engagement channels. The ExCo

already plays a key role in communicating Board

decisions to colleagues and we have established

networks, forums, the Voice of the Colleague

(VOC) surveys and our internal social media

channel ‘Viva Engage’ to help gather colleague

feedback.

2024 DNED engagement activities

and feedback

It has been a busy year of change, and colleagues

are encouraged to share their valued opinions

to ensure that their voices are heard in the

Boardroom. During the year, I met with colleagues

across Bank sites, attended department leadership

events and hosted ‘Natter with Nick’ sessions.

This provided valuable insights into their work

environment and, most importantly, the leadership

and culture of the Bank.

The Board continues to be of the opinion that

appointing a DNED is the most appropriate

engagement mechanism for the Bank to ensure

there is effective two-way dialogue with

colleagues. My role is to connect colleagues with

the Board and escalate their views to support

informed decision-making.

In addition to regularly reporting colleague views to

the Board, I also provide an annual report to the

Group People and Remuneration Committee on

the outcome of my engagement ahead of its

year-end decisions, to ensure the views of

colleagues are taken into consideration. My role

and its accompanying responsibilities are governed

by Terms of Reference which are kept under

review by the Board.

Our colleagues are a key asset, and our culture is a

major reason that they choose to work here. The

Board plays an active role in fostering this culture,

particularly in an environment of change, and will

closely monitor this during 2025.

Nicholas Winsor

Designated Non-Executive Director for Colleague Engagement

59Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

The VOC results showed a decrease in our

engagement score which was anticipated given

the scale of change within the Bank, the survey

response rate was 5 points above the global

benchmark highlighting that colleagues are

passionate about sharing their views. Colleagues

continue to love our supportive and inclusive

culture, but seek more visibility and interaction with

the Senior Leadership Team and ExCo as the Bank

continues through its transformation agenda.

Alongside Tea on Teams, Yam Jams and town halls

which provided opportunities for colleagues to

meet the Bank’s leadership team, every business

area across the Bank is represented by their VOC

Ambassador, and sessions were held to gather

feedback for wider planning. Strengthening

leadership engagement and DNED interactions

will remain a focus in 2025.

The past year has required us to make decisions to

enhance efficiency and reduce costs. This included

the need to collaborate with Infosys to accelerate

digital transformation, which has led to changes for

some colleagues and a number of redundancies.

These decisions were not taken lightly, and we

prioritised fairness, transparency and respect

throughout the process. Colleague wellbeing was

a priority for the Board during this time, and it was

pleasing to see the number of resources made

available to colleagues.

Summary of key activities undertaken by the DNED during 2024

Letter from the Designated Non-Executive Director

for Colleague Engagement continued

Colleague contact

Colleague

insight

Formal/informal

reporting

• met colleagues at the London Head Office

• visited AMAZE Direct Ilford site and the Ilford store

• hosted a number of ‘Natter with Nick’ virtual events

with a selection of colleagues from across the

business

• met with colleagues from the People, Legal,

Communication and Company Secretarial teams

for a Q&A and feedback session

• attended the Mpride Pride Month lunch and learn

event

• attended the Q3 Inclusion Committee meeting

• visited the Leicester store and AMAZE Central

Leicester site

• attended a networking event with the senior

leadership team and with the rest of the Board

• attended a Revolution Update.

• Voice of the

Colleague survey.

• DNED letter published in

2023 Annual Report

• regular DNED updates to

the Board.

Colleagues fed back that they would benefit

from enhanced digital capabilities such as

increased automation to speed up processes and

the Board considers this carefully when making

investment decisions.

Alongside attending events with colleagues,

I regularly log into Viva Engage, an internal social

media tool for colleagues to share information,

ideas and socialise. The platform is self-

moderating, rather than top-down, and is used as

a solutions tool when colleagues have a question.

This helps me stay informed about colleague

concerns so I can escalate issues to the Board

if needed.

The Bank also has a platform called Recognize

that allows colleagues to call out each other’s

achievements and it was great to see colleagues

celebrating one another’s successes during

the year.

Looking forwards

A diverse, engaged workforce remains central to

our business model and the Board recognises the

evolving role of DNED, particularly as the Bank

embeds its recent transformation agenda. I look

forward to engaging with more colleagues and

championing their views in 2025.

Nicholas Winsor

Independent Non-Executive Director

22 April 2025

Metro Bank Holdings PLC Annual Report and Accounts 2024

Board leadership and company purpose

Matters reserved for the Board

The Board is responsible for setting and managing

the Bank’s strategic direction.

The Board has a formally documented schedule of

matters that are reserved for approval. This

includes decisions concerning the Bank’s strategic

aims and long-term objectives, the structure and

capital of the Group, financial reporting and

internal controls, risk management, and various

statutory and regulatory matters. The Board is also

responsible for effective communication with the

Bank’s shareholders, its culture, purpose and values

and any changes to the Board or Board Committee

membership or structure, and has authority to

recommend the Directors’ Remuneration Policy

to its shareholders. The Board delegates

responsibility for day-to-day management of the

business to the CEO and sets out the basis for

delegation of authorities from the Board to the

Board Committees.

Board Committees

The Board delegates specific responsibilities to

each of its Committees: Group Audit, Group Risk

Oversight, Group Nomination, and Group People

and Remuneration. All Committees are chaired by

an independent Non-Executive Director, except the

Nomination Committee, which is chaired by the

Chair of the Board. All committees comprise

independent Non-Executive Directors, except the

People and Remuneration Committee, where the

Chair of the Board (who was independent on

appointment) is also a member. In accordance with

the UK Corporate Governance Code, all members

of the Group Audit Committee are independent

Non-Executive Directors.

Each of the Committees has established Terms of

Reference setting out its duties, authority, and

reporting responsibilities, copies of which are

available on our website: metrobankonline.co.uk.

Role of the Board

The Board is accountable to our stakeholders for

setting the strategy to promote the long-term

success of the Bank. The Board is responsible for

oversight of the Executive Committee, governance,

internal controls, risk management, strategy, and

the overall performance of the Bank. The interests

of our stakeholders are always at the forefront of

the Board’s agenda.

Composition of the Board

As at the date of this report, the Board consists of

the Non-Executive Chair, the CEO, the CFO, five

independent Non-Executive Directors and three

shareholder-nominated Non-Executive Directors.

The Board has formally documented the separate

roles and responsibilities of the Chair and CEO.

More information on the composition of the Board

can be found on pages 50–51 and information on

the responsibilities of the Board can be found on

page 63.

The Terms of Reference of each Board Committee

are reviewed regularly to ensure they remain

appropriate and reflect any changes in legislation,

regulation, or best practice. These documents are

also reviewed formally every year by the relevant

Board Committee, then approved by the Board,

along with a self-assessment of how each Board

and Board Committee discharged their duties

during the year. The composition of each Board

Committee can be found within individual

Committee reports.

The Board also delegates the review of the Bank’s

disclosure obligations to its Disclosure Committee,

formed of the CEO, CFO, Company Secretary and

General Counsel. The Disclosure Committee also

has Terms of Reference approved by the Board,

which set out its duties and authority under the

listing rules.

Reports for each Committee can be found

on pages:

Audit Committee Report 66

Risk Oversight Committee Report 71

Nomination Committee Report 74

People and Remuneration Committee

Report 78

Governance framework

Executive

Committees

CEO

Group Risk

Oversight

Committee

Group People

and

Remuneration

Committee

Disclosure

Committee

Group

Nomination

Committee

Group Audit

Committee

Board

The Board’s core role is to promote the long-term success

of the Bank for the benefit of its shareholders. Alongside

the operating company Board, this requires us to:

• determine and review risk appetite.

• monitor management performance

in delivering our strategy

• ensure that risk management

measures and internal controls

are appropriate and effective

• oversee and monitor the embedding

of and adherence to the Bank’s

business values

• ensure that the Bank’s financial

structure, resources, talent and

culture will support long-term

growth. In discharging this role, the

Board must also have regard to and

engage with the interests of a wide

range of stakeholders, including

colleagues, customers, suppliers and

broader communities, in order to

build mutual trust and support the

long-term sustainability of

the business.

61Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Effectiveness

A clear record of the time commitments of each

Non-Executive Director is maintained and reviewed

annually by the Group Nomination Committee

and the Board is satisfied that the Chair and each

of the Non-Executive Directors are able to devote

sufficient time to the Bank’s business to be

effective in their roles. Each Director has

committed to dedicate as much time as is

necessary to the Bank in line with the time

commitment expectation set out in the

Non-Executive Directors’ letters of appointment.

Directors are expected to attend all meetings of

the Board, and the Board Committees on which

they serve. If Directors are unable to attend a

meeting, their comments on matters being

considered at the meeting are discussed in

advance with the Chair and/or Company

Secretary, so that their contribution can be

included in the wider discussion.

An externally facilitated review of the Board’s

Effectiveness in 2024 commenced in January

2025. Details as to the approach, outputs and

recommendations are set out on page 64.

Board skills

As part of succession planning, the Group

Nomination Committee maintains and reviews

a clear record of the skillset of each Director.

The Group Nomination Committee review

allows the Board to determine that each Non-

Executive Director has the skills and experience

to constructively challenge strategy and

scrutinise performance.

Independent Directors

The Board is satisfied that, as at 31 December

2024, five NEDs and the Chair were independent.

Directors’ continuing

professional development

The Company Secretary ensures that all Directors

are kept aware of changes in relevant legislation

and regulations. In 2024, the Board and Board

Committees received training sessions and/or

insight sessions on the UK Corporate Governance

Code, Director Duties, requirements under new

2024 Global Internal Audit Standards and

Transformation Pricing. Non-Executive Directors

attend seminars and briefings in areas considered

to be appropriate for their own professional

development, including governance and issues

relevant to the Board Committees on which they

serve. The Board is provided with relevant

legislation and regulatory updates via the Company

Secretary’s Report, a standing agenda item at

regular Board meetings.

Induction of new Directors

New Directors undergo a formal, robust and

tailored induction programme upon appointment,

which is agreed with the Chair and coordinated by

the Company Secretary. Non-Executive Directors

meet the Chair and the CEO as part of the Group

Nomination Committee’s selection process and

again on appointment for a thorough briefing

on all relevant aspects of the Bank. They also

meet other Directors, the Company Secretary,

ExCo and our advisors for briefings on their

responsibilities as Directors and on our business,

finances, risks, strategy, procedures and the

markets in which the Bank operates. Directors

receive an electronic induction pack upon their

appointment, which includes relevant Board

materials, Bank policies and corporate and financial

information. New Directors also receive listed

company director responsibilities training from

the Bank’s legal advisors.

External appointments

The Board reviews the external appointments of

new Non-Executive Directors before they are

appointed to the Board. The Board also authorises

additional external appointments that

Non-Executive Directors may wish to take up,

following due consideration of conflicts, regulatory

requirements and assurances provided that the

Non-Executive Director would still be able to

devote sufficient time to their Bank duties. The

external time commitments of our Non-Executive

Directors are reviewed on an annual basis by the

Group Nomination Committee.

In appropriate circumstances, the Board may

authorise Executive Directors to take non-

executive positions in other companies and

organisations. Such appointments should broaden

their experience, provided the time commitment

does not conflict with their fiduciary duties to the

Bank. Any appointment is subject to prior approval

by the Board. During the year ended 31 December

2024, none of the Bank’s Executive Directors held

directorships in any other quoted company.

Board culture

The Board places significant emphasis and

importance on sustaining the Bank’s unique culture.

During the year, the Board received regular reports

about colleague, communities and customer-

related activities across the business to support its

understanding of how culture is embedded within

the Bank. Presentations from ExCo members and

relevant senior management colleagues to the

Board during the year have provided culture-

related data from across the Bank. The Board’s

activities and examples of key decisions taken

during the year are set out on page 55. See pages

56–58 regarding how the Board engages with its

different stakeholders.

Colleague engagement

The Board has appointed a Designated

Non-Executive Director for Colleague Engagement

to engage with colleague representatives

throughout the Bank. The Board has approved

Terms of Reference setting out the duties,

authority and reporting responsibilities required

for this role. The Designated Non-Executive

Director for Colleague Engagement reports to the

Board biannually on the progress of workforce

engagement, initiatives, and activities. This

provides the Board with in-depth insight into how

the culture is embedded across our different

business areas and functions, and any issues that

need to be addressed. In addition, the views of the

Bank’s colleagues are measured through a biannual

anonymous Voice of the Colleague survey, which

gives our colleagues the opportunity to give

feedback and express their views on a variety of

topics including their own remuneration, culture,

leadership and policies and practices. An analysis

of the results of employee surveys is presented

to the Board. See pages 59 and 60 for more

information regarding colleague engagement.

Board leadership and company purpose continued

Metro Bank Holdings PLC Annual Report and Accounts 2024

Role Name Responsibilities

Chair Robert Sharpe

The Chair leads the Board and is responsible for its effectiveness

and governance. The Chair sets the tone for the Bank, including

overseeing the development of culture and standards in relation

to the conduct of business and the behaviour of colleagues. The

Chair sets the Board agenda and ensures that sufficient time is

allocated to important matters, in particular those relating to our

strategic direction. They report to the Board and are responsible

for the leadership and overall effectiveness of the Board,

including responsibility for fostering a positive Board culture that

reflects the values of the business. The Chair is also responsible

for ensuring that there are strong links between the Board, ExCo

and shareholders.

CEO Daniel Frumkin

The Chief Executive Officer (CEO) is responsible for the

day-to-day management of the Bank’s operations, for

recommending the strategic direction and for implementing the

strategic direction agreed by the Board. The CEO is supported

by the ExCo. The CEO reports directly to the Chair and to the

Board and is responsible for providing the Board with

appropriate information and updates.

CFO James Hopkinson

(resigned 12 January

2024)

Cristina Alba Ochoa

(from 12 January until

14 October 2024)

Marc Page

(joined the Bank on

2 September 2024.

Appointed to the Board

on 12 November 2024)

The Chief Financial Officer (CFO) is responsible for planning,

implementing, managing and controlling all financial-related

activities of the Bank, both day-to-day and long-term

management. The CFO is responsible for managing the Bank’s

financial position, including allocation and maintenance of

capital, funding and liquidity. They are also responsible for

producing and ensuring the integrity of the Bank’s financial

information and regulatory reporting. The CFO has oversight of

the Finance, Treasury, Strategy and Corporate Transformation

and Investor Relations functions of the Bank.

Company

Secretary

Clare Gilligan

The Company Secretary is responsible for advising and

supporting the Chair and the Board on good corporate

governance and best boardroom practice.

SID Catherine Brown

The Senior Independent Director’s (SID) role is to act as a

sounding board for the Chair and to serve as an intermediary

for Directors when necessary. The SID supports the Chair in the

delivery of their objectives and is available to shareholders to

hear their views and address any concerns they may have

that have not been resolved through normal channels. The SID

also acts as the conduit, as required, for the views of other

Non-Executive Directors on the performance of the Chair

and conducts the Chair’s annual performance evaluation.

Role Name Responsibilities

DNED for

Colleague

Engagement

Nicholas Winsor

The Designated Non-Executive Director for Colleague

Engagement (DNED) is responsible for bringing the views and

experiences of our colleagues into the boardroom. Working

with the Board and particularly management, the DNED takes

reasonable steps to evaluate the impacts of Board proposals

and developments on colleagues. The DNED engages with

management regarding colleague engagement and steps taken

to address colleague concerns arising out of business-as-usual

activities. The DNED reports regularly to the Board on activities

undertaken and feedback received, as well as presenting the

annual update for inclusion in the Annual Report and Accounts.

Consumer

Duty

Champion

Catherine Brown

(until 31 January 2024)

Nicholas Winsor

(from 1 February 2024)

The Consumer Duty Champion supports the Chair and CEO

in ensuring that Consumer Duty and customer outcomes are

raised regularly in all relevant discussions, and that the Board

is challenging management on how it is embedding the Duty

and focusing on consumer outcomes. The Consumer Duty

Champion will consider and challenge management on the

quality of product reviews, the effectiveness of fair value

assessments, communication standards and testing, the

ability to meet customer needs (including those considered

vulnerable) through the support the Bank provides, the

prioritisation of delivering customer outcomes when considering

this alongside other internal and external challenges, and how

effectively management embeds Consumer Duty into our

culture and governance.

Independent

NEDs

Catherine Brown

Paul Coby

Paul Thandi

Michael Torpey

Nicholas Winsor

The role of the Non-Executive Director (NED) is to constructively

challenge management on matters such as strategic direction of

the Bank. Each NED brings specific experience and knowledge

to the Board and its Committees. The NEDs have a broad

and complementary set of technical skills, educational

and professional experience, personalities, cultures and

perspectives. Their contributions provide independent views

on matters of strategy, performance, risk, conduct and culture.

Shareholder-

nominated

NEDs

Cristina Alba Ochoa

Dorita Gilinski

Jaime Gilinski Bacal

The shareholder-nominated NEDs’ role is to assist the Board

in ensuring that the views of the majority shareholder are

considered in Board decision-making and that there is a

shareholder voice in the Boardroom.

The composition of the Board Committees can be found within each of the Board Committee reports.

Board roles and responsibilities

63Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Board effectiveness

2024 Board effectiveness evaluation

In 2024, the Board commissioned an externally facilitated Board effectiveness evaluation in consideration

of the changes to the Board’s composition; the Bank’s share register; and pivot to corporate, commercial

and SME lending, and specialist mortgages. Following a rigorous selection process, Rise Regulatory

Consulting Ltd was engaged and, in January 2025, commenced a review of the Board’s performance

and effectiveness during 2024 and into 2025. Rise Regulatory Consulting Ltd does not have any other

connection to the Bank.

The review concluded that the Board is collegiate, committed and effectively led by the Board Chair.

The Board is effective in its oversight of the Executive Committee and provides constructive and robust

challenge to Executives. Areas for enhancement identified as part of the evaluation process, including

actions to deliver the enhancements, are detailed below.

Enhancement Area Action Identified

Balance of Board Focus

Rebalance the Board agenda to optimise distribution of time allocated to strategy

execution, business performance, transformation, and customer experience.

Board and Executive

Engagement

Enhance engagement between the Non-Executive Directors and the wider

first-line Executive team.

Board Paper Quality and

Oversight of Strategy

Execution

Consider further enhancements across core Board MI to enhance Board

insight into delivery of the revised growth strategy.

Strengthen adherence to the Bank’s reporting template to enhance clarity,

efficiency, and overall impact of Board and committee discussions.

Streamlining Agendas

Review the forward plans for the Board and each committee to identify

potential overlapping topics and discussions and streamline decision-making.

Systems of internal control

and risk management

The Board believes that effective risk management

is crucial to the Bank’s strategic objectives and long-

term success. The Board has overall responsibility

for ensuring risk is effectively managed.

Our approach to managing risk is further detailed

on pages 121–150. The Group Risk Oversight

Committee (ROC) reviews the effectiveness of the

Risk function and risk management processes on

the Board’s behalf, and its approach can be found in

the Group ROC Report on page 71. The Board

confirms that there is an ongoing process for

identifying, evaluating and managing the emerging

and principal risks faced by the Company.

The Board has delegated responsibility to the

Group Audit Committee for the review of the

effectiveness of internal control systems. More

detail can be found in the Group Audit Committee

Report on page 66.

The Board is ultimately responsible for the Bank’s

internal control and risk management systems, and

in discharging this duty, regularly receive updates

from the Chairs of both Group ROC and Group

Audit Committee as well as updates from the

CRO and Chief Internal Auditor (CIA). The Board

also approves the Internal Audit Plan on the

recommendation of the Group Audit Committee.

The Board is satisfied that the internal control and

risk management systems are operating effectively

and that they have been in place for the year under

review and up to the date of approval of the Annual

Report and Accounts.

Conflicts of interest

At each meeting, the Board considers the

Directors’ conflicts of interest. The Company’s

Articles of Association provide for the Board to

authorise any actual or potential conflicts of

interest. The Board will only approve a conflict of

interest if it believes that it would not have an

impact on the Director’s ability to carry out their

duties and responsibilities to the Company.

Prior to a new Director being appointed, potential

conflicts of interest are disclosed and assessed to

ensure that there are no matters which would

prevent the incoming Director from taking the

appointment and, during their tenure, Directors are

asked to consult with the Company Secretary and

the Board Chair before taking up any external

appointment or responsibilities. Prior to taking up

external appointments, consideration is given as to

whether the Director has sufficient capacity to take

on the additional role and still be able to devote

enough time to their role with the Company. Each

Directors’ conflicts of interest and external

appointments are considered by the Group

Nomination Committee annually.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Independent professional advice

Directors are permitted to take independent

professional advice at the Company’s expense if

required to enable them to fulfil their duties. In

addition, they have access to the advice and

services of the Company Secretary, who is

responsible for advice on corporate governance

matters to the Board.

Indemnities and insurance

We provide Directors and Officers of the Bank with

appropriate insurance for their appointment, which

is reviewed annually. In addition, Directors receive

an indemnity from the Bank against: (a) any liability

incurred by or attaching to the Director in

connection with any negligence, default, breach of

duty, or breach of trust by them in relation to the

Bank or any associated company; and (b) any other

liability incurred by or attaching to the Director in

the actual or purported execution and/or discharge

of their duties and/or the exercise or purported

exercise of their powers and/or otherwise in

relation to/or in connection with their duties,

powers or office other than certain excluded

liabilities, including to the extent that such an

indemnity is not permitted by law.

Appointment and retirement

of Directors

The Board may appoint Directors to the Board.

Newly appointed Directors must stand for election

by shareholders at the Annual General Meeting

following their appointment. In accordance with

the provisions of the Code, all continuing Directors

of the Company will offer themselves for annual

re-election at the 2025 Annual General Meeting.

Under the Articles of Association, shareholders

may remove a Director before the end of their

term by passing an ordinary resolution at a

general meeting.

Colleague engagement

For information on how the Directors have

engaged with colleagues, had regard for colleague

interests and how this has affected the principal

decisions taken by the Company during the

financial year, see page 56.

Other stakeholder engagement

For further information on how the Directors had

regard to the need to foster the Company’s

business relationships with suppliers, customers

and others, and what the effect of this

consideration has been, including on the principal

decisions taken by the Company during the

financial year, see pages 54–58.

Relations with investors

The Board continues to place great importance on

regular two-way engagement with investors. We

welcome engagement and dialogue throughout

the year as part of an ongoing process.

We connect with our investors on an ongoing basis

through a variety of channels including face-to-

face meetings, telephone calls, presentations,

webcasts and online content.

Investor meetings are undertaken by the Chair,

CEO and CFO, supported by the Head of Investor

Relations. Institutional investors have the

opportunity to meet with the Chair, Senior

Independent Director and other Non-Executive

Directors to discuss any areas of concern. In

addition, the Board Committee Chairs seek

engagement with shareholders on significant

matters related to the areas of their responsibility.

The Board now has three Non-Executive Directors

nominated to the Board by the Company’s majority

shareholder, Spaldy Investments Limited. This

reflects the strong relationships the Bank has with

its shareholders and as part of these Directors’ role

profiles, they are required to bring a shareholder

perspective to Board discussions so that

shareholder views are considered as part of the

Board decision-making process.

The Investor Relations function reports to the

Board on a regular basis on matters including share

price performance, changes in the shareholder

significant market updates, with the assistance

of the Bank’s corporate brokers. The Investor

Relations team is responsible for ongoing

communication with shareholders, analysts

and investors. All financial and regulatory

announcements, as well as other important

business announcements, are published on the

Investor Relations section of our website and

stakeholders can subscribe to receive news

updates by email by registering online on the

website: metrobankonline.co.uk/investor-relations/.

Contact details for the Investor Relations and

Company Secretary are available on the website

for any shareholders, analysts or investors who

wish to ask a question.

Board effectiveness continued

65Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

During a year of transformation for the Bank, the Committee’s core duties remained unchanged;

reviewing the integrity and quality of the Group’s published financial information; reviewing the

strength and effectiveness of the Bank’s regulatory reporting framework; supporting the Bank’s

governance framework; and maintaining focus on evaluating the effectiveness of the Group’s

control environment.

Michael Torpey

Group Audit Committee Chair

Group Audit Committee report

Dear shareholders

I am pleased to present the Group Audit

Committee (the ‘Committee’) report for the year

ended 31 December 2024. This report aims to

provide a comprehensive picture of the work

undertaken by the Committee during the year.

The Committee’s core duties remained

unchanged; reviewing the integrity and quality of

the Group’s published financial information;

reviewing the strength and effectiveness of the

Bank’s regulatory reporting framework; supporting

2024 highlights Committee composition and attendance for 2024

• assessed going concern and viability

• reviewed key accounting judgements

• had oversight of regulatory reporting

• reviewed the Bank’s published

financial information

• reviewed internal audit reports and regular

updates from the Chief Internal Auditor

• monitored the Group’s tax position.

Members Meetings attended

Meetings held during

Director’s tenure

Michael Torpey (Chair) 6 6

Catherine Brown 6 6

Nicholas Winsor 6 6

In addition to the Committee Chair, Michael Torpey, there

were two members of the Committee in 2024: Catherine

Brown and Nicholas Winsor. All were independent NEDs

with a range of relevant business experience. Michael has

recent and relevant financial experience, and the

Committee as a whole has competence in the banking

sector. For further details of members’ skills and experience,

please refer to their biographies on pages 50–51.

Paul Coby joined the Committee in 2025.

The Committee meets at least four times a year at

appropriate times in the reporting and audit cycle,

and otherwise as required.

Regular attendees at the Committee include the Chief

Internal Auditor, CRO, CFO, CEO, Board Chair and senior

members of the Finance team, representatives from the

External Auditor and the Deputy Company Secretary,

who is the Committee Secretary. The Committee Chair

also sits on the ROC and works closely with its Chair.

The ROC Chair also sits on the Committee.

the Bank’s governance framework; and maintaining

focus on evaluating the effectiveness of the

Group’s control environment.

The Committee continued to challenge and

scrutinise financial reporting throughout the year,

fulfilling our role of assisting the Board in

determining the appropriateness of financial

reporting. One of the Committee’s main

responsibilities is to inform the Board whether it

believes the 2024 Annual Report and Accounts is

fair, balanced, and understandable, and that it

contains all of the information essential for

shareholders to evaluate the Group’s position,

performance, business model and strategy. The

Committee is satisfied that the 2024 Annual Report

and Accounts meets this requirement and, in

particular, that there are appropriate disclosures

for relevant developments in the year (page 68).

During a year of transformation for the Bank, the

Committee has been focused on oversight of the

Group’s control environment and received regular

and robust updates from Internal Audit and the

External Auditor during the year.

More information on how the Committee has

oversight of the Bank’s control environment is set

out in detail on the following page.

Metro Bank Holdings PLC Annual Report and Accounts 2024

The Committee has also maintained close

oversight of key regulatory reporting matters and

the strength and effectiveness of the Bank’s

regulatory reporting framework, including

oversight of the Bank’s committees for regulatory

reporting and interpretation. This will continue to

be kept under close review as the Bank continues

with its transformation journey.

During the year, the Committee had briefings on

the UK audit and corporate governance reforms

and changes to the Global Internal Audit Standards

and continues to have oversight of the Bank’s plans

to comply with the updated guidance.

Committee evaluation

During the year, the Committee has continually

reflected on its effectiveness, considered how it

discharged its duties as set out in its Terms of

Reference, and reviewed and recommended

changes to this document to the Board for

approval. The Committee is satisfied that it

addressed all of its duties during 2024 and is well

placed to deliver on the same in 2025.

Group Audit Committee report continued

The Group Audit Committee in brief

• The Committee is accountable to the Board

and will assist the Board in fulfilling its

oversight responsibilities by reviewing and

monitoring the financial reporting process,

the system of internal control, the internal and

external audit processes, and the Bank’s

process for monitoring compliance with laws

and regulations and the code of conduct

• A key role of the Committee is to review the

integrity of the financial reporting for the

Bank. This includes:

 monitoring the integrity of the financial

statements and formal announcements

relating to the Bank’s financial performance

 reviewing and reporting to the Board on

significant financial issues and material

judgements

 reviewing and challenging accounting

policies, methods used to account for

significant and unusual transactions, and

clarity and completeness of disclosures

 the Committee is responsible for

overseeing the regulatory reporting

framework to ensure it is robust and

effective

 the Committee is responsible for advising

on whether the Annual Report and

Accounts is fair, balanced and

understandable

 the Committee has oversight of the

relationship with the External Auditor and

the effectiveness of the audit process.

During 2024, the Board conducted an externally

facilitated Board effectiveness evaluation. The

Committee was included in this evaluation and it

was concluded that the Committee is effective

with Committee members contributing to a

collegiate atmosphere. In line with the

recommendations, the Committee will ensure that

responsibilities for oversight of internal controls are

clearly defined between the Committee and the

Risk Oversight Committee.

Outlook for 2025

During 2025, the Committee will continue to focus

on management’s approach to key accounting

estimates and judgements, robust oversight of the

Bank’s financial reporting, the Bank’s capital and

liquidity position and the impact of strategic

changes on the Group’s risk and control

framework.

Michael Torpey

Group Audit Committee Chair

22 April 2025

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Group Audit Committee report continued

Significant financial reporting areas Review, challenge and conclusion by the Committee

Going concern

and viability

The Committee considered management’s approach to assessing and concluding on both going concern and viability. The assessment undertaken by management

focused on liquidity, capital and strategic risks.

The Committee also considered the Group’s strategy and Long-Term Plan with a review of potential downside scenarios to management’s central view and any mitigating

actions that could be taken.

After consideration, the Committee supported the approach adopted by management, which is set out in the Viability Statement on pages 46–47.

Impairment of

non-current assets

The Committee has kept impairment indicators in relation to the Group’s property, plant, equipment, intangible assets and subsidiary investments under review during the

year. Management ran an impairment assessment as required by IAS 36 ‘Impairment of Assets’ at the individual assets and the CGU level and the Committee considered

the results of this including associated sensitivities. Management also ran an impairment assessment for subsidiaries investment and considered the results of this

including associated sensitivities.

The Committee concurred with management’s view on impairment of intangible assets which are set out on pages 180–181, and on reversal of impairment of investment in

subsidiaries which are set out on pages 216–217.

Recognition of

deferred tax assets

The Committee considered whether a deferred tax asset should be recognised in relation to the Group’s unused tax losses (which were written off in 2019) as at

31 December 2024. The Committee agreed with management’s assessment that forecast future profits would enable utilisation of all brought forward losses. These have

been recognised as a deferred tax asset on the balance sheet as of 31 December 2024, with appropriate disclosures provided. The recognition is considered a critical

accounting estimate and judgement. Further details are set out on pages 171–173.

Measurement of

expected credit losses (ECL)

The Committee regularly reviewed management’s assessment of the adequacy of the allowance for ECL. The review included both modelled and individual loan

assessments, governance arrangements over provisioning and models, the use of post-model adjustments and overlays and a benchmark of the Group’s ECL against its

peers, as well as reviewing the components of the calculation (including SICR, definition of default, macroeconomic scenarios and scenario weightings).

The Committee agreed with management’s assessment that the measurement of the ECL allowance remained both a critical accounting estimate and judgement. Further

details are set out on pages 193–205.

Alternative performance measures

The Group continues to use alternative performance measures as it believes this provides readers with a greater understanding of underlying trends in the business. The

Committee reviewed whether management’s basis for underlying results remained appropriate, including reviewing items classified as non-underlying. Details on the

Group’s alternative performance measures can be found on pages 224–228.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Group Audit Committee report continued

Fair, balanced and understandable

In line with the Code, the Committee considered

whether the 2024 Annual Report and Accounts is

‘fair, balanced and understandable and provides

the information necessary for shareholders to

assess the Group’s position and performance,

business model and strategy’. The Committee

is satisfied that the 2024 Annual Report and

Accounts meets this requirement and, in particular,

that there are appropriate disclosures for relevant

developments in the year. The process which

enabled the Committee to reach this conclusion

included:

• compilation of the 2024 Annual Report and

Accounts was undertaken on a cross-functional

basis including input from senior managers

in Finance, Risk, People, Legal, Company

Secretariat, Investor Relations and business lines

• formal Committee review and challenge of the

draft 2024 Annual Report and Accounts, along

with a review of any issues raised in the External

Auditor’s report, in advance of final sign off

• final review, undertaken by the Board of

Directors

• the preparation of a going concern and viability

statement that highlighted the profitability,

capital and liquidity position of the Bank over

the planning period to 2028.

Internal audit

Internal Audit is a critical component of the Group’s

governance, risk management and control

functions, providing independent assurance over

key controls. The Committee:

• monitored the objectivity and competence of

the Internal Audit function, and the adequacy

of Internal Audit resources and skills and were

satisfied that Internal Audit had adequate

resources available during the year

• assessed the effectiveness of the Internal Audit

function throughout the year, including an

internal evaluation process that involved a range

of stakeholders and review of the outcomes of

a gap analysis against the new Global Internal

Audit Standards

• monitored the delivery of the 2024 Internal Audit

Plan, through reports provided by the Chief

Internal Auditor, and discussed areas of

significance identified in audits with

management

• recommended the 2025 Internal Audit Plan to

the Board for approval

• approved changes to the Internal Audit

Methodology.

The Committee Chair also met regularly with the

Chief Internal Auditor and made sure they had

access to the Board if needed.

The 2025 Internal Audit Plan focuses on those

areas considered to present the greatest risk to

the Bank and are of regulatory importance. The

Committee will monitor the resources available to

Internal Audit to make sure it can effectively deliver

the 2025 Internal Audit Plan.

Systems of internal control

and risk management

Details of the Bank’s risk management framework

are provided on page 122. In considering the

effectiveness of internal controls, the Committee

received and discussed reports from Internal Audit

and the External Auditor. In addition, management

was invited to discuss significant issues raised

by Internal Audit. Progress against delivery of

management action plans to resolve the issues

raised were monitored by the Committee. The

Committee also challenged management where

appropriate on the timeframe of the delivery of

these actions. In conjunction with the ROC, the

Committee reviewed and approved the statements

in the Annual Report concerning internal controls

and risk management.

Financial risk management processes and controls

are in place and the effectiveness of these controls

is assessed on an ongoing basis. The internal

controls framework encompasses all key controls,

including those relating to: financial reporting

processes; preparation of consolidated Group

financial statements; formulation of the Group’s

strategic plans, budgets and forecasts; accounting

policies and levels of delegated authority.

Regulatory reporting framework

The Committee has continued to focus on

ensuring that a strong and effective regulatory

reporting framework remains embedded within

the Group.

The Committee has oversight of the Bank’s

Regulatory Reporting Committee and Regulatory

Interpretation Committee. These committees

are designed to further enhance the Bank’s

governance and control of regulatory reporting.

External audit

The Group Audit Committee complied with the

requirements of the FRC’s Audit Committees and

the External Audit: Minimum Standard and the

Statutory Audit Services for Large Companies

Market Investigation Order 2014 for the year ended

31 December 2024.

The Committee reviews and makes

recommendations to the Board with regard to the

appointment of the External Auditor, including its

fees and terms of engagement.

The Committee is also responsible for the

oversight of the relationship with the External

Auditor and the effectiveness of the audit process.

During the year the Committee:

• reviewed and approved the scope of the 2024

External Audit Plan in advance of the annual audit

• reviewed and approved the audit engagement

terms and proposed audit fee.

• reviewed and approved in advance non-audit

services provided by the External Auditor

• considered the continued independence and

objectivity of the External Auditor

• reviewed and discussed the reports provided by

the External Auditor and the quality of work

undertaken

• met regularly with the External Auditor without

management present.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Group Audit Committee report continued

The Committee is satisfied that the External

Auditors demonstrated appropriate professional

scepticism and challenged the key focus of the

financial statements, including material and

judgemental areas. The External Auditors have

effectively provided insights in relation to the

financial assessment of the business throughout

the year and their insights have been appropriately

investigative and valuable, and their expertise

welcomed.

During the year, the Audit Committee Chair

received a report from the FRC which set out the

findings from its inspection of the audit work

completed by PwC on the financial statements for

the year ended 31 December 2023. No key findings

were identified, and an area of good practice was

noted. PwC discussed the review with the Audit

Committee Chair and the Audit Committee, and

the Committee agreed it was satisfied with PwC’s

responses to the areas of focus.

The Committee confirms that PwC continues to be

effective. The Committee has recommended the

reappointment of PwC as the Bank’s External

Auditors to the Board, and the Board has

recommended the reappointment to shareholders

for the next financial year at the 2025 AGM.

Independence

External Auditor independence is a key principle

and contributing factor to audit quality.

Independence is reviewed as part of the audit

scope, as part of reports PwC presented to the

Committee, and is further scrutinised prior to the

Annual Report and Accounts being approved and

signed by the Board.

PwC has been appointed as the Bank’s External

Auditor since 2009. The Bank is required under law

to put its audit out to tender at least every 10 years

and to change its External Auditor at least every 20

years. Our last formal competitive tender exercise

took place during 2018. In relation to the audit for

the year ended 31 December 2024, the Board

approved the Committee’s recommendation to put

a resolution to shareholders at the 2024 AGM to

reappoint PwC, which shareholders approved.

Following the Bank’s entry into the FTSE 250 in

November 2024, a review as to the most

appropriate time for the Group to re-tender its

statutory audit services will be undertaken in 2025

and confirmed in the 2025 annual report.

In line with the FRC’s Revised Ethical Standard

2019, the lead audit partner for the Bank rotates

every five years. Jon Holloway has led the Bank’s

external audit since the start of the 2021 financial

year. The Committee maintained a good rapport

with Jon and the PwC team throughout 2024.

Daniel Brydon will lead the Bank’s external audit

from the 2025 financial year onwards.

Non-audit services

The Committee carefully monitors the level of

non-audit services provided by PwC and

considered and approved the Bank’s Non-Audit

Services Policy during the year. All non-audit

services provided to the Bank by the External

Auditor must be approved in advance by the

Committee subject to the guidelines and

thresholds detailed in the policy.

Details of services provided and the fees paid to

the External Auditor during the year can be found

in note 8 to the financial statements on page 170.

The FRC’s Ethical Standard sets out a specific list of

permitted non-audit services for UK incorporated

public interest entities and the Committee was

satisfied that the Non-Audit Services Policy aligns

to the ethical standard concerning auditor

independence, and that the Bank complied with its

policy during 2024.

Modern slavery

The Bank has a Modern Slavery Policy that is

accessible to all colleagues via the Bank’s intranet.

The policy outlines the Bank’s zero tolerance

approach to modern slavery. The Chair of the

Committee is the Bank’s Modern Slavery

Champion and reports to the Board at least

annually on the effectiveness and integrity of the

systems and controls in place to ensure

compliance with the Modern Slavery Policy. In

2024, we continued to follow and progress our

processes to support our policy. We continue to

publish our Modern Slavery Statement yearly and

the General Counsel provides regular updates to

the Committee on progress against our statement

and action plan.

Whistleblowing

The Committee is responsible for review of the

adequacy and security of whistleblowing systems

and controls and reviews these at least annually.

The Bank’s Whistleblowing Policy is accessible

to all colleagues via the Bank’s intranet and there

is regular e-learning training for colleagues.

The Chair of the Committee is the Bank’s

Whistleblowing Champion. The policy outlines

the Bank’s whistleblowing process which enables

colleagues to raise concerns about possible

improprieties in financial reporting, other

operational matters or inappropriate personal

behaviours in the workplace.

Group Risk Oversight Committee report

2024 highlights Committee composition and attendance for 2024

• oversight of the Bank’s capital

and liquidity position

• review and endorsement of the

ICAAP and ILAAP and Market Risk

Assessment Process

• review and endorsement of the Bank’s

Resolvability Assessment Framework

• consideration and endorsement of the

Operational Resilience Self-Assessment

• review and endorsement of the Bank’s

Consumer Duty Annual Report

• review and challenge of detailed risk

assessment to inform the Board’s decision

to partner with outsourced services

provider Infosys

• ongoing focus on key risk areas including

Fraud, Financial Crime, Credit, Capital and

Strategy Execution Risk.

Members Meetings attended

Meetings held during

Director’s tenure

Catherine Brown (Chair) 10 10

Paul Thandi 10 10

Michael Torpey 10 10

Nicholas Winsor 10 10

Paul Coby joined the Committee in 2025.

In 2024, in addition to the Committee Chair, Catherine

Brown, there were three members of the Group Risk

Oversight Committee: Paul Thandi, Michael Torpey, and

Nicholas Winsor. NEDs who were not ROC members were

also permitted to attend meetings. The Board Chair, CEO,

CFO, Chief Internal Auditor, and CRO had standing

invitations to attend as guests, unless the Chair of the

Committee asked them to excuse themselves from a

particular meeting or discussion.

Other Directors and colleagues attended as guests by

invitation of the Chair to present and report on relevant

topics. The Company Secretary and her team acted as

Secretary to the Committee. The Committee met regularly

throughout the year in accordance with its Terms of

Reference. Where it was a transformational year for the

Bank, additional meetings were held when necessary.

Dear shareholders

I am pleased to present the Group Risk Oversight

Committee report for the year ended 31 December

2024, my first year as Chair of the Committee. It

was another busy year for the Committee, during a

period of transformation which has seen the Bank’s

strategic focus pivot towards corporate,

commercial and SME lending, and specialist

mortgages, alongside its usual activities relating to

oversight of key risks and internal controls and

monitoring top and emerging risks.

During the year, the Committee continued to

monitor closely the Bank’s capital and liquidity and

recommended the ICAAP, ILAAP, Resolvability

Assessment Framework and Market Risk

Assessment Process to the Board for approval.

Regulatory capital management has been a focus

for the Committee and will continue to be

monitored regularly. The Bank’s capital position

was strengthened by the sale of a portfolio of

prime residential mortgages which was completed

as part of the Bank’s strategy to reposition its

balance sheet and enhance risk-adjusted returns

on capital.

2024 was a transformational year for the Bank and one in which the Committee

supported the strategic pivot through continued focus on oversight of key and emerging

risks and internal controls.

Catherine Brown

Group Risk Oversight Committee Chair

71Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

The Committee provided oversight of the change

to the Bank’s risk profile as a result of moving to an

outsourcing model for some of our operational

processes. The Committee will continue to keep

this under review as the strategic collaboration

with Infosys develops.

Conduct and customer outcomes remained a

focus of the Committee in 2024, providing

oversight and endorsement of the Bank’s first

Consumer Duty Annual Report. The Bank continues

to drive activity to ensure fair outcomes for all

customers and, in support of this, the Committee

received regular updates on customer outcomes,

with particular focus on arrears management and

vulnerable customers.

Group Risk Oversight Committee report continued

Group Risk Oversight Committee in brief

The Committee is a committee of the Board. Its

specific responsibilities are set out in its Terms of

Reference which are reviewed annually and

available on the Bank’s website. Accountable to

the Board, ROC:

• provides oversight of risk and advises the

Board, as appropriate, on the risks posed to the

Bank from its continuing business activities

and future strategy

• provides leadership, oversight and direction

regarding the Bank’s risk governance and

management. It is charged with helping the

Board create an appropriate risk culture

across the Bank, which emphasises and

demonstrates the benefits of a risk-based

approach to risk management and internal

controls. The ROC is responsible for reviewing,

challenging and recommending to the Board

the Bank’s risk appetite, ICAAP document,

ILAAP document and Resolvability Assessment

Framework and major risk policies

• oversees risk management procedures and

reviews risk reports on key business areas

• receives regular management information and

reports concerning the Bank’s performance

against risk appetite and the measures set by it

and by the Board. Regular updates are

received on regulatory developments, and

consideration is given to how these will affect

plans, processes, systems and controls

• reviews the effectiveness of the ESG

framework, including managing and reporting

the financial risks from climate change

• promotes a consumer-centred culture through

consideration of the relevance and

implications of the FCA Consumer Duty

requirements in all matters

• ensures that the CRO has unfettered access to

the Committee and its Chair as a key part of

the Bank’s governance framework.

Oversight of financial crime continued to be a

priority during 2024. The FCA concluded its

enquiries (which commenced in 2020) into a legacy

issue relating to transaction monitoring systems and

controls that began in 2016 and were remediated by

2020. We are pleased that the conclusion of these

enquiries draws a line under this legacy issue. The

Bank continues to deliver enhancements to its

financial crime control framework and these will

remain subject to continued monitoring by the

Committee in 2025.

Throughout the year, the Committee considered

carefully credit risk and the Bank’s strategic pivot

towards higher yielding corporate, commercial and

SME lending, and specialist mortgages.

The Committee received regular updates on

the credit risk portfolio, including deep dives

into the performance of large commercial and

retail exposures.

The Committee considered operational resilience

throughout the year and received updates on

technology and third-party risks, alongside

approving the Bank’s annual Operational Resilience

Self-Assessment.

At the centre of the Bank’s relationship banking

strategy are our people. People risks and culture

were considered throughout the year by the

Committee and, in addition, the Committee

received an in-depth annual update.

Key policy documents kept

under review by the Group Risk

Oversight Committee in 2024

• Pillar 3 Disclosure Policy

• Operational Risk Management Framework

• Conduct Risk Framework

• Credit Risk Management Framework

• Enterprise Risk Management Framework

• Policy Governance Framework

• Prudential Risk Management Framework.

Policies reviewed and recommended

to the Board:

• Anti-Bribery and Corruption Policy

• Anti-Tax Evasion Policy

• Capital Management Policy

• Liquidity Policy

• Sanctions Policy

• Conflicts of Interest Policy

• Anti-Money Laundering and Combating

Terrorist Financing Policy.

As we go into 2025, the Committee will focus on

the Principal Risks as fully discussed in the Risk

Report on pages 121–150 and on supporting the

Bank as it continues its strategic pivot towards

corporate, commercial and SME lending, and

specialist mortgages.

Evaluation

The externally facilitated evaluation of 2024 Board

effectiveness included a review of the Committee’s

performance. The evaluation concluded that the

Committee is effective in terms of holding the First

Line of Defence accountable for risk management.

Recommendations included continuing to focus on

length and quality of papers to drive further

improvement.

Outlook for 2025

The Committee will continue to have oversight of

the Bank’s risk governance and management as we

deliver against our updated strategy. Particular

focus is planned on:

• strategy execution and business performance

• capital and liquidity management

• credit including safe delivery of our lending plan

• regulatory engagement and compliance

• conduct including customer outcomes

• fraud and financial crime

• operational resilience including technology

and our third party relationships

• information security and data privacy.

The following sections explain the role of the

Committee and summarise the main areas of

oversight for each of the Bank’s key risks.

Catherine Brown

Group Risk Oversight Committee Chair

22 April 2025

Metro Bank Holdings PLC Annual Report and Accounts 2024

Group Risk Oversight Committee report continued

Oversight of the Bank’s key risks

Bank Risk Report

This includes a summary from the CRO setting out items of note and

assessing the Bank’s performance against its risk appetite and risk metrics.

The report also includes a summary of top risks, issues under management,

the Bank’s performance against risk appetite, regulatory engagement, an

overview of operational incidents and credit portfolio insights.

Credit risk

Execution of strategy requires prudent and controlled management of credit

risk. To support this, one of the roles of ROC is to oversee credit underwriting

and ensure that the Bank has effective processes and controls to monitor

and manage credit risk, including where the risk position associated with a

significant customer or loan has deteriorated. The Committee regularly

reviews the performance of the loan portfolio including assessing the

impacts of a changing macroeconomic environment and ensures that

lending remains within risk appetite and policy exceptions are monitored.

Treasury and

prudential risk

The Treasurer provides a summary of relevant Treasury matters at each

ROC meeting, including balance sheet performance and each of the

principal prudential risks including liquidity and funding, capital and market

risks. The Treasurer also submits the ICAAP, ILAAP, and relevant Treasury

policies for approval and notes the minutes of the Asset and Liability

Committee, which is the primary executive committee for in-depth

discussion on Treasury and prudential risk matters. The Treasurer provides a

report to the Committee summarising ALCO activities, which include

high-level management information on liquidity, funding, capital and market

risks. In addition, the ALCO report includes updates on relevant regulatory

matters.

The Committee also receives a regular update from the second line risk

team on prudential risk, prudential risk appetite performance, regulatory

reporting oversight and model risk.

During the year, ROC reviewed and recommended to the Board for approval

the ICAAP, ILAAP, Resolvability Assessment Framework, Market Risk

Assessment Process and relevant policies.

Operational risk

The Committee receives reports concerning risk appetite and risk

assessments for overall operational risk and the underlying operational risk

categories including information security, data, technology, operational

resilience, fraud, third-party, and change. Information concerning material

incidents and losses are reported including how the Bank responds and

learns to prevent recurrence. The Committee also receives reports from

management on emerging operational risks and how these risks are

monitored and, where appropriate, mitigated.

Financial crime risk

Given the level of risk posed by financial crime to all banks, the Committee

reviews management information and performance against the Bank’s

financial crime key risk indicators. In addition to the ongoing review, quarterly

updates are escalated through the Bank’s governance to the Committee to

enable effective oversight of control enhancement activity.

Model risk

Given the use of models to support a broad range of business and risk

management activities, the Committee provides oversight of the

effectiveness of the Model Risk Management Framework. This includes

review of escalated findings in relation to specific modelling activities and

exposure against model risk appetite.

Regulatory,

conduct and

legal risk

The Committee is updated regularly on legal and regulatory developments

and changes that could impact the Bank, together with measures taken to

monitor and mitigate regulatory risk. The Committee receives updates on

compliance and conduct risk in the areas of culture and governance, product

governance, customer treatment and feedback from Voice of the Customer

surveys. The Committee is also updated on how the Bank manages

expressions of dissatisfaction, claims and litigation, and on the ongoing

compliance assurance work undertaken by the second line of defence.

Strategic risk

The Committee considers strategic risks that could result from or lead to the

crystallisation of one or more of the Bank’s other principal risks. At least

annually, it considers a comprehensive risk review of the Bank’s strategy and

Long-Term Plan and receives updates on the management of risk within

other key strategic initiatives.

Deep dives and

in-depth reviews

The Committee received in-depth reviews on areas of emerging risk and

regulatory interest throughout the year covering:

• cyber, information security and IT resilience

• vulnerable customer outcomes

• people and culture

• operational resilience

• fraud

• financial crime

• climate risk

• credit risk

• Consumer Duty.

73Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Nomination Committee report

2024 highlights Committee composition and attendance

for 2024

• approval of the appointments of

Cristina Alba Ochoa, Marc Page,

Jaime Gilinski Bacal and Paul Coby to

the Board, and the appointment of

Nicholas Winsor as Consumer Duty

Champion

• review of Executive succession plans

in May and October 2024, which

included consideration of the

Executive Committee’s collective

skills, experience, independence and

diversity, referencing the Bank’s

strategic priorities, market trends and

regulatory requirements

• review of Non-Executive succession

plans, including the Board Skills

Matrix

• reviewing the Board Diversity Policy

and the progress made against the

objectives set in the Policy

• review of the Committee’s Terms of

Reference, which included an

addition to the Committee’s remit to

have oversight of management’s

progress against the Bank’s Diversity

and Inclusion Strategy

• monitoring Directors’ actual and

potential conflicts of interest. The

Board has formal procedures to

appropriately manage any actual or

potential conflict of interest identified

and monitors each Director’s

independence. In accordance with

the Company’s Articles of

Association, the Board reviews, and

authorises as appropriate, situations

where a Director has an interest that

conflicts, or may possibly conflict.

Members Meetings attended

Meetings held during

Director’s tenure

Robert Sharpe (Chair) 4 4

Catherine Brown 4 4

Paul Thandi

3 4

1. Paul Thandi was unable to attend the November 2024 Committee meeting

due to a personal commitment.

The Nomination Committee comprises only Non-Executive Directors, the

majority of whom are deemed to be independent, in accordance with the

requirements of the UK Corporate Governance Code. The Committee Chair

is also Board Chair who was independent on appointment.

In 2024, the Nomination Committee met four times. The Senior Assistant

Company Secretary acts as a Secretary to the Committee and other

colleagues, such as the CEO, CFO, Chief People Officer, Company Secretary

and external advisors may be invited to attend all or part of any meeting when

appropriate. Following each meeting, the Chair provides an update to the

Board and approved Committee minutes are tabled for noting at future

Board meetings.

Dear shareholders

I am pleased to present the Nomination Committee

report for the year ended 31 December 2024.

The Committee has worked hard to support the

Bank in its pivot to a new strategy with the addition

of four new Directors to the Board, including the

Bank’s new CFO. This report will detail the work

undertaken by the Committee during 2024. I am

pleased with the work that the Committee has

undertaken to support the Board throughout

the year.

During 2024, we welcomed Cristina Alba Ochoa,

who joined the Bank as interim CFO on 12 January

2024 following the departure of James Hopkinson.

Cristina joined the Board as an Executive Director

on 10 June 2024 and upon the end of her tenure as

interim CFO, she was appointed as one of our

shareholder-nominated Non-Executive Directors. I

was pleased that the Board could retain Cristina’s

skills and experience as she had made a great

contribution to the Bank in her time as interim CFO.

Jaime Gilinski Bacal joined the Board in September

2024 as a shareholder-nominated Non-Executive

Director. Jaime has played an important part in the

Bank’s history as a shareholder, most importantly in

the capital raise at the end of 2023, and the Board

benefits greatly from his experience. This brings

The Committee has worked hard to support the Bank in its pivot to

a new strategy.

Robert Sharpe

Group Nomination Committee Chair

Metro Bank Holdings PLC Annual Report and Accounts 2024

the number of shareholder-nominated

Non-Executive Directors on the Board to three,

the maximum permitted under the Relationship

Agreement with the Bank’s majority shareholder.

In addition to these shareholder-nominated

Non-Executive Directors, Marc Page joined the

Bank in September 2024, and, following regulatory

approval, was appointed to the Board as Executive

Director and CFO in November 2024. Marc brings

a wealth of experience from his roles within

Barclays and will ensure the Bank’s focus on strong

cost discipline and revenue growth is maintained.

Further to these appointments, in December 2024,

Paul Coby joined the Bank as an independent

Non-Executive Director. Paul has extensive digital

transformation experience and this will be of great

benefit to the Bank.

Following these changes to the membership of

the Board, the independence of the Board is in

compliance with the requirements of the

Corporate Governance Code, with half of the

Board being made up of independent Non-

Executive Directors and the Board Chair being

independent on appointment. The Committee

will continue to evaluate the need for future

appointments to the Board, in line with the Bank’s

Non-Executive Director succession plans.

Outlook for 2025

In 2025, the Committee will continue to focus

on ensuring strong Non-Executive Director

succession plans are in place and reviewing the

skills required of the Board in line with the Bank’s

growth journey.

Robert Sharpe

Group Nomination Committee Chair

22 April 2025

Board composition

The Nomination Committee is responsible for

keeping the composition, structure and size of the

Bank’s Board and its Committees under review and

providing the Board with any recommendations for

changes that may be deemed appropriate. The

Committee’s role is to ensure that the Directors

have the skills, knowledge and experience required

by the Bank to provide effective challenge and

oversight of the delivery of the Bank’s strategic

objectives. The Committee concluded, following its

annual review, that the Directors have the skills,

leadership and ability to devote sufficient time to

provide the necessary oversight and proper

challenge to the Executive Directors, ExCo and

senior management. The Committee is also

responsible for ensuring that succession plans are

in place for the Bank’s Executive Directors and

Non-Executive Directors and discussion of these

succession plans formed an important part of the

Committee’s agenda in 2024.

The process for appointments to the Board is set

out in the Committee’s Terms of Reference. The

Committee recognises the importance of ensuring

a transparent and fair process for interviewing,

assessing and appointing new candidates to the

Board. The Committee is committed to the

requirement for a diverse list of candidates to

assist the Board in improving the diversity of the

Board and Board Committees over the long term.

During 2024, the Committee has worked closely

with Korn Ferry for NED recruitment. Korn Ferry is

also the Bank’s remuneration advisor and the

Committee considered that as Korn Ferry does not

advise the Bank on NED fees, this additional service

does not constitute a conflict of interest.

The roles and responsibilities of the Bank’s

Nomination Committee are detailed in its Terms of

Reference which are available on the Bank’s

website www.metrobankonline.co.uk/globalassets/

documents/investor_documents/nomination-

committee-terms-of-reference.pdf.

Committee performance evaluation

The Board had an externally facilitated

performance evaluation for 2024. This evaluation

concluded that the Committee is effective in

fostering informed decision-making and takes a

structured and disciplined approach to fulfilling

its defined remit. The recommendation to the

Committee was to enhance engagement with the

wider first-line Executive teams to assist with

succession planning.

Board Diversity Policy

and diversity statistics

The Board Diversity Policy (the ‘Policy’) sets out

the Board’s approach to diversity and inclusion.

The Committee is responsible for monitoring

progress towards the Board’s diversity objectives,

as set out in the Policy. The Policy acknowledges

that a diverse Board appointed on merit, with a

broad range of skills, backgrounds, knowledge

and experience, is more effective. The measurable

objectives for achieving Board diversity are

reviewed and discussed by the Committee at

least annually.

On gender diversity, the Board’s female

representation varied throughout the year (as

shown in the chart below) with the proportion

going from 25% up to 38% and then to 27% as at

31 December 2024. This falls short of the 40%

target for female representation and the

Committee will reflect this target when considering

future Board recruitment, noting that a diverse list

of candidates is required for any vacant Board

position as reflected in the Committee Terms of

Reference.

The position of Senior Independent Director (SID)

in 2024 was held by Catherine Brown.

Nomination Committee report continued

Board Diversity

75%

67%

73%

70%

33%

63%

25%

Female MaleKey:

01-Jan-24

01-Feb-24

01-Mar-24

01-Apr-24

01-May-24

01-Jun-24

01-Jul-24

01-Aug-24

01-Sep-24

01-Oct-24

01-Nov-24

01-Dec-24

31-Dec-24

71%

29%

38%

30%

27%

Additional information

Financial statementsStrategic report Risk report

Governance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Nomination Committee report continued

A summary of the objectives of the Board Diversity Policy and the progress made against these is listed in the following table.

Objectives Status

Considering candidates for appointment as Non-Executive Directors from a wide and diverse pool, which

includes a combination of skills, experience, ethnicity, age, gender, social, educational and professional

background and other relevant personal attributes such as cognitive and personal strengths to provide

the range of perspectives, insights and challenge needed to support good decision-making.

The appointment process, as laid out in the Committee’s Terms of Reference, requires the Committee

to put together a diverse list of candidates for any vacant Board role. The Committee has worked with

Korn Ferry in 2024 to assist with putting together a diverse list of candidates.

To improve the female representation on the Board to 40% as per the FCA’s Policy Statement PS22/3. As detailed on the previous page, the Board has not met its target of 40% female representation on the

Board, which is at 27% as at 31 December 2024. The Committee recognises that the Board has fallen

short of its target for female representation. As part of the Non-Executive Director recruitment

process, there is a requirement for a diverse list of candidates to be considered by the Committee for

any vacant Board positions.

Ensuring that at least one of the senior Board positions (Chair, Chief Executive Officer, Chief Financial

Officer, or Senior Independent Director) should be held by a female.

Catherine Brown was the SID during 2024. From January to September 2024, Cristina Alba Ochoa was

Chief Financial Officer. We are therefore meeting this objective in the Policy and the Listing Rules and

Disclosure Guidance and Transparency Rule 6.6.6 (9)(a).

Ensuring the Board’s ethnic diversity meets and maintains a minimum of one Director from an ethnic

minority background.

As at the date of publication of this report, we have three Directors from an ethnic minority

background appointed to the Board. We are therefore meeting Listing Rules and Disclosure Guidance

and Transparency Rule 6.6.6(9)(a).

Ensuring that the diversity of the Board’s committees is considered for all committee appointments. The Committee reviews committee memberships and considers that the membership of each of the

Board committees is sufficiently diverse.

Only engaging executive search firms who are committed to sourcing diverse candidates and who have

signed up to the voluntary Code of Conduct on gender diversity and best practice.

The Committee engaged with Korn Ferry to assist with the search for independent Non-Executive

Directors. Korn Ferry’s core values include a commitment to diversity, equality and inclusion.

Reporting annually against our objectives and other initiatives taking place within the Bank which promote

diversity.

More information on Diversity initiatives can be found on pages 23–25 in the ESG report.

Reporting annually on the outcome of the Board evaluation including the composition, structure and

diversity of the Board.

A disclosure on the external 2024 Board evaluation is set out on page 64.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Appendix 1: Director and Senior Management diversity

In accordance with Listing Rule 6.6.6R(10), the following tables set out numerical data on the gender and ethnic background of the Company’s Directors and Executive Management.

a) Table for reporting on gender identity or sex

Number

of Board

members

Percentage

of the Board

Number of senior

positions on the Board

(CEO, CFO,

SID and Chair)

Number

in executive

management

Percentage

of executive

management

Men 8 73% 3 5 50%

Women 3 27% 1 5 50%

b) Table for reporting on ethnic background

Number

of Board

members

Percentage

of the Board

Number of senior

positions on the Board

(CEO, CFO, SID

and Chair)

Number

in executive

management

Percentage

of executive

management

White British or other White (including minority-white groups) 8 73% 4 8 80%

Mixed/Multiple ethnic groups 2 18% – – –

Asian/Asian British 1 9% – 1 10%

Black/African/Caribbean/Black British – – – 1 10%

Other ethnic group, including Arab – – – – –

Not specified/ prefer not to say – – – – –

1. Per the definition within the Listing Rules, executive management within the Bank is ExCo and includes the Company Secretary.

Nomination Committee report continued

77Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Group People and Remuneration Committee report

2024 highlights Committee composition and attendance for 2024

• recommended the Directors’ Remuneration

Policy for approval, which was subsequently

approved by shareholders at the 2024 AGM

• approval of the remuneration for the interim

CFO and the Bank’s new permanent CFO

• review of colleague benefits, including

the administration and governance of

colleague pensions

• discussion on the Bank’s gender and

ethnicity pay gaps

• considered the Chief Risk Officer’s report

with regards to risk adjustment for

executive remuneration

• review of the Committee’s Terms of

Reference, which included a change to the

Committee’s remit whereby talent review

and diversity through the Bank was moved

to the Nomination Committee

• review of the Directors Remuneration Policy

for 2025.

Members Meetings attended

Meetings held during

Director’s tenure

Paul Thandi (Chair) 6 6

Catherine Brown 6 6

Robert Sharpe 6 6

In addition to the Committee Chair, Paul Thandi, the

Committee consists of two other members, Catherine

Brown, the Senior Independent Director, and Robert

Sharpe, the Board Chair. From January 2025, Paul Coby has

been appointed as a member of the Committee. The CEO,

Chief People Officer and Director of Reward &

Performance attend meetings by invitation, along with the

Committee’s appointed independent advisors, as described

on page 79.

The Chief People Officer and Director of Reward &

Performance provide support to the Committee Chair and

Committee as needed, and the Senior Assistant from

Company Secretary acts as Committee Secretary.

Following each meeting, the Chair provides an update to

the Board and approved Committee minutes are tabled for

noting at future Board meetings. In line with the Committee

Terms of Reference, papers such as the adoption of new

share plans, remuneration policy approach and NED fees,

are tabled for Board decision following review and

recommendation by the Committee.

Dear shareholders

I am pleased to present the Group People and

Remuneration Committee Report (the

‘Committee’).

This year was my first year as Chair of the

Committee and the first Directors’ Remuneration

Report following the approval of the Bank’s

Directors’ Remuneration Policy at the 2024 AGM.

I would like to thank shareholders for their support

of our remuneration resolutions at the last AGM,

with all remuneration resolutions receiving over

80% support. This report will set out how the

Committee has implemented the Directors’

Remuneration Policy, including the remuneration

for both Executive Directors, throughout 2024.

In addition, the Committee has reviewed the

Directors Remuneration Policy and is proposing a

new Policy to be presented to shareholders for

approval at the 2025 AGM.

I would also like to take this opportunity to

welcome Paul Coby, who joined the Committee in

January 2025 and look forward to working with

him over the coming period.

Paul Thandi

Group People and Remuneration Committee Chair

Following the transformation activity in 2024 and the focus on delivery of the business strategy,

the Committee has reviewed the current Remuneration Policy and is proposing a new Policy to

be presented to shareholders for approval at the 2025 AGM.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Our approach to Executive

Directors’ remuneration in 2024

2024 variable remuneration

2024 was a transformational year for the Bank,

in which, aligned to the business strategy, we

delivered a significant reduction in the cost base

and colleague numbers alongside pivoting the

business to deliver strong growth in our corporate,

commercial, SME lending and specialist

mortgages. In addition, the business formed a

new collaboration with Infosys, a world leader in

technology and business operations, which will

support the future business plans to deliver

automation, customer experience and AI

enablement.

As a result of the transformation, the Bank returned

to profitability in H2, which demonstrated

significant progress of the business over the year.

As a result of the performance, the formulaic

outcome under the 2024 Balanced Scorecard,

which drives the bonus outcome, was 78% of

target. However, management asked the

Committee to exercise its discretion to reflect the

continued focus on cost management and desired

position of delivering sustainable profitability and

maintaining its capital position. The Committee

accepted the recommendation and as a result

reduced the 2024 Balanced Scorecard outturn to

34.4% of target. The above performance resulted

in a total annual bonus award for the CEO and CFO

of 33.0% and 27.8% of the on target opportunity.

More information on the Balanced Scorecard

outcomes and assessment of individual

performance is set out on pages 103–106.

Awards under the Long-Term Incentive Plan (LTIP)

granted in June 2021 and March 2022 were

subject to performance over the respective three

and four financial years ending 31 December 2024.

The 2021 LTIP had a four year performance period

whereas the 2022 and subsequent LTIP grants

have a three year performance period. Under both

grants 40% of the award is subject to a relative

Total Shareholder Return (‘TSR’) performance

condition and 40% against a return on tangible

equity (‘RoTE’). Threshold performance was not

achieved for each element under either the 2021

or 2022 LTIP.

In relation to the risk and regulatory measure,

which comprised 20% of the 2021 and 2022

LTIP awards, the Committee considered the

recommendation from the Risk Oversight

Committee. Whilst the performance was

considered satisfactory, based on the financial

performance over the period, the Committee

concluded that both the 2021 and 2022 LTIP

awards would lapse in full at the end of the

vesting period.

As a reminder, no variable remuneration was paid

to the Executive Committee in annual bonus or

through the LTIP for the 2023 performance period.

Board changes

A number of Board changes are mentioned

elsewhere in the Annual Report and Accounts; I will

summarise them here in the context of reporting

on the implications for remuneration.

As disclosed last year, James Hopkinson stepped

down as Executive Director on 12 January 2024.

Details of the termination arrangements were

outlined initially in the remuneration statement

posted on the Bank’s website. The Committee

determined that these termination arrangements

were fair and reasonable, consistent with the

Directors’ Remuneration Policy and in line with his

contractual entitlements.

The Committee considered the remuneration for

the appointment of Cristina Alba Ochoa as the

Bank’s interim CFO in January 2024, which did not

change upon Cristina’s appointment to the Board

as an Executive Director on 10 June 2024. The

Committee also considered the remuneration for

the Bank’s new permanent CFO, Marc Page, ahead

of him joining the Bank in September 2024. Marc’s

remuneration is in line with the Director’s

Remuneration Policy and also included a buyout

award. Full details of Marc’s remuneration is

included on page 103. The buyout award has been

structured to match the terms of the deferred

remuneration forfeited at Marc’s previous

employer.

2025 Directors Remuneration Policy

Following the transformation activity in 2024

and the focus on delivery of the business strategy,

the Committee has reviewed the current

Remuneration Policy and is proposing a new policy

to be presented to shareholders for approval at the

2025 AGM. The new policy is designed to support

the continued sustainable growth of the business,

whilst maintaining the focus on our customers and

capital position.

The principle components of remuneration under

the 2025 policy will be salary, pension and benefits,

as per the current policy, along with an annual

bonus with the structure being aligned with market

practice, and a new long-term incentive plan

aligned to the business strategy.

Group People and Remuneration Committee report continued

Advice to the Committee

The Committee takes information and advice

from inside and outside the Group. Internal

support was provided by the Chief People

Officer, the Director of Reward & Performance,

and other senior leadership as appropriate. No

individual was present when matters relating to

their own remuneration were discussed.

The Committee seeks advice from independent

external advisers as appropriate. Following Korn

Ferry’s appointment in 2023, the Committee

continued to engage with Korn Ferry for

independent advice in 2024. The Committee

completed an evaluation of Korn Ferry’s

performance in November 2024 and was

satisfied with the support it had received and

that the advice it receives is objective and

independent. Korn Ferry was also used by the

Group Nomination Committee to assist in

independent Non-Executive Director

recruitment. As Korn Ferry does not advise the

Committee on Non-Executive Director

remuneration, the Committee is satisfied that

there are no conflicts of interest resulting from

Korn Ferry’s appointment. The fees paid for

services provided by Korn Kerry to the

Committee in 2024 were £47,392.50 (2023:

£10,683) inclusive of VAT. Fees were determined

on a time and expenses basis.

Fixed pay

The current policy on fixed pay is unchanged and

as such will consist of salary, market competitive

benefits and pension. The pension policy was

updated in 2024, in line with current practice, and

limits the pension contribution for Executive

Directors (or cash in lieu thereof) in line with the

rates applicable to the workforce, at 8% of salary

currently.

Annual bonus

The maximum opportunity under the annual bonus

is being increased to 150% of salary to provide the

flexibility to reward exceptional performance. This

is being updated following a review of market

practice to ensure variable remuneration remains

competitive and in line with the market.

The Balanced Scorecard will determine the

majority or all of the annual bonus and the

remainder being based on individual and cultural

metrics. The Balanced Scorecard will continue to

be predominantly based on Financial Performance.

79Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Group People and Remuneration Committee report continued

New Shareholder Value Alignment Plan (SVAP) – At a glance

• Participants share in the growth in the value of

the business over the period to 31 December

2029

• The participant value pool will be calculated

based on 5% of the growth in value of the

Bank. The baseline Company value from

which growth is measured will be the market

value equivalent to a share price of 80p

• Growth will be calculated based on total

shareholder return, i.e. adjusted for dividends

declared, and other capital events during the

period and will be measured over the five

financial years to 31 December 2029, with

three test dates, 31 December 2027, 31

December 2028 and 31 December 2029

• There is a minimum growth hurdle such that

the market value at each Test must be at least

50% higher than the baseline value (currently

equivalent to a share price of at least £1.20)

before participants are eligible to receive their

allocation

• At each Test date, the Participant Value Pool is

split between participants based on each

individual’s Participant Allocation. The

Participant Allocation gives the individual a

right to receive the requisite value of nil-cost

options, including taking into account

expected dividend yield over the remaining

vesting period

• Awards will be in the form of a share

instrument which provides the right to nil cost

options to the value of the Participant

Allocation determined at each Test. Vested

awards may be paid as a cash equivalent

instead of shares. Nil cost options expire on

the tenth anniversary of grant

• In addition to satisfying the above

performance conditions, options may only be

exercised at each vesting date considering (i)

the capital and liquidity positions; (ii) material

risk issues, in the judgement of the Committee

(iii) profitability. Vesting may be reduced, and/

or delayed to the extent appropriate.

An overview of the metrics for 2025 is provided on

page 113. A portion of any payout will continue to

be deferred, in line with regulatory requirements,

which currently requires at least 60% of variable

remuneration (annual bonus and any long-term

incentive) in respect of a financial year to be

deferred with a vesting period of at least three

years, increasing to up to seven years where

required by regulation.

Shareholder Value Alignment Plan

The Committee has considered the approach to

long-term incentives in light of the Bank’s strategic

goals. The Policy therefore has been updated with

a new long-term incentive plan, the Shareholder

Value Alignment Plan (SVAP), which incentivises the

sustained growth of the business over the five year

period to 2029 (and with deferred vesting through

to 2032) while maintaining the focus on customers,

risk and the financial position of the Bank.

The SVAP is aligned with the sustained growth in

value of the Bank, with performance measured

over five years to 31 December 2029 and vesting

over seven years to May 2032. This ensures that

the participants are incentivised to grow the value

of the business and for the value to be sustained

over the long-term. The inclusion of risk and capital

conditions at the time of the performance tests

and on vesting ensures that there is a balanced

approach to assessment and that the growth is not

delivered at the expense of the underlying business

performance.

For the avoidance of doubt, the SVAP is a one-off

award with no further long-term awards made to a

participant during the rest of the term of the

new policy.

Remuneration in 2025

Salary adjustments

There were a number of changes that affected

the Bank’s colleagues, including the redundancies

announced at the beginning of 2024, with further

changes throughout 2024. The Bank’s focus on

cost discipline meant that the Committee was

limited in its ability to provide salary increases to

colleagues, but the Committee felt strongly that

those colleagues that have remained with the Bank

through 2023 and into 2024 should be rewarded

appropriately. The Committee therefore approved

a minimum salary uplift of 2% for all eligible

colleagues, with further uplifts focused on the

Bank’s customer-facing roles. The 2% uplift also

applied to the Executive Directors increasing the

CEO salary to £943,500 and CFO salary to

£510,000.

2025 Annual Bonus

There has been no material change in the design

and structure of the annual bonus for 2025, apart

from the increase in the maximum opportunity to

150% for the Executive Directors.

A summary of the metrics and weightings is

provided on page 113 and full retrospective

disclosure of the targets and performance against

them will be set out in the 2025 Annual Report and

Accounts. A portion of the bonus will be deferred

in line with regulatory requirements.

SVAP

Subject to shareholder approval at the May 2025

AGM, a grant under the new long term Plan will be

made to the CEO and CFO of 2.5% and 0.5% of the

overall 5% participant value pool.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Group People and Remuneration Committee report continued

The Group People and

Remuneration Committee in brief

The Committee leads the process for

reviewing the remuneration practices

of the Bank and approving the executive

remuneration structure and outcomes. Its

duties include to:

• determine the Directors’ Remuneration

Policy (the ‘Policy’) and recommend its

approval to the Bank’s Board and then the

Bank’s shareholders

• review and have regard to the pay and

employment conditions across the Company

and the alignment of incentives and rewards

with the Bank’s culture

• approve the design of, and determine the

targets for, any performance-related reward

schemes operated by the Bank and approve

the total annual payments under such

schemes

• exercise independent judgement and

discretion when authorising any

remuneration outcomes

• oversee the Bank’s remuneration approach

to those colleagues considered Senior

Management Function holders, Material Risk

Takers and those in Certified Roles

• seek advice from the CRO and Chair of the

Risk Oversight Committee on risk adjustment

as it applies to executive remuneration

• engagement with the Bank’s shareholders,

and other stakeholders, on the Bank’s

remuneration decisions.

Regulatory change

As a Committee, we have reflected and discussed

the ongoing debate around the competitiveness of

UK remuneration, including proposed changes to

banking remuneration regulations. The Committee

plans to consider the implications in the coming

months in terms of its approach to remuneration

for 2026.

Wider Workforce

The Committee’s priorities for 2025 remain similar

to those for 2024. They include oversight of the

Bank’s retention of colleagues, review of the Bank’s

approach to executive remuneration, and

consideration of the Bank’s pay structure to ensure

that it is efficient in incentivising and attracting

appropriately skilled colleagues to deliver the

Bank’s strategic goals.

Committee Evaluation

The externally facilitated evaluation of 2024 Board

Effectiveness included a review of the Committee’s

performance. The evaluation concluded that the

Committee is effective, with the Chair actively

seeking input from all members to facilitate

collaborative decision-making. No major

recommendations were made relating to the

Committee.

Concluding remarks

At the 2025 AGM, shareholders will have an

opportunity to vote on both the new Remuneration

Policy and how the Committee has implemented

the Directors’ Remuneration Policy approved by

shareholders in 2024. There will also be a separate

resolution for shareholders to approve the SVAP.

I hope that you understand the rationale set out in

this report for how we have implemented the 2024

policy and the proposed new 2025 Policy, which

aligns reward to the strategic pivot. The changes

proposed will ensure the interests of the Bank,

colleagues, customers and shareholders’ continue

to be fully aligned, and focused on delivery of

the Bank’s strategic objectives. Should you have

any comments or questions, please direct

correspondence via the Group Company

Secretary (email: CompanySecretary@metrobank.

plc.uk) and I will be happy to provide further details.

Paul Thandi

Group People and Remuneration Committee Chair

22 April 2025

Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Executive Directors’ remuneration in 2024

As a result of the Company’s full year 2024 performance (against financial, ESG and strategic measures),

the Balanced Scorecard outcome demonstrated the successes of the ambitious transformation plans and

positive progress on the strategic priorities. On the non-financial measures, the Bank performed in line with

expectations. The formulaic outcome under the 2024 Balanced Scorecard which underpins the annual

bonus outturn was 78%. However, given the transformation journey and the importance of laying the

foundations with strong cost management, the Committee, with the agreement of management, exercised

its discretion to reduce this outcome to 34.4%. The 2024 total remuneration outcome is shown below and

more details on the progress against individual performance measures is shown on pages 103–106.

Remuneration at a glance

2024 total remuneration

Pay for performance at a glance

• variable remuneration for Marc Page included the buyout and lost opportunity award

• fixed remuneration for Cristina Alba Ochoa relates to her time as an Executive Director

• fixed remuneration for James Hopkinson relates to his time as an Executive Director up to 12 January 2024

• James Hopkinson and Cristina Alba Ochoa were not eligible for 2024 variable remuneration in respect of their respective

time as Executive Directors during 2024.

The following table shows the 2024 Balanced Scorecard outcomes used to inform annual bonus decisions. The formulaic outcome was 78.0%, the Committee accepted Management’s recommendation that

discretion be applied to adjust the outcome to 34.4%.

54.0%

Financial

Risk and Regulatory

Customer

People and community

5.5%

0.0%

11.0%

7.5%

0.0%

Threshold Target Maximum

2024 weighted outcome

Actual performance Range from threshold to maximum

Total

78.0%

Underlying proﬁt (45%)

Net interest margin (5%)

Cost (10%)

Relationship with regulator and risk breaches (20%)

Net promoter score and expressions of dissatisfaction (10%)

Includes diversity and colleague engagement (10%)

Daniel Frumkin

Chief Executive Oﬃcer

£1,001,156 £153,003

Cristina Alba Ochoa

Former interim Chief Financial Oﬃcer

£392,823

James Hopkinson

Former Chief Financial Oﬃcer

£18,112

Marc Page

Chief Financial Oﬃcer

£180,335

Fixed remuneration

Annual Bonus

£361,014

2024 variable remuneration outcomes

Daniel Frumkin Marc Page

2024 variable remuneration outcomes

2024 annual bonus (% of salary)

16.5% 13.8%

LTIP vesting (as % of maximum) 0% n/a

Total single figure of remuneration £1,154,159 £541,349

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration at a glance continued

The table below summarises how it is proposed that the remuneration policy will apply for Executive Directors in 2025.

Executive Directors’ remuneration in 2025

When remuneration is delivered

2025 2026 2027 2028 2029 2030 2031 2032

Fixed remuneration

Salary

Benefits

Pension

Variable remuneration

Annual bonus

SVAP

Performance period

Part of bonus deferred for up to seven years in shares and cash.

Malus and clawback provisions apply

Shares vesting following each test between three and seven years

Malus and clawback provisions apply

Implementation in 2025

• Salary: Daniel Frumkin £943,500 and Marc Page £510,000.

• Core benefits such private healthcare cover, life assurance and other standard benefits.

• Pension contribution and or cash allowance of 8% of salary.

• Annual bonus maximum of 150% of salary; measures are 60% financial and 40% based on ESG and/

or other priorities.

• SVAP: The Plan incentivises growth over the five-year period to 31 December 2029.

• In aggregate, at least 60% of variable remuneration deferred for between three and seven years.

• Any shares (as part of the any deferred bonus or the SVAP) are subject to further 12-month

mandatory retention after each vesting date.

Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration at a glance continued

Aligning our remuneration approach to business strategy and stakeholder interests

Our service is what makes us special. Putting customers first is, and always will be, the key to our success. Through our dedicated colleagues, we build long-lasting and personal relationships with our customers and

our communities, giving them the banking they need.

Our remuneration approach is aligned to our strategy, thereby incentivising, as appropriate, great customer service and the creation of long-term value for all of our stakeholders. The following table provides a

summary of how our variable remuneration framework in 2025 is aligned with our business strategy and the results that it delivers.

The Committee believes that its executive remuneration policies and practices support the Bank’s strategy and promote long-term sustainable success, with reward linked to the successful delivery of such long-term

strategy. Remuneration, including variable remuneration, is aligned to the Bank’s purpose and values (see page 2), with a focus on customers and other stakeholders an integral part of executive remuneration.

Short Term Long Term

Cornerstone Focus Balanced Scorecard 2025 SVAP

Relationship Banking

remains our key

differentiator

SME/Corporate/

Commercial Banking

Financial Underlying P/(L)BT

Net Interest Margin

Return on Tangible Equity

Underlying Operating Expenses

Gateways

CET1 capital

Liquidity Coverage Ratio

Growth in Metro Bank Value

Specialist Mortgages

Non Financial Risk Relationship with Regulators

YTD/FY number of breaches of red limits for tier 1 appetite metrics

12mth NPS relationships retail and business

Good Customer Outcomes

Community Banking

Customer

Gateway

Minimum growth hurdle

of 50% higher than

baseline value

Liquidity and Capital

People Focus

People &

Community

E-sat (How happy are you working at Metro Bank)

YTD/FY Diversity % ethnic minority in senior roles

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration at a glance continued

How the proposed Directors’ Remuneration Policy addresses the key features set out in the UK Corporate Governance Code

The following table summarises how the Directors’ Remuneration Policy fulfils the factors set out in provision 40 of the 2018 UK Corporate Governance Code (‘the Code’).

Clarity

Remuneration arrangements should be transparent and promote

effective engagement with shareholders and the workforce.

The Committee is committed to providing open and transparent disclosures to shareholders and colleagues on its Executive Director remuneration

arrangements.

Colleagues are able to express their views on pay through regular surveys and feedback, as well as through our DNED.

Simplicity

Remuneration structures should avoid complexity and their rationale

and operation should be easy to understand.

Our approach to remuneration for Executive Directors is simple and transparent. It is consistent with structures used widely across the financial

services industry.

Risk

Remuneration arrangements should ensure reputational and other

risks from excessive rewards, and behavioural risks that can arise from

target-based incentive plans, are identified and mitigated.

In line with regulatory requirements, our remuneration practices promote sound and effective risk management while supporting our business

objectives.

For 2025, 20% of our annual bonus balanced scorecard will be based on risk and regulatory measures, and the determination of annual bonuses is

subject to a risk adjustment process and input from the Chief Risk Officer (CRO) and the Chief People Officer (CPO).

The deferred portion of any bonus as well as SVAP awards granted to Executive Directors vest between years three and seven, during which malus can

be applied. SVAP awards only vest assuming the threshold of growth has been met as well as satisfaction of the vesting conditions.

Vested variable remuneration awards are subject to our clawback policy for a period of up to seven years from the award date (extending to ten years

where an investigation is ongoing).

Predictability

The range of possible values of rewards to individual directors and any

other limits or discretions should be identified and explained at the

time of approving the policy.

Variable remuneration is delivered primarily through share based awards. The value of awards is therefore closely aligned to share price movements

and the shareholder experience.

The potential value and composition of the Executive Directors’ remuneration packages at below threshold, target and maximum scenarios are

provided later in the report.

Proportionality

The link between individual awards, the delivery of strategy and the

long-term performance of the Company should be clear. Outcomes

should not reward poor performance.

Variable remuneration payments require robust performance against challenging measures and targets. Performance conditions have been designed

to drive the delivery of our business strategy and consist of a number of financial and non-financial metrics, as well as individual performance based on

the individual’s AMAZEING review.

The Committee has discretion to override formulaic scorecard outcomes to ensure that they are appropriate and reflective of overall performance.

Alignment to culture

Incentive schemes should drive behaviours consistent with company

purpose, values and strategy.

The primary objective of our remuneration framework is to support growth and our long-term success while reinforcing our unique culture.

The bonus pool for any year is based on the Bank’s overall performance in terms of culture and delivery in line with the Balanced Scorecard.

All colleagues are able to participate in our HMRC approved share incentive plan, which supports our ethos of colleague buy-in and ownership.

Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration at a glance continued

How the proposed Directors’ Remuneration Policy addresses the key features set out in the UK Corporate Governance Code continued

In accordance with Code Provision 41, the Directors’ Remuneration Report describes the work of the Committee, including those areas mentioned in that Provision. The table below highlights some of those areas:

Provision Approach

Operation of policy

The Committee believes that the Remuneration Policy operates as intended in terms of the Bank’s performance and the quantum of remuneration delivered.

Shareholder engagement

We will engage stakeholders in the run up to the 2025 AGM as we seek shareholder approval for the new remuneration policy.

Workforce engagement

An outline of our approach to workforce engagement is set out on page 102.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration for colleagues below Board level

Summary of the Remuneration Structure for colleagues below Board level

The Committee is directly responsible for the remuneration of the Executive Directors, the Executive Committee (ExCo) and other executives who have been identified as material risk takers under the relevant

regulators’ remuneration rules.

The Committee is also given regular updates and, as required, takes key decisions on benefit, pension and incentive arrangements that cascade through the organisation. During the year, the Committee received

updates on key activities and discussed material changes to all employee remuneration policies and arrangements. In 2024, there was also a review of colleague benefits, including the administration and governance

of colleague pensions.

The Bank is committed to ensuring its workforce has the diversity of talent and expertise that it needs for the business to continue to grow and innovate. Our people are critical to us achieving our strategy and the

Committee is committed to ensuring our people are rewarded fairly and competitively for their contribution to our success.

Our approach to remuneration for colleagues below Board and ExCo level is similar for all colleagues. Whilst variable remuneration for the ExCo is delivered differently to that for the wider colleague population, it is

consistent across this small group of colleagues. The focus is on simplicity, rewarding the right behaviours and outcomes for customers and the business, whilst discouraging unnecessary risk taking.

Salary Benefits Pension Variable Remuneration

• The quantum of salary increases is primarily

driven by the external market, capability and

affordability.

• We also review salaries for roles that we deem

are growing rapidly in scale and/or complexity

and are critical to the business and for those

colleagues which market data suggests are

falling behind the market rates for their roles.

• Colleagues are eligible to participate in private

medical insurance or other health related plans

funded at different rates of cover depending on

their level.

• All colleagues, including the ExCo, receive life

assurance cover of four times their salary.

• All colleagues can participate in the our Group

Personal Pension Plan when they join the Bank. If

they have exceeded the annual pension tax-free

contribution limit, they may be eligible to take

cash in lieu of pension for some or all of the

benefit.

• Employer pension contributions are up to 10%.

• Colleagues participate in the same annual

bonus plan with a single scorecard and a

consistent company performance adjustment

factor.

• For all colleagues whose personal behaviours

and delivery are as expected or better, we apply

an adjustment factor.

• Where appropriate and required by regulations,

variable remuneration may be deferred and/or

delivered in shares.

Regulators’ rules require the Bank to identify colleagues who are Material Risk Takers (MRTs): these are individuals who operate in roles deemed to have, or potentially have, a material impact on the risk profile of the

Bank. The Bank classified 66 colleagues as MRTs in 2024 (2023: 59).

The remuneration approach taken for our MRT population differs from that of the wider colleague population. To align the interests of our MRT population with those of our shareholders, we may deliver a portion of

variable remuneration in retained shares, deferred cash, deferred shares, and where appropriate, awards under the long-term incentive plan. Further information relating to remuneration of our MRT can be found in

our 2024 Pillar 3 disclosure.

Alignment between our approach to Directors’ remuneration and other colleagues

In developing the proposed remuneration policy, the Committee carefully considered the remuneration arrangements across the Bank. The Committee receives information on wider workforce demographics and

remuneration on a regular basis to ensure that the Committee has a good understanding of the structure and application of reward policies throughout the organisation.

When making decisions about executive remuneration, the Committee ensures, for example, that pay review budgets for the Bank’s executives are typically set at levels which mirror those being applied for other

colleagues. In addition, all colleagues’ annual variable remuneration is linked to the delivery of the Bank-wide Balanced Scorecard, through which the Executive Directors are incentivised.

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Remuneration for colleagues below Board level continued

Gender pay gap reporting

The Company’s 2024 Gender Pay Gap Report, published in March 2025, shows that on a median basis, our gender pay gap is 15.7 % (2023: 16.7%). This compares with a national average gender pay gap of 13.1% across

all industries, calculated by the Office of National Statistics (ONS) published in October 2024: gender pay gaps tend to be higher in financial and banking organisations.

We expect to see small changes in the total pay gap each year due to changes in the composition of the workforce and hiring patterns, which can vary between men and women year-on-year. Further information can

be found in the Environmental, Social and Governance section on page 19.

Year-on-year change in colleague and Directors’ remuneration

We monitor year-on-year changes between the movement in remuneration for executives compared with the wider colleague population.

The relevant disclosure requirement is for this comparison to be made against the employees of the parent company. On the basis that Metro Bank Holdings PLC, the parent company, does not employee any

colleagues, we have voluntarily disclosed this information.

The table below sets out the year-on-year percentage change in salary, benefits, and annual bonus for the Directors of the Board against an average full-time equivalent colleague. The Committee considers three

consecutive measurement periods an appropriate level of insight. The percentage increases or decreases in the table below reflect changes in populations year-on-year or, in the case of Directors, changes in

responsibilities, e.g., Committee memberships, or that the individual was not a Director for the whole year. Percentages for Directors are calculated using the respective figures in the single total figure for the

remuneration.

Salary/Fees % change Taxable benefits % change Annual bonus

2024 vs 2023 2023 vs 2022 2022 vs 2021 2024 vs 2023 2023 vs 2022 2022 vs 2021 2024 vs 2023 2023 vs 2022 2022 vs 2021

All colleagues

7.6% 3.3% 3.7% 8.9% 1.6% -4.1% 33.3 -44.8% 12.9%

Daniel Frumkin

20.2% 0.0% 3.0% -56.2% -87. 2% 91.9% n/a -100% -28.3%

Marc Page

n/a n/a n/a n/a n/a n/a n/a n/a n/a

Executive Committee

4.5% -3.1% 8.4% -26.2% -56.9% - 47.3% n/a -100% -45.5%

Robert Sharpe

0.0% 0.0% 0.0% -73.1% -64.1% 100.8% n/a n/a n/a

Catherine Brown 38.0% 1.0% 10.7% n/a n/a n/a n/a n/a n/a

Paul Coby

n/a n/a n/a n/a n/a n/a n/a n/a n/a

Dorita Gilinski

n/a n/a n/a n/a n/a n/a n/a n/a n/a

Jamie Gilinski Bacal

n/a n/a n/a n/a n/a n/a n/a n/a n/a

Cristina Alba Ochoa

n/a n/a n/a n/a n/a n/a n/a n/a n/a

Paul Thandi 13.3% 2.6% 6.4% n/a n/a n/a n/a n/a n/a

Michael Torpey 0.0% 0.7% 2.0% -13.3% -26.5% 100.0% n/a n/a n/a

Nicholas Winsor 0.0% 15.5% 35.0% n/a n/a n/a n/a n/a n/a

Notes:

1. The data for ‘all colleagues’ and ‘ExCo’ is based on the population employed as at the relevant December year end. Average is calculated on a mean basis.

2. The year-on-year change in Taxable benefits for Daniel Frumkin has been heavily influenced by the decision to include the apportioned costs of a chauffeur and company car that was historically operated by the Bank (see commentary on page 103). There has

been no year in year change in terms of Daniel’s eligibility to standard benefits.

3. Marc Page, Paul Coby and Cristina Alba Ochoa were appointed to the Board on 12 November 2024, 30 December 2024 and 10 June 2024 respectively, hence there is no year on year change in their remuneration in respect of 2024 vs 2023. Cristina Alba

Ochoa has waived her right to a fee.

4. The year-on-year change in taxable benefits for Robert Sharpe has been heavily influenced by the decision to include the apportioned costs of a chauffeur and company car that was historically operated by the Bank. As Chair of the Board, he is not eligible for

standard benefits offered to other colleagues.

5. Dorita Gilinski and Jamie Gilinski Bacal were appointed to the Board on 26 September 2022 and 2 September 2024 respectively, and both have decided against receiving a fee.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration for colleagues below Board level continued

CEO to colleague pay ratio disclosure

Year

Calculation

methodology

25th

percentile

pay ratio

Median

pay ratio

75th

percentile

pay ratio

CEO

salary

25th

percentile

salary

Median

salary

75th

percentile

salary

CEO total

pay

25th

percentile

total pay

Median

total pay

75th

percentile

total pay

2024 A 36:1 27:1 17:1 £925,000 £29,400 £37,800 £59,600 £1,154,200 £32,200 £42,900 £67,4 00

2023 A 30:1 21:1 13:1 £769,600 £25,400 £34,300 £58,200 £834,500 £27,60 0 £38,800 £66,100

2022 A 49:1 35:1 19:1 £762,200 £23,900 £32,600 £56,500 £1,276,200 £26,300 £36,900 £65,900

2021 A 55:1 40:1 22:1 £740,000 £23,000 £30,400 £55,000 £1,430,100 £25,800 £36,100 £64,700

2020 A 55:1 40:1 23:1 £714,800 £21,100 £27,4 00 £47,000 £1,297,000 £23,800 £32,200 £57,000

2019 A 36:1 27:1 16:1 £750,000 £20,700 £26,700 £43,400 £828,600 £22,900 £30,300 £51,200

Notes:

Salary and total pay figures have been rounded to the nearest £100.

We have not diverged from the single total figure methodology when calculating employee pay and benefits.

The respective quartiles were calculated using the Option A methodology which the Committee considers the most straightforward approach. Colleagues are included in the 2024 data set if employed as at

31 December 2024. Three colleagues were identified whose full-time equivalent total remuneration places them at the 25th, 50th and 75th percentiles. Colleague total remuneration includes salary, allowances,

employer pension contributions, Bank-funded health and risk benefits and incentives in respect of the relevant performance year. For 2024 provisional annual bonus awards, figures have been used as the year end

performance management process for colleagues remains ongoing as at the date of this report. We are confident that the colleagues identified at the lower, median and upper quartiles are remunerated in line with

our wider policies on colleague pay, reward and progression.

There has been an increase in the pay ratio between 2023 and 2024. The primary reason for this is twofold: the CEO’s higher salary in from the start of 2024, and there was no annual bonus awarded in 2023 for

Executive Directors. The Committee is satisfied that the individuals identified within each relevant percentile appropriately reflect the employee pay profiles at those quartiles and that the overall picture presented by

the ratios is consistent with our approach to colleague remuneration.

It is important to note that a high proportion of the CEO remuneration is based on performance against the short- and long-term incentive plans, and that payouts can significantly change year-on-year, significantly

affecting the ratio going forward.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration policy

The section below sets out the Remuneration Policy for Executive and Non-Executive Directors.

The current remuneration policy for Executive Directors, the Chairman and independent Non-Executive Directors was adopted following shareholder approval at the Annual General Meeting held on 21 May 2024.

This new Remuneration Policy (the Policy) will be submitted for shareholder approval at our Annual General Meeting in May 2025 to support delivery of the Strategic Plan and sustainable growth following the

stabilisation of the business in 2024. If approved, it will take effect from that date. Details of how the Policy (if adopted by shareholders) will be applied in 2025 are included in the next section of the Directors’

Remuneration Report.

It is intended that the Policy will apply for up to three years from the date of approval. The Committee will consider annually how the Policy is operated to ensure it remains aligned with the business strategy and

regulatory requirements.

In determining the new Policy, the Committee has undertaken a thorough review of remuneration arrangements across the business, the Bank’s strategic priorities, FTSE market practice and investor guidance. The

views of our shareholders on remuneration matters are also important to us and, as a result, we take into account feedback and guidance from our key shareholders and the shareholder representative bodies and

considered their guidelines in formulating proposals.

The Committee is satisfied that any conflicts of interest have been mitigated in the preparation of this Policy.

Summary of Policy changes

This section sets out the key changes in the new Remuneration Policy from that set out in the 2023 Annual Report and Accounts.

Component Overview of changes

Annual Bonus

To provide greater flexibility to reward exceptional performance, the maximum opportunity has been increased to 150% from 100%.

The new structure aligns the operation with FTSE banking market practice with the majority or all of the bonus being based on the Balanced Scorecard and the remainder

being based on individual strategic and cultural metrics.

Consistent with remuneration rules from the Bank’s regulators, all or part of any bonus can be paid in cash (upfront and or deferred).

New Long-Term Incentive Plan

A new long term incentive plan, the Shareholder Value Alignment Plan (SVAP) is being established. The SVAP will deliver value to participants based on the sustainable

long-term value created for shareholders. The rationale for its inclusion is set out in the Statement from the Committee Chair.

Where an Executive Director participates in the SVAP, they will not be eligible to participate in any other long term incentive plan for the duration of this policy. For the

avoidance of doubt, existing awards granted under the current LTIP are unaffected by the introduction of the SVAP.

The current LTIP is being retained.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration policy continued

Executive Directors – Fixed remuneration

Component Description

Salary

Purpose and link to strategy

Salary is set pay at a level which enables us to attract and retain the right calibre of colleagues, with the required level of skills, experience and cultural alignment.

Operation

Salaries for Executive Directors are reviewed annually by the People and Remuneration Committee (the Committee) with any increase usually taking effect from 1 April.

When determining salary levels, the Committee considers factors including:

• relevant external market data and alignment to market-competitive levels

• scope and size of role

• individual’s skills, expertise and experience and ability to grow with the role and organisation

• salary increases across the Bank

• economic factors, e.g. inflation and affordability.

Maximum potential

Salary increases in percentage terms for Executive Directors will normally be in line with increases awarded to other colleagues, but there may be instances where a

higher amount is agreed at the discretion of the Committee, including, but not limited to, where there has been a clear increase in the scope of role or change in

responsibilities.

Performance measures

There are no performance measures related specifically to salary.

Pension

Purpose and link to strategy

The pension arrangements comprise part of a competitive remuneration package and facilitate long-term retirement savings for Executive Directors, and without

exposing the Bank to any unnecessary financial risk or unacceptable cost.

Operation

Paid as a cash allowance and/or contribution to a defined contribution plan. Pension contributions may also be made in lieu of any waived salary (and the cash amount of

any annual bonus).

Maximum potential

For current and any new Executive Directors, the pension allowance will be in line with employer contribution for the majority of the workforce.

Performance measures

There are no performance measures related specifically to pension contributions.

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Remuneration policy continued

Executive Directors – Fixed remuneration continued

Component Description

Benefits

Purpose and link to strategy

We support the health, wellbeing and security of our Executive Directors through additional core benefits.

Operation

A range of benefits may be provided, including standard benefits such as holiday and sick pay, and may also include the provision of a car and driver (or other car-related

service), private medical insurance, health screening, life insurance, and tax preparation and tax return assistance. Benefits can be provided in kind and/or in cash in lieu of

the benefit.

Other benefits may be offered if considered appropriate and reasonable by the Committee.

Executive Directors are reimbursed for expenses, such as travel and subsistence, and any associated tax incurred in the performance of their duties.

Additional benefits may be provided in certain circumstances including, but not limited to, relocation. Executive Directors also have access to additional voluntary benefits

which are available to all colleagues, including ShareBuy, our Share Incentive Plan (SIP).

Maximum potential

The maximum opportunity will vary according to the market, individual circumstances and other factors.

Benefits are set at an appropriate level by the Committee based on the role and individual circumstances.

The cost may fluctuate from year-to-year even if the level of benefit provided remains unchanged.

Performance measures

There are no performance measures related specifically to benefits.

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Remuneration policy continued

Executive Directors – Variable Remuneration

Component Description

Annual Bonus

Purpose and link to strategy

To recognise and reward the delivery of annual financial and strategic objectives which contribute towards the delivery of longer-term strategy.

Operation

Annual bonus is determined by an assessment of the Balanced Scorecard outcome and personal performance. The Balanced Scorecard will normally determine all or at

least 80% of the bonus outcome with the remainder based on achievement against individual performance objectives.

The Committee has discretion to adjust the annual bonus outcome if it is not aligned with underlying financial performance, the current and future risks and the wider

stakeholder experience.

Minimum and maximum performance levels for each measure are defined in the Balanced Scorecard.

Awards will, in conjunction with any Long Term Incentive Plan, be structured to meet the regulatory requirements on variable pay. Currently this requires 60% of variable

pay to be deferred for up to 7 years and 50% of variable pay to be in shares (with any shares subject to a post-vesting retention period of 12 months).

The Committee can, in specified circumstances, apply malus or clawback to all or part of annual bonus in line with the 2024 UK Corporate Governance Code.

Dividends or dividend equivalents will only be payable during the vesting period if permitted under relevant regulatory remuneration guidelines. Dividends or dividend

equivalents can be accrued from the vesting date. The share price used to calculate a deferred share award may be discounted in relation to the dividend yield if dividends

or dividend equivalents are not payable.

On the occurrence of corporate events and other reorganisation events, the Committee may apply discretion to adjust: the vesting of deferred annual bonus awards and/

or the number of shares underlying a deferred annual bonus award.

Maximum potential

Up to 150% of salary for a financial year.

Performance measures

The choice of measures is reviewed by the Committee each financial year, with threshold, target and stretch levels of performance set for each measure. For 2025, the

balanced scorecard will be based on at least 60% on financial performance with the remainder on other metrics which may include Risk and Regulatory, Customer and

People metrics. Additionally, the Committee has discretion each year to establish a gateway requirement of CET1 or a profit hurdle before any bonus is payable.

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Remuneration policy continued

Executive Directors – Variable Remuneration continued

Component Description

Shareholder Value Alignment Plan (SVAP)

Purpose and link to strategy

To incentivise and reward the creation of long term shareholder value.

Operation and Performance Measures

Executive Directors will be granted an award under the SVAP following the AGM in 2025. There will be no further awards under any other long term incentive plan for the

life of this Policy.

As a pre-condition, participation in the SVAP is subject to the Committee confirming satisfactory conduct of the participant in the financial year prior to grant and that the

Bank is expected to have sufficient capital and liquidity to operate the Plan.

The participants in the SVAP will share in the growth in the value of the Company. Awards will be in the form of a share instrument which provides the right to nil cost

options to the value of the Participant Allocation determined at each Test, with vesting in tranches over a seven year period from grant (i.e. over the period to April 2032) or

such shorter period as permitted by relevant regulatory remuneration guidelines. Vested awards may be paid as a cash equivalent instead of shares

The Participant Allocation is based on the individual’s share of the Participant Value Pool which will be calculated as 5% of the growth in value of the Company.

Participant Value Pool:

The SVAP incentivises growth over the five-year period to 31 December 2029 and there will be 3 testing dates when value can be realised in the Participant Value Pool. The

baseline Company value from which growth is measured will be the market value equivalent to a share price of 80p and growth will be calculated based on total

shareholder return, i.e. adjusted for dividends declared, and other capital events during the period.

• Test 1: based on the value created as at 31 Dec 27 (a 20 Dealing Day average to 31 December 27)

• Test 2: based on the period to 31 Dec 28 – based on any rolling 20 Dealing Day average during 2028 (if further incremental growth above Test 1)

• Test 3: based on the period to 31 Dec 29 – based on any rolling 20 Dealing Day average during 2029 (if further incremental growth above Test 1 or Test 2)

The Participant Value Pool is calculated based on 5% of the growth in value from 80p, as determined based on the Tests described above. The value is adjusted for

dividends declared, and other capital events during the period.

There is a minimum growth hurdle such that the market value at each Test must be at least 50% higher than the baseline value (currently equivalent to a share price of at

least £1.20) before participants are eligible to receive their allocation.

Participant Allocation:

The Participant Value Pool is split between participants based on each individual’s Participant Allocation. The Participant Allocation gives the individual a right to receive the

requisite value of nil-cost options., including taking into account expected dividend yield over the remaining vesting period.

The Committee has the discretion to adjust the value of awards in exceptional circumstances where the share price outturn does not reflect Company performance.

Vesting and release:

The nil-cost options will vest in tranches between three and seven years from the grant of the SVAP, with each tranche subject to a 1 year holding period, or such shorter

period as determined by the relevant regulatory remuneration guidelines at the Committee’s discretion. Prior to vesting the Committee will consider if (i) capital and

liquidity positions are above the regulatory minima;(ii) there have been no material risk issues, in the judgement of the Committee and (iii) if the Bank is profitable. Vesting

may be reduced, and/or delayed to the extent appropriate.

Dividends or dividend equivalents will only be payable during the vesting period if permitted under relevant regulatory remuneration guidelines. Dividends or dividend

equivalents may be accrued from the vesting date even if the SVAP award has not been exercised. The share price used to calculate a nil cost option may be discounted in

relation to the dividend yield if dividends or dividend equivalents are not payable.

Malus and clawback provisions will apply to these awards in line with the 2024 UK Corporate Governance Code.

On the occurrence of corporate events and other capital reorganisation events, the Committee may apply discretion to adjust the vesting of SVAP awards and/or the

number of shares underlying an SVAP award to neutralise the impact on the value to an individual.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration policy continued

Executive Directors – Variable Remuneration continued

Component Description

Shareholder Value Alignment Plan (SVAP)

Maximum potential

The maximum Participant Allocation for the CEO (or any other Executive Director) is 2.5% out of the 5% Participant Value Pool.

Caps on payout

There is a total cap on the Participant Value Pool of £120m and value of the Participant Allocation to any individual of £60m (as calculated at the time of the Tests). Payouts

at this capped level currently requires a share price of £4.37.

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Remuneration policy continued

Executive Directors – Variable Remuneration continued

Component Description

Long-Term Incentive Plan (LTIP)

Purpose and link to strategy

To incentivise and reward the creation of long-term shareholder value thereby creating shareholder alignment.

Operation

If an Executive Director participates in the SVAP, they would not be considered for LTIP awards on an annual basis.

Awards granted will be in the form of nil/nominal cost options or conditional awards of shares.

Awards will usually have performance assessed on the third anniversary of grant or, if later, when the Committee determines that the performance conditions have been

satisfied.

The vesting of the award will be in line with regulatory requirements In line with applicable regulations, which currently require the vesting to be in tranches over years

three to seven from grant, subject to a holding period per regulatory guidelines. The Committee has the discretion to adjust the level of vesting where it is not considered

to be in line with the underlying performance of the Company; the wider stakeholder experience; the Board’s risk appetite framework; in relation to any individual conduct

issues or in any other circumstances at the discretion of the Committee.

Dividends or dividend equivalents will only be payable during the vesting period if permitted under relevant regulatory remuneration guidelines. Dividends or dividend

equivalents can be accrued from the vesting date. The share price used to calculate an award may be discounted in relation to the expected dividend yield if dividends or

dividend equivalents are not payable.

Malus and clawback provisions will apply to these awards in line with the 2024 UK Corporate Governance Code and other applicable regulatory requirements.

On the occurrence of corporate events and other reorganisation events, the Committee may apply discretion to adjust the vesting of LTIP awards and/or the number of

shares underlying an LTIP award.

Maximum potential

Up to 100% of salary for a financial year, subject to an exceptional circumstances limit of 200% of salary.

Threshold vesting performance for the LTIP will be set at 25% of maximum opportunity.

Performance measures

Awards are subject to the achievement of performance targets linked to the long-term success of the Company.

Performance measures and weighting will be aligned to the Company’s strategy. The performance measures will be determined prior to grant and ordinarily the majority

of the award will be based on financial and/or relative Total Shareholder Return (TSR) metrics, with the remainder on other metrics which may include strategic, risk or

customer metrics.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration policy continued

Remuneration approach when appointing new Executive Directors

The Committee’s approach to recruitment is to attract diverse experience and expertise by paying competitive remuneration enabling us to attract and retain key talent from the marketplace.

Any new executive director’s remuneration package would include the same elements and be subject to the same variable remuneration maximums as those for the existing executive directors. The policy is

summarised below.

Element Details

Salary

Base salary will be determined by virtue of the individual’s role, experience and responsibility. External market commentary will also be considered.

Benefits and Pension

Dependent on circumstances but will be set in line with the policy for existing Executive Directors.

Where the new Executive Director is required to relocate, the Bank may provide relocation support. The level of the relocation package will be assessed on a case by case

basis but may include, for example, a housing allowance/support, school fees, periodic trips home, family travel, and the tax thereon, as well as reflecting cost of living

differences.

Variable remuneration

The maximum variable remuneration opportunity for the performance period in which the Executive Director joined would be determined by the Remuneration Policy and

the Committee would consider whether it is appropriate to reduce the award, subject to time in role.

Shareholding requirement

In line with the policy for existing Executive Directors.

Buyout

The Committee may consider buying out forfeited remuneration and forfeited opportunities and/or compensating for losses incurred as a result of joining Metro Bank

subject to proof of forfeiture or loss.

The value of any buy-out award will not exceed, in broad terms, the aggregate value of the remuneration forfeited.

Any award will be structured within the requirements of the applicable remuneration regulations, and will be no more generous overall than the remuneration forfeited in

terms of the existence of performance measures, timing of vesting and form of delivery.

The value of buy-out awards is not included within the maximum variable remuneration level where it relates to forfeited remuneration from a previous role or employer.

Legacy matters

Where a senior executive is promoted to the Board, their existing contractual commitments agreed prior to their appointment may still be honoured in accordance with the

terms of the relevant commitment, including vesting of any pre-existing deferred or long-term incentive awards.

Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration policy continued

Other policy matters – Executive Directors

Component Description

Shareholding requirement

Purpose and link to strategy

A requirement for Executive Directors to hold a specified value of shares for alignment with the interests of shareholders during employment.

Operation

Executive Directors are subject to a minimum shareholding requirement of 200% of salary, normally expected to be built up over a period of five years commencing from

the date of appointment as an Executive Director (or, if later from the date of any changes to the terms of the shareholding requirements).

Executive Directors are expected to retain all shares vesting under the deferred bonus (or equivalent), SVAP and the LTIP (in all cases net of tax and payment of any nominal

exercise price) until such time as this shareholding requirement has been met. Shares that count towards the requirement are beneficially owned shares, vested share

awards subject to a retention period and unexercised share awards for which performance conditions have been satisfied (on a net-of-tax basis).

Executive Directors are expected to maintain the shareholding requirement (or their actual shareholding at the date of leaving, if lower) for at least two years

post-employment.

Contractual arrangements

Purpose and link to strategy

Service agreements contain a maximum of 12 months’ notice from the employer and the Executive Director.

Operation

May be required to work and/or serve a period of garden leave during the notice period and/or may be paid in lieu of notice if not required to remain in employment for the

whole notice period.

Legacy arrangements

Purpose and link to strategy

Honour existing commitment.

Operation

Any previous commitments or arrangements entered into with current or former Executive Directors will be honoured, including remuneration arrangements entered into

under the previously approved directors’ remuneration policy.

The Committee reserves the right to make any remuneration payment and/or payments for loss of office notwithstanding that they are not in line with the Policy set out in

this report, where the terms of the payment were determined before the Policy or any previous policy came into effect, or if the individual was not a Director at the date

the remuneration was determined and the remuneration was not set in consideration or in anticipation of becoming a Director.

External roles

Purpose and link to strategy

To encourage self-development and allow for the introduction of external insight and practice.

Operation

Executive Directors are permitted to accept one appointment on a Board or Committee of a listed company, subject to approval of the Board. When reviewing the

appropriateness of an external appointment, the Board will consider:

• any regulatory guidance that may be in place at the time

• whether the appointment would interfere or conflict with the business of the Company.

Any fees received in respect of these appointments can be retained directly by the relevant Executive Director.

Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration policy continued

Remuneration on or after termination

Component Description

Salary/fees and benefits

The Executive Director is entitled to be given notice of termination of the relevant length and receive their normal base salary and benefits in that time. Metro Bank has

discretion to make a payment in lieu of base salary in respect of any unexpired notice period and may decide to pay this in instalments, subject to reduction if the Executive

Director finds alternative employment.

Benefits continue until the last day of contractual employment and the accrued but unused holiday will be paid out.

The Committee may pay reasonable reimbursement of professional fees, such as legal fees and tax advice (and any associated tax), in connection with such termination

arrangements. Career transition (or outplacement) support may also be provided.

Annual Bonus

Annual bonus may accrue during a notice period, however (unless decided otherwise by the Committee at its discretion) the Executive Director usually has to be employed

at the normal annual bonus payment date in order to be eligible to receive it. No annual bonus is payable after termination and previous unvested deferred bonus awards

will usually lapse.

If the Executive Director leaves for compassionate reasons (e.g. ill health, retirement with the agreement of the employer, sale of the employing company out of the group,

redundancy or death) or in other circumstances at the Committee’s discretion, a pro rata annual bonus may be payable for the period of the year that the Executive

Director is actively employed and would usually be payable at the normal time provided any performance conditions are met.

SVAP

If an Executive Director ceases employment prior to vesting, the default position is that the unvested awards would lapse and no further participant allocation will be

provided under subsequent test dates.

However, if the Executive Director leaves for specific reasons detailed in the SVAP Plan Rules (e.g. ill health, retirement with the agreement of the employer, sale of the

employing company out of the group, redundancy or death) or in other circumstances at the discretion of the Committee, their award under will usually continue on the

same terms and will usually vest at the normal time provided any conditions are met, with a time pro rata reduction of awards. Unless the Committee determines

otherwise, there will be no further participant allocation under subsequent tests after cessation. The pro-rata reduction will ordinarily be based on period employed as a

proportion of the period between grant and the Test 1 date of 31 December 2027, unless the Committee determines otherwise.

The Committee may, at its discretion, determine that awards may vest, subject to performance, before the normal vesting date, for example in the case of death.

LTIP

If an Executive Director ceases employment prior to vesting, the default position is that the unvested LTIP awards would lapse. Vested but unexercised awards would be

unaffected.

If an Executive Director leaves for compassionate reasons (e.g. ill health, retirement with the agreement of the employer, redundancy or death) or in the event of sale of the

employing company out of the group, or in other circumstances at the Committee’s discretion, LTIP awards may continue, subject to the achievement of performance

conditions, and vest at the normal time (or on cessation of employment in exceptional circumstances). The award will normally be scaled back pro rata to the proportion of

the performance period employed, unless the Committee decides otherwise in exceptional circumstances.

Pension

Pension contributions continue to be made during the notice period. No further payment in lieu of pension or pension contributions can be made after termination.

Post shareholding requirement

Executive Directors will be required to maintain the lower of the in-employment shareholding requirement or the level achieved at the cessation date for a period of two

years post-cessation.

Other

Executive Directors’ contracts can be terminated by either party on giving no more than 12 months’ notice.

On termination, additional payments can be made by way of damages for breach of any legal obligation or by way of settlement or compromise of any claim raised by the

Executive Director.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration policy continued

Notes to the remuneration policy for Executive Directors

Committee’s judgement and discretion

In addition to assessing performance and making judgements on the appropriate levels of annual bonus, SVAP and LTIP awards, the Committee has certain operational discretions that it may exercise when

considering Executive Directors’ remuneration, including but not limited to:

i. determining whether a leaver is an eligible leaver under the Bank’s share plans and treatment of remuneration arrangements

ii. following a corporate event, the Committee may amend any performance conditions applicable to variable remuneration awards if any event occurs which causes the Committee to consider an amended

performance condition would be more appropriate and not materially less difficult to satisfy

iii. deciding whether to apply malus or clawback to an award.

In the event of a variation of the Bank’s share capital or a demerger, special dividend or any other event that may affect Metro Bank’s share price, the number of shares subject to an award and/or any exercise price

applicable to the award, will also be adjusted.

The delivery of deferred variable remuneration shall be operated in accordance with the rules of the respective plans.

Ability for the Committee to amend the policy for emerging and future regulatory requirements

The Committee will follow any statutory requirements when operating the Policy and may make minor amendments to the Policy for regulatory, exchange control, or administrative purposes without obtaining

shareholder approval for that minor amendment.

The Committee retains the discretion to make reasonable and proportionate changes to the remuneration policy if the Committee considers this appropriate to respond to changing legal or regulatory requirements

or guidelines (including but not limited to any FCA or PRA revisions to its remuneration rules). Where proposed changes are considered by the Committee to be material, the Bank will engage with its major

shareholders and any changes would be formally incorporated into the policy when it is next put to shareholders for approval.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration policy continued

Illustration of Application of Remuneration Policy

The charts below illustrate the potential total remuneration for each current Executive Director under the new Policy for the 2025 performance year. Four scenarios are considered:

Fixed pay Annual Bonus SVAP

Minimum:

• base salary (as at 1 April 2025)

• pension contribution of 8% of salary

• benefits (based on 2024 value).

0% payout 0% payout

On-target:

75% payout – assuming on-target

performance

Value of SVAP, assuming 1x growth in market value,

annualised over the 5 year performance period

Maximum:

150% payout – assuming full payout Value of SVAP, assuming 2x growth in market value,

annualised over the 5 year performance period

Maximum with 50% share price growth

As for Maximum Maximum payout, illustrating a further 50% share price growth

Minimum (fixed pay only), on-target and maximum potential relates to annual variable remuneration that may be awarded:

Scenario Charts: CEO

£2,000,000

£4,000,000

£6,000,000

£8,000,000

£10,000,000

Fixed Pay

Annual Bonus SVAP Additional 50% share price growth on SVAP

Below Target

£1,021k

100%

Target

£4,421k

23%

16%

61%

Maximum

£7,820k

13%

69%

18%

Maximum

(with additional 50% share

price growth on SVAP)

£9,166k

11%

59%

15%

Scenario Charts: CFO

£1,000,000

£500,000

£1,500,000

£2,000,000

£2,500,000

£3,000,000

Below Target

£552k

100%

Target

£1,473k

37%

26%

37%

Maximum

£2,393k

23%

45%

32%

Maximum

(with additional 50% share

price growth on SVAP)

£2,663k

21%

40%

10%

29%

Fixed Pay

Annual Bonus SVAP Additional 50% share price growth on SVAP

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Remuneration policy continued

Chair and independent Non-Executive Directors’ remuneration policy

Element Details

Purpose and strategy link

Attract a Chair and Non-Executive Directors who, together with the Board as a whole, have a broad range of skills and experience to determine the Bank’s strategy and

oversee its implementation.

Fees

The Board sets NED fees and the Committee sets the Chair’s fees. The Chair and NEDs do not participate in any discussion on their fees. Maximum aggregate annual fees

that can be paid to the Chair and Non-Executive Directors are capped at £3,000,000.

Benefits

Non-Executive Directors do not participate in any pension, bonus or long term incentive arrangements or receive any other benefits.

Travel and expenses incurred in the normal course of business, e.g. in relation to attendance at Board and Committee meetings, are met by the Bank. All Non-Executive

Directors are reimbursed for reasonable expenses and any tax arising on those expenses will typically be settled by the Bank. In exceptional circumstances, the Chair and

other NEDs may be accompanied by their spouse or partner to meetings or events, by prior approval. Such costs (and any associated tax) are paid by the Bank, including

access to and the provision of a car and driver (or other car-related service).

Fees on recruitment

Will be set in line with the Policy for the Chair and existing Non-Executive Directors.

Contractual

Appointment letters for the Non-Executive Directors provide for a notice period of three months, during which time they are entitled to be paid their normal fees or

payment in lieu without liability for compensation. There is no provision for any other early termination compensation and no payment for loss of office.

Other

When appointing any new Non-Executive Directors to the Board, the Nomination Committee will consider regulatory guidance relating to outside appointments and

whether the candidate can devote sufficient time to their Board roles.

Statement of consideration of shareholder views

The Committee welcomes shareholders’ views on executive remuneration and seeks to maintain an active and open dialogue with investors regarding any changes to the Bank’s executive remuneration arrangements. The

Directors have regular open discussions with investors and are available for feedback on reward matters.

The Committee takes very seriously the view of shareholders when making any changes to executive remuneration and will continue to acknowledge any feedback in reviewing our policy in future.

Consideration of employment conditions elsewhere in Metro Bank

We offer a simple approach to reward for all colleagues which supports our unique culture and strategy as well as being aligned to shareholder needs. Our remuneration approach is consistent for all colleagues including our

Executive Directors. The focus is on simplicity, rewarding the right behaviours and outcomes for customers and the business, focusing on long-term growth and discouraging unnecessary risk-taking.

During the year, the Committee received updates on overall pay and conditions for colleagues across the Bank and this was taken into account when setting pay for Directors and reviewing the Directors’ Remuneration Policy. In

particular, the base salary for Executive Directors is limited by reference to colleague pay, and ahead of our annual reward review process, the Committee review the quantum to be made available for salary increases, annual

bonus awards and other incentives. Colleagues can express their views on pay through regular surveys and feedback, as well as through our DNED.

Workforce engagement

The Bank runs annual employee engagement surveys, as well as more regular ‘pulse’ surveys which provides colleagues with the opportunity to give feedback and express their views on a variety of topics including their own

remuneration, working environment and workforce policies and practices. Any comments relating to Executive Directors’ remuneration are fed back to the Committee and/or the Board. Nick Winsor, as the DNED, attends the

Committee periodically, presenting to the Committee on his engagement with the Bank’s Colleagues once.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Annual report on remuneration

This section sets out how the existing remuneration policy for our Executive and Non-Executive Directors was implemented during the financial year ending 31 December 2024.

Single total figure of remuneration – Executive Directors (audited)

Annual remuneration (£)

The following sets out the remuneration for the individuals who served as Executive Directors in the year. Daniel Frumkin was the highest paid director in 2024.

Daniel Frumkin Marc Page

Cristina Alba Ochoa James Hopkinson

2024 2023 2024 2023 2024 2023 2024 2023

Salary £925,000 £769,000 £166,667 n/a £295,652 n/a £16,717 £500,000

Taxable benefits

£1,250 £2,434 £0 n/a £66,522 n/a £27 £995

Pension benefits

£74,000 £61,568 £13,333 n/a £29,855 n/a £1,337 £40,000

Other

£905 £905 £335 n/a £794 n/a £30 £905

Total fixed remuneration £1,001,156 £834,507 £180,335 n/a £392,823 n/a £18,112 £541,900

Annual bonus £153,003 £0 £23,014 n/a n/a n/a n/a £0

Long-term incentive

£0 n/a n/a n/a n/a n/a n/a n/a

Buyout/loss of opportunity award

n/a n/a £338,000 n/a n/a n/a n/a n/a

Total variable remuneration £153,003 £0 £361,014 n/a n/a n/a n/a £0

Total remuneration

£1,154,159 £834,507 £541,349 n/a £392,823 n/a £18,112 £541,900

1. James Hopkinson stepped down from the Board on 12 January 2024 and left the Bank on 16 February 2024. The figures above include his salary and contractual benefits up to 12 January 2024 and exclude remuneration for the short period after he stepped

down from the Board but remained employed with the Bank.

2. Fixed remuneration shown above for Marc Page does not exclude fixed remuneration paid from 2 September (date he joined the Bank) until 12 November 2024 (day before appointment to the Board). Remuneration shown above for Cristina Alba Ochoa relates

to her time as an Executive Director between 10 June and 14 October 2024.

3. Taxable benefits include the cost of private medical cover (which for Daniel Frumkin was £845 in 2024 and £995 in 2023 respectively). Since January 2023, the Chief Executive occasionally uses an executive car service for travelling and family members may

travel to attend Board or other events. If a tax liability arises on these including for any incidental personal use, the Bank may pay for this. The 2024 and 2023 benefits figures for Daniel Frumkin includes car service costs of £406 and £1,439 respectively. A

forecast UK tax gross up of £331 (on the 2024 car service costs) will paid by the Bank following the end of the 2024-25 tax year: this latter amount (the forecast tax gross up) is not included in the table above under the 2024 benefits column.

4. Pension benefits is the amount of cash in lieu of participating in a pension plan.

5. Other includes life assurance cover premium.

6. Daniel Frumkin has unvested 2021 and 2022 LTIP award. The Committee reviewed performance at the end of the respective performance periods and determined that, under each respective measure, minimum performance had not been achieved. This

means the awards will lapse in full. Therefore, no value is included in the single figure of total remuneration in 2024. The Committee confirmed that a 0% vesting level was consistent with the business performance achieved over the respective four and three

year performance periods

7. As part of his hiring agreement (and as outlined in the 2023 Annual Report and Financial Statement), Marc Page was eligible to receive a buyout of £128,000 to compensate for deferred variable remuneration forfeited when Marc Page decided to leave his

previous employer and join Metro Bank. The buyout has been delivered in a combination of deferred shares and cash. On 18 December 2024, Marc was granted awards over 106,485 shares under the Deferred Variable Reward Plan 2024 The total value of

shares at grant was £94,080. In addition, Marc received a £33,920 as a deferred cash award (“Deferred Cash Award”), which vests in four equal annual instalments i.e. over four years from the date of grant. In addition Marc received a lost opportunity award of

£210,000 which was delivered in a combination of cash, retained shares and deferred shares Marc was granted awards over 166,383 shares with a value of £147,000 and in addition received a cash award of £63,000 (see page 109 for more details).

Details of the single figure salary (audited)

Salary as at

1 January 2024

Salary as at

1 April 2024

Total salary paid in

2024

Daniel Frumkin £925,000 £925,000 £925,000

Marc Page n/a n/a £166,667

James Hopkinson £500,000 n/a £16,717

Cristina Alba Ochoa n/a n/a £295,652

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Annual report on remuneration continued

2024 variable remuneration outcomes (audited)

How annual bonus is determined

Annual bonus outcomes across all colleagues is determined as follows:

Step 1: Calculate aggregate percentage bonus outcome. This is comprised as corporate Balanced Scorecard outcome (80% weighting) and performance against personal strategic priorities (20% weighting).

Step 2: Annual bonus outcome is on target annual bonus opportunity multiplied by the aggregate percentage bonus outcome.

Understanding the annual bonus corporate Balanced Scorecard and calculation of the Company performance adjustment

80% of the annual bonus in relation to performance during 2024 was based on a Balanced Scorecard of performance measures and objectives, weighted between financial (60%), risk and regulatory (20%), customer

(10%) and people and communities (10%).

The table below illustrates performance against each of the Balanced Scorecard measures. The same Scorecard is used for all colleagues across the Bank.

Performance measure Weighting Target/Objective

Actual

performance

outcome

Adjustment

factor

Weighted

performance

outcome

Total financial measures 60.0% – 59.5%

Underlying (loss)/profit 45.0% (£38m) (£21m) 120% 54.0%

Net interest margin 5.0% 1.78% 1.82% 110% 5.5%

Cost 10.0% £497m £511m 0.0% 0.0%

Total non-financial 40.0% – – – 18.5%

Risk and regulatory

20.0% Includes Relationship with regulators and breaches of risk appetite metrics 11.0%

Customer

10.0% Includes net promoter scores and EOD’s 7.5%

People 10.0% Includes colleague engagement and diversity in Leadership 0.0%

Overall Balanced Scorecard (prior to Committee discretion) 100.0% – – 78.0%

Notes:

1. Captures risk factors not measured elsewhere in the Balanced Scorecard, to reflect the need to deliver business performance within the Board approved risk appetite constraints.

2. Measures customer expression of dissatisfaction per 1000 accounts.

3. Underlying (loss)/profit before tax has been adjusted for management actions, primarily to exclude the £2.5 billion mortgage portfolio sale and the subsequent repayment of TSFME that occurred in the second half of 2024 from the actual performance

outcome.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Annual report on remuneration continued

2024 variable remuneration outcomes (audited) continued

Commentary on the corporate balanced scorecard

The Balanced Scorecard outcome largely reflects the positive shift in business performance following the shift towards corporate, commercial and SME lending, and specialist mortgages which resulted in above

target performance in both the profit and net interest margin measures. Over the past year, the business has fundamentally transformed the cost base, reducing operating costs and driving towards sustained

profitability. There will be a continued disciplined approach to costs as the business delivers on the long-term plan.

On the non-financial measures and notably the people related targets, the business has been impacted on the performance measures as a result of the reduction in the onshore headcount from 4,458 to 2,972, which

had a significant impact on colleague sentiment. We continue to focus on engaging our colleagues and as a leaner organisation, and as part of our continuous improvement, we will keep creating an environment

where colleagues can grow, thrive and be their true authentic selves. The Bank continued to focus on the risk and regulatory measures and continued to minimise breaches of its risk appetite measures. For customer

related measures whilst the Group maintained strong performance for EODs, with an outturn exceeding target, NPS for ongoing relationships will be a continued areas of focus.

Assessment of individual performance and behaviours and the calculation of the personal performance adjustment factor

A discretionary adjustment factor was applied to annual bonuses for all eligible colleagues, by reference to each colleague’s individual behaviours and performance for the year. Set out below are details of the

individual adjustment factor in respect of the Executive Directors as determined by the Committee.

Key objectives in 2024 Key achievements in 2024

Personal

performance (Max

20% weighting)

Daniel Frumkin

– Financial

– Customer

– People and Communities

– Risk and regulatory

2024 has been an exceptional year for Daniel which has seen the Bank deliver on the ambitious transformation plan that was put in place following the

recapitalisation. Through Daniel’s leadership the business strategy has pivoted at pace to shift towards corporate, commercial and SME lending, and

specialist mortgages. In addition, the Bank has seen the development of a new collaboration with Infosys to improve automation and enhance the

businesses digital capability.

Through Daniel’s strong leadership the Bank delivered positive growth momentum aligned to the strategy, which included a 71% year-on-year increase in

SME gross lending, achievement of an £80 million annualised run rate cost saving and exceeding guidance on underlying profit during the fourth quarter of

2024. Daniel made some difficult but necessary decisions in 2024 to deliver on the strategic plan with a 30% reduction to on-shore headcount numbers

whilst also ensuring the business remained focused on delivery expectations through the year.

Daniel has continued to engage positively with the Regulator to ensure they are kept abreast of the business growth plans and strategic direction and risk

performance against the risk appetite metrics remain strong.

20/20

Marc Page

– Financial

– Customer

– People and Communities

– Risk and regulatory

Since joining the Bank in September, Marc has transitioned well, which can be challenging moving from a big bank to a smaller institution. He has already

delivered excellent work on both the 2025 budgeting process and the revised business long term plan.

12.5/20

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Annual report on remuneration continued

Finalising the 2024 variable remuneration levels for Executive Directors

Annual bonuses

In recognition of the corporate balanced scorecard outcome, the Committee determined that the following bonus would be payable in respect of 2024 performance.

Executive Director

Salary for

annual bonus

Corporate

scorecard

outcome

Personal

performance

Aggregate

outcome

Outcome after

any discretionary

adjustment

Target opportunity

(as % of salary) Annual bonus

Daniel Frumkin £925,000 78.0% 20.0% 98.0% 33.0% 50.0% £153,000

Marc Page

£166,667 78.0% 12.5% 90.5% 27.8% 50.0% £23,000

Notes:

1. The bonus calculation for Marc Page reflects his period of employment with the Bank in 2024 rather than just the period from his appointment to the Board on 12 November 2024. The salary shown above presents the pro rata amount for 2024.

2. Annual bonus amounts are rounded to the nearest £500.

Share Value Alignment Plan

Subject to shareholder approval at the May 2025 AGM, a grant under the new SVAP will be made to the CEO and CFO of 2.5% and 0.5% of the overall 5% participant value pool. The Participant Allocation is based on

the individual’s share of the Participant Value Pool which will be calculated as 5% of the growth in value of the Company.

Awards will be in the form of a share instrument which provides the right to nil cost options to the value of the Participant Allocation determined at each Test, with vesting in tranches over a seven-year period from

grant (i.e. over the period to April 2032) or such shorter period as permitted by relevant regulatory remuneration guidelines. Vested awards may be paid as a cash equivalent instead of shares.

The plan incentivises growth over the five-year period to 31 December 2029 and there will be 3 testing dates when value can be realised in the Participant Value Pool. The baseline Company value from which growth

is measured will be the market value equivalent to a share price of 80p and growth will be calculated based on total shareholder return, i.e. adjusted for dividends declared, and other capital events during the period.

• Test 1: based on the value created as at 31 Dec 27 (a 20 Dealing Day average to 31 December 27)

• Test 2: based on the period to 31 Dec 28 – based on any rolling 20 Dealing Day average during 2028 (if further incremental growth above Test 1)

• Test 3: based on the period to 31 Dec 29 – based on any rolling 20 Dealing Day average during 2029 (if further incremental growth above Test 1 or Test 2).

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Annual report on remuneration continued

Directors’ Remuneration Report

Relative importance of spend on pay

The table below shows total remuneration of all colleagues for 2024 compared to 2023.

2024

£’million

2023

£’million % change

Employee costs 174.0 201.7 (13.73%)

The costs above are wages and salaries, and exclude social security, pension costs, equity-settled

share-based payments and costs capitalised or offset against the Credits and Investments grant. The

year-on-year change reflects the reduction in headcount through the transformation activity.

We did not make any distributions by way of dividend or share buy-back during the year, or any other

significant distributions. We therefore consider that at this time there is no information or data which

would assist shareholders in understanding the relative importance of spend on pay.

Total shareholder return

The chart below shows our total shareholder return relative to the FTSE 250 and the FTSE 350 banks

(which is the capitalisation-weighted index of all bank stocks in the FTSE 100 and FTSE 250) since our

listing on the London Stock Exchange in March 2016. These indices have been chosen as they represent

a cross-section of UK companies and banks.

Mar 2016 Dec 2017

Dec 2018

Dec 2019 Dec 2020 Dec 2022 Dec 2023 Dec 2024Dec 2021

100

150

200

250

Dec 2016

Total shareholder return (%)

Metro Bank FTSE 250 FTSE Banks

CEO historic remuneration

Chief Executive Officer Financial year

Single figure of

total remuneration

Annual bonus

as a % of maximum

LTIP vesting

as a % of maximum

Daniel Frumkin 2024 £1,154,159 16.5% n/a

2023 £834,507 0.0% n/a

2022 £1,276,161 59.0% n/a

2021 £1,430,076 85.0% n/a

2020 £1,297,176 35.7% n/a

Craig Donaldson 2019 £828,565 0.0% n/a

2018 £800,944 0.0% n/a

2017 £1,518,893 62.0% n/a

2016 £1,304,919 52.0% n/a

Payments to past Directors and payments for loss of office (audited)

As disclosed in last year’s remuneration report, James Hopkinson stepped down from the Board on 12

January 2024 and left the Bank on 16 February 2024. Details of the remuneration arrangements relating

to James’ termination were also published on our website. The Committee determined that the

termination arrangements were fair and reasonable, consistent with the Directors’ Remuneration Policy

and in line with James’ contractual entitlements.

Between 13 January 2024 and 16 February 2024, he received salary of £48,759, pension of £3,901 and

benefits of £166.50. Following cessation of his employment and in line with the Bank’s approved Directors’

Remuneration Policy, James will receive £500,000 (in monthly instalments) in lieu of his 12-month notice

period. The total PILON paid in 2024 was £434,524 and the final PILON instalments were made in January

and February 2025, totalling £41,666.67 and £23,809.52 respectively.

Further details of the treatment of termination arrangements including his share awards and post-

employment shareholding requirement were set out in the 2023 Annual Report and Financial Statements.

Executive Director terms of employment and entitlement to fees from

external positions (unaudited)

The Executive Directors are employed under service contracts with an indefinite term.

Executive Director Notice period Date of service contract Date of appointment

Daniel Frumkin 12 months 18 February 2020 1 January 2020

Marc Page 12 months 2 September 2024 12 November 2024

Executive Directors are entitled to receive fees from external appointments. Daniel Frumkin and Marc

Page did not hold any external appointments at other listed companies for the last reported financial year

during the period they were appointed to the Board.

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Dilution limits

The respective rules of the Metro Bank Holdings DVRP, SVAP and LTIP contain limits on the dilution of

capital. These limits are monitored to ensure that we do not exceed 5% or 10% (where applicable) of the

issued share capital in any rolling 10-year period. For awards granted since the AGM in 2021, discretionary

awards under the DVRP and the LTIP must also not exceed 5% of the issued share capital in any rolling

10-year period, in line with institutional investor guidance.

Shareholding levels (audited)

Directors’ shareholding

These are the total shareholdings as at 31 December 2024 for each Director and any related connected

persons.

Director No. of shares

1,2,4

Percentage of

share capital

Robert Sharpe 75,000 0.01%

Daniel Frumkin 8,183,333 1.22%

Marc Page

– 0.00%

James Hopkinson

368,498 0.05%

Catherine Brown 100 0.00%

Paul Coby

– 0.00%

Dorita Gilinski – 0.00%

Jaime Gilinski Bacal

355,723,914 52.86%

Cristina Alba Ochoa 218,723 0.03%

Paul Thandi 30,000 0.00%

Michael Torpey 20,000 0.00%

Nicholas Winsor 250,000 0.04%

Notes:

1. This table includes vested shares where the Director has beneficial ownership, shares independently acquired in the market

and those held by a spouse or civil partner or dependent child under the age of 18 years.

2. Marc Page acquired an aggregate number of 650,000 shares on the 3 March 2025, of which 587,218 were for Marc Page

and a total of 62,782 for dependant children under the age of 18 years.

3. For Directors who have stepped down from the Board during the year, the number of shares owned is shown as at the date

they stepped down.

4. Paul Coby acquired 22,480 shares on the 10 March 2025.

5. Jaime Gilinski Bacal’s interest includes his holding through his Spaldy Investments Limited vehicle.

6. Unless otherwise stated, there has been no change in the Directors’ shareholding interests between the end of the financial

year and 20 March 2025.

Shareholding guidelines

Executive Directors are required to build up a holding of shares equivalent to at least 200% of their annual

salary. Executive Directors normally have five years from their appointment to build-up their shareholding

requirement.

Executive Directors are required to retain 100% of their shareholding requirement (or actual shareholding,

if lower) for two years post-cessation of employment.

Salary (as at 31

December 2024)

Requirement

as a % of

salary

Wholly

owned shares Value

Shareholding

requirement

met?

Daniel Frumkin £925,000 200% 8,183,333 £4,277,919 Yes

Marc Page

£500,000 200% – n/a No

Notes:

1. Value of beneficial shareholding based on average share price during 2024 of 0.523 pence. The value includes vested shares

which remain subject to a retention period.

2. Marc Page joined the Bank as Chief Financial Officer on 2 September 2024 and was appointed to the Board on 12 November

2024.

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Outstanding Share Awards (audited)

The tables below show for each Executive Director any outstanding share awards as at 31 December 2024 (or if earlier the date they stepped down from the Board).

Daniel Frumkin

Share Plan Name

under award

Award

date

Exercise

price

Face Value

of award

First

vesting date

Last

vesting date

vested

lapsed

Shares still

subject to

conditions

Exercised

in year

DVRP 2023 – deferred shares 86,814 31/03/2023 £0.00 £90,200 31/03/2026 31/03/2030 – – 86,814

DVRP 2023 – retained shares 3 47,256 31/03/2023 £0.00 £360,800 31/03/2023 31/03/2023 3 47,256 – –

DVRP 2022 – deferred shares 91,153 31/03/2022 £0.00 £81,400 31/03/2025 31/03/2029 – – 91,153 –

DVRP 2022 – retained shares 613,214 31/03/2022 £0.00 £547,600 31/03/2022 31/03/2022 613,214 – – –

DVRP 2021 – deferred shares 47 7,821 01/06/2021 £0.00 £523,214 01/06/2024 01/06/2028 95,564 – 382,257 –

LTIP 2023 740,712 31/03/2023 £0.00 £769,600 31/03/2026 31/03/2030 740,712 –

LTIP 2022 828,667 31/03/2022 £0.00 £740,000 31/03/2025 31/03/2029 – 828,667 –

LTIP 2021 675,799 01/06/2021 £0.00 £740,000 01/06/2025 01/06/2028 – – 675,799 –

CSOP 2020 – Hiring Agreement 100,000 31/03/2020 £0.93 £93,000 30/04/2023 30/04/2027 39,999 – 60,001 –

Total 3,961,436 1,096,033 – 2,865,403 –

Marc Page

Share Plan Name

under award

Award

date

Exercise

price

Face Value

of award

First

vesting date

Last

vesting date

vested

lapsed

Shares still

subject to

conditions

Exercised

in year

DVRP – Hiring Agreement (loss of

opportunity retained shares) 71,307 18/12/24 £0.00 £63,000 18/12/24 18/12/24 71,307 – – –

DVRP – Hiring Agreement (buyout) 106,485 18/12/24 £0.00 £94,080 18/12/25 18/12/28 – – 106,485 –

DVRP – Hiring Agreement (loss of

opportunity deferred shares) 95,076 18/12/24 £0.00 £84,000 18/12/25 18/12/29 – – 95,076 –

Total 272,868 71,307 – 201,561 –

James Hopkinson

Share Plan Name

Shares and share

options granted

Award

date

Exercise

price

Face Value

of award

First

vesting date

Last

vesting date

options vested

options lapsed

Shares still

subject to

conditions

Exercised

in year

DVRP 2023 – deferred shares 10,490 31/03/2023 £0.00 £10,900 31/03/2026 31/03/2030 – – 10,490 –

DVRP 2023 – retained shares 41,963 31/03/2023 £0.00 £43,600 31/03/2023 31/03/2023 41,963 – – –

LTIP 2023 481,231 31/03/2023 £0.00 £500,000 31/03/2026 31/03/2030 – 481,231 –

Total 533,684 41,963 481,231 10,490 –

Notes

1. All awards granted prior to May 2023 were initially granted over shares in Metro Bank PLC. On the establishment of the holding company, these shares were rolled over into the same number of shares in the new parent company, Metro Bank Holdings PLC.

2. 100% of salary was awarded under the 2021 LTIP, 2022 LTIP and 2023 LTIP respectively as nominal cost options that are subject to performance conditions (see table below).

3. The number of shares under award/option was determined using the relevant closing price prior to the grant date. For 2021, 2022, 2023 awards the prices were 109.5p, 89.3p, 103.90p respectively.

4. Options under the Company Share Option Plan (CSOP) have an exercise price that is equal to market value at the date of grant.

5. No dividends or dividend equivalents are payable on any share options or on any unvested share awards held.

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Outstanding Share Awards (audited) continued

LTIP performance conditions and targets

Performance conditions and targets together with corresponding weightings for LTIP awards. Unless otherwise stated, performance is measured over the relevant three-year performance period. The threshold for

LTIP vesting is set at 25% of the award with maximum vesting at 100% of the award and straight-line vesting between threshold and maximum.

2021 and 2022 LTIP outcomes

The 2021 LTIP is due to vest on 1 June 2025 and vesting is based on performance against a relative TSR measure, with a performance period from 1 January 2021 to 31 December 2024 and other financial/

non-financial performance, as set out below:

The 2022 LTIP is due to vest on 31 March 2025 and vesting is based on performance against a relative TSR measure, with a performance period from 1 January 2022 to 31 December 2024 and other financial/

non-financial performance, as set out below:

The Committee agreed based on the performance measures there would be 0% vesting for both the 2021 LTIP and 2022 LTIP

Target Performance vesting

Measure Weighting Threshold Maximum Achievement Percentage vesting

2021 LTIP (granted on 1 June 2021)

Total shareholder return relative to the FTSE 250 (excluding investment trusts) 40% Median against peers Upper quartile or above Lower quartile 0%

Statutory return on tangible equity for FY 2024 40% 4% 7% below 4% 0%

Risk and regulatory 20% See notes below 0%

Total 0%

2022 LTIP (granted on 31 March 2022)

Total shareholder return relative to the FTSE 250 (excluding investment trusts) 40% Median against peers Upper quartile or above Lower quartile 0%

Statutory return on tangible equity for FY 2024 40% 4% 7% below 4% 0%

Risk and regulatory 20% See notes below 0%

Total 0%

Notes

1. Under the risk and regulatory measure, the Committee determines the extent to which 20% of the award vests by reference to a discretionary assessment of risk management over the performance period based on qualitative and quantitative inputs against a

number of risk factors. For both the 2021 LTIP and 2022 LTIP the Committee concluded that the performance had failed to reach a minimum threshold across the respective measurement periods and decided that 0% vesting under this element was an

appropriate outcome.

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Outstanding Share Awards (audited) continued

Other outstanding LTIP awards

Measure Weighting Threshold Maximum

2023 LTIP (granted on 31 March 2023)

Total shareholder return relative to the FTSE 250 (excluding investment trusts) 40% Median against peers Upper quartile or above

Statutory return on tangible equity for FY 2025 40% 5% 8%

Risk and regulatory 20% See notes below

2024 LTIP

No awards granted to Executive Directors n/a n/a n/a

Notes

1. Under the risk and regulatory measure, the Committee shall determine the extent to which 20% of the award may vest by reference to a discretionary assessment of risk management over the performance period based on qualitative and quantitative inputs

against a number of risk factors.

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Approach to risk adjustment including application of malus and clawback

Individual remuneration is aligned with the Bank’s long-term interests and the time frame over which financial risks crystallise. For relevant colleagues including Executive Directors, a proportion of variable

remuneration is delivered in the form of awards that are deferred for a sufficient period during which risk adjustments can be applied. In addition, performance adjustment is made through the reduction in the value

of any deferred variable remuneration award through non-vesting due to performance considerations and share price movement over the deferral period.

The circumstances where malus and clawback may apply (as well as “in-year adjustment”) is summarised in the following table.

Criteria includes Application

Individual level

Deemed to have: (i) caused in full or in part a significant loss for or reputational damage to the Bank as

a result of reckless, negligent or wilful actions, or (ii) exhibited inappropriate behaviours or conduct,

or (iii) applied a lack of appropriate supervision and due diligence.

The individual failed to meet appropriate standards of fitness and propriety.

In-year adjustment, malus and clawback may be applied to all or part

of an award at the Committee’s discretion.

Business unit and/or

Group level

Material restatement of the Bank’s financials.

Material downturn in performance.

Significant failure in risk management.

Discovery of endemic problems in financial reporting.

Entering involuntary administration or insolvency process.

Financial losses, due to a material breach of regulatory guidelines.

The exercise of regulatory or government action to recapitalise the Bank following material loss.

In-year adjustment, malus and clawback may be applied to all or part

of an award at the Committee’s discretion.

Cash bonus and unvested share awards may be delayed or reduced before they are paid/before they vest (through malus) or may be subject to clawback on or after payment should the Committee conclude that an

adjustment needs to be made.

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Implementation of remuneration policy for Executive Directors in 2025 (unaudited)

Remuneration for the Executive Directors in 2025 will be in line with our new Directors’ Remuneration Policy as detailed on pages 90–102 of this report, subject to shareholder approval at the AGM in May.

The key elements of remuneration for 2025 include salary, pension, benefits, an annual bonus and an SVAP award. The charts on page 101 illustrate the potential outcomes under the proposed directors remuneration

policy being put to the shareholders for approval at the AGM in the May 2025 (i.e. based on 2025 performance and any salary with effect from 1 April 2025).

Daniel Frumkin’s and Marc Page’s salary for 2025 will increase in line with the standard workforce increase of 2% to £943,500 for Daniel Frumkin and £510,000 for Marc Page.

The proposed annual variable remuneration measures are set out in the subsequent sections.

2025 Annual Bonus corporate scorecard measures and weightings

The 2025 scorecard reflects our strategic priorities. The targets are set annually by the Committee, considering the Bank’s annual financial plan, strategy and its priorities for the next few years within the context of

the economic environment. The Committee considers financial and operational targets to be commercially sensitive and that it would be detrimental to the Bank’s interests to disclose them before the end of the

financial year.

Financial measures make up 60% of the scorecard. Social and Governance related measures are assessed by the Committee using a combination of quantitative and qualitative assessment. The Committee will, prior

to reviewing Scorecard performance, assess whether specific capital and liquidity gateways have been met and that the payment of annual variable awards is affordable.

Measure Weighting Measure type Target

Underlying profit 40% Financial Disclosed retrospectively

Return on tangible equity 5%

Underlying operating costs 10%

Net interest margin 5% Financial Disclosed retrospectively

Sub-total (financial) 60%

Risk and regulatory

– Relationship with regulators (qualitative)

– Breaches of red limits for tier 1 appetite metrics

20% ESG Disclosed retrospectively

Customer including

– Net promoter score

– Good customer outcomes

10% ESG Disclosed retrospectively

People including

– Colleague engagement

– Diversity in leadership positions

10% ESG Disclosed retrospectively

Total 100%

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Non-Executive Directors’ remuneration

Non-Executive fee levels (unaudited)

Non-Executive Directors are paid an annual fee and additional fees for being Chair or a member of Board Committees and, if appropriate, other additional time commitments. During 2024, the Chair of the Board did

not receive any additional fees for membership of Board Committees. The annual fees remained unchanged during 2024 and are set out below, together with the relevant annual fees effective from 1 January 2025.

Role

Annual fee

as at 1 January 2025

(£’000)

Annual fee as

at 1 January 2024

(£’000)

Chair of the Board 350 350

Fee arrangements for other Non-Executive Directors

Non-Executive Director – basic fee 65 65

Senior Independent Director 30 30

Designated NED for Colleague Engagement 17.5 17.5

Chair

2024

Member Chair

2025

Member

Audit Committee 20 5 20 5

Nomination Committee n/a 5 n/a 5

People and Remuneration Committee 15 5 15 5

Risk Committee 25 10 25 10

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Non-Executive Directors’ fees and taxable benefits (audited)

The table below shows the actual fees paid to the Chair and NEDs.

Fees Other Tot al

£ 2024 2023 2024 2023 2024 2023

Robert Sharpe

350,000 350,000 6,053 22,504 356,053 372,504

Catherine Brown 135,000 97,83 7 – – 135,000 97,837

Paul Coby 500 n/a – n/a 500 n/a

Dorita Gilinski

– – – – – –

Jaime Gilinski Bacal

– n/a – n/a – n/a

Cristina Alba Ochoa

– n/a – n/a – n/a

Paul Thandi 85,000 75,000 – – 85,000 75,000

Michael Torpey

95,000 95,000 3,194 3,683 98,194 98,683

Nicholas Winsor 97,500 97,500 – – 97,500 97,500

1. Since January 2023, the Chair was reimbursed expenses which included occasionally use of an executive car service for travelling to attend Board or other events. If a tax liability arises on these including for any incidental personal use which includes family

members, the Bank may pay for this. A forecast UK tax gross up of £4,952.68 will also paid by the Bank following the end of the 2024-25 tax year. This amount (the forecast tax gross up) is not included in the table above.

2. Dorita Gilinski, Jaime Gilinski Bacal and Cristina Alba Ochoa have waived their entitlement to fees.

3. Michael Torpey was reimbursed expenses in respect of his NED duties including travelling from overseas to attend Board and committee meetings, which are included in the benefits section above. Although these expenses are necessary and reasonable,

under HMRC rules these are deemed taxable in the UK. The Bank therefore paid the tax on the above expenses, which in 2024 and 2023 amounted to £2,312 and £2,286 respectively.

Non-Executive Directors’ fees and taxable benefits (audited)

Non-Executive Directors are bound by letters of appointment which are available for inspection on request at our registered office. Non-Executive Directors are appointed for fixed terms not exceeding three years,

which may be renewed subject to their re-election by shareholders at AGMs, with three months’ notice. The Chair’s letter of appointment was issued on 30 October 2023: his appointment may be terminated by either

party upon three months’ notice.

Fees for new Non-Executive Directors appointed will be set in accordance with the terms of the approved remuneration policy in force at the time of appointment.

Non-Executive Director Policy implementation in 2025 (unaudited)

The applicable Non-Executive Director fees as at 1 January 2025 are shown in the table above. The Board may review fee levels during the year in line with the Policy.

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Role and focus of the Remuneration Committee

The Committee is responsible for recommending to the Board the Remuneration Policy for Executive Directors and senior management, and for setting the remuneration packages for Executive Directors and senior

management including material risk takers.

The table below outlines the activity undertaken by the Committee in its six scheduled meetings in 2024.

Committee activities January February March May October November

Directors’ remuneration

Review of the directors’ remuneration policy and implementation

Review of individual performance, fixed and variable remuneration

Senior management remuneration

Contractual terms, joiners and leavers

Review of individual performance, fixed and variable remuneration

All colleague remuneration

Annual salary review approach

Incentive measures, targets and outcomes. Scorecard review

Reward policies and rules review

Share plans, pension and benefits

Other

Broader people activity e.g. talent management, colleague engagement

Risk review/input and risk adjustment related activity

Non-Executive Director Expenses Approach

Reward governance

Review regulatory, investor and market developments

Remuneration disclosures (such as DRR and gender pay gap) and regulatory policy statement

Review investor feedback

Terms of reference, Committee evaluation, advisers

In addition, the Committee met in January, February and March 2025 to consider (and, where appropriate, approve):

• the draft Directors’ Remuneration Policy and Report

• how the Directors Remuneration Policy would be implemented in 2025, including variable remuneration measures and associated targets

• salary and fixed remuneration for Executive Directors and other management

• the extent to which any 2024 annual bonus performance measures had been satisfied, together with individual award levels

• the extent to which the 2021 and 2022 LTIP performance measures had been satisfied.

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Shareholder voting and consideration of shareholder views

At the Annual General Meeting in May 2024, shareholders approved the Directors’ Remuneration Report published in the Metro Bank PLC Annual Report and Financial Statements, receiving a strong vote in favour.

Details of recent shareholder votes on remuneration are shown below.

Item For no. For % Against no. Against % Votes withheld

Metro Bank Holdings PLC Directors’ Remuneration Report – May 2024 527, 225,4 53 99.49 2,689,242 0.51 374,851

Metro Bank Holdings PLC Directors’ Remuneration Policy – May 2024 529,109,540 99.85 805,150 0.15 374,856

Metro Bank PLC Directors’ Remuneration Report – April 2023 84,129,882 91.35 7,965 , 230 8.65 751,503

Metro Bank PLC Directors’ Remuneration Report – May 2022 69,619,984 91.23 6,692,221 8.77 2,780

The Committee greatly values the continued dialogue with our shareholders and the engagement with shareholders and representative bodies to take their views into account when setting and implementing our

remuneration policies. The Directors have regular open discussions with investors and are available for feedback on remuneration matters.

The Committee looks forward to engaging with shareholders in the run up to the vote on both the remuneration policy and remuneration report at the forthcoming AGM.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

The Directors have the pleasure of presenting the

Bank’s Annual Report and Accounts for the year

ended 31 December 2024. As set out fully in the

summary of significant accounting policies within

note 1 to the financial statements, this report for

the consolidated Group has been prepared in

accordance with IFRS and includes the Corporate

Governance Report set out on page 48.

The Directors consider the Annual Report and

Accounts for the year ended 31 December 2024,

taken as a whole, is fair, balanced and

understandable, and provides the information

necessary for shareholders to assess the Group’s

position and performance, business model and

strategy.

Principal activities

Our principal activities during 2024 were the

provision of banking and related services. We are a

deposit-taking and lending institution with a focus

on retail and small and medium sized commercial

customers, offering consistent fair pricing and

excellent customer service. We are authorised to

accept deposits under the Financial Services and

Markets Act 2000, have a Consumer Credit Act

licence and are members of the Financial Services

Compensation Scheme.

Results and dividend

The results for the year are set out in the

consolidated statement of comprehensive income

on page 161.

No dividend was declared or paid during 2024

(2023: £nil). The Directors do not anticipate

declaring a dividend in the near future.

Articles of Association

The Articles of Association can be found on our

website at: metrobankonline.co.uk.

Directors’ report

Share capital

As at 31 December 2024, our issued share capital

was £672.98 comprising 672,979,623 ordinary

shares of 0.0001p each and 50,000 redeemable

preference shares of £1 each. Further details of our

called-up share capital, together with details of

shares allotted during the year, are shown in note

26 to the financial statements on page 189.

There are no restrictions on the transfer of our

share capital and there are no shares or stock

which carry specific rights with regards to control

of the Group.

Holders of ordinary shares are entitled to receive

dividends when declared, to receive the Group’s

Annual Report, to attend and speak at general

meetings of the Company, to appoint proxies and

to exercise voting rights.

2025 Annual General Meeting

More information will be published in the Notice

of Meeting.

Directors

Details of the Directors who served during the year

and continue to serve at the date of approval of

the Directors’ Report are set out on pages 50–51.

James Hopkinson resigned on 12 January 2024.

Cristina Alba Ochoa was appointed as interim CFO

in January and to the Board on 10 June 2024. On

14 October 2024 Cristina stepped down as interim

CFO and was appointed to the Board as a

shareholder-nominated Non-Executive Director,

following nomination by the Bank’s majority

shareholder, Spaldy Investments Limited. Jaime

Gilinski Bacal was appointed to the Board as a

Non-Executive Director on 2 September 2024.

Marc Page was appointed as an Executive Director

on 12 November 2024. Paul Coby was appointed as

Non-Executive Director on 30 December 2024.

Directors are appointed and replaced in accordance

with the Company’s Articles, the Companies Act

2006 and the UK Corporate Governance Code.

The powers of the Directors are set out in the

Company’s Articles and the Companies Act 2006.

Directors’ interests

Details of the Directors’ beneficial interests are

set out in the Annual Report on Remuneration on

page 108.

Directors’ indemnities and Directors’

and Officers’ liability insurance

Details regarding deeds of indemnity and Directors’

and Officers’ liability insurance are set out in the

Corporate Governance Report on page 65.

The Company’s existing share plans contain

provisions relating to a change of control.

Outstanding options and awards may vest and

become exercisable on a change of control subject

to the People and Remuneration Committee’s

discretion. As at 31 December 2024, save in

respect of provisions of the Company’s share

plans, there are no other agreements between the

Company and its Directors or colleagues providing

for compensation for loss of office or employment

that occur following a takeover. Certain of the

Company’s third party supplier agreements may

become terminable upon a change of control of

the Company.

Directors who served on the Board during the year ended 31 December 2024 and up to the

date of this report

Appointment date Resignation date

Robert Sharpe (Chair) 1 November 2020

Daniel Frumkin (CEO) 1 January 2020

James Hopkinson (CFO) 5 September 2022 12 January 2024

Cristina Alba Ochoa (CFO) 10 June 2024 14 October 2024

Marc Page (CFO) 12 November 2024

Catherine Brown (Senior Independent Director) 1 October 2018

Dorita Gilinski (Shareholder Nominated NED) 26 September 2022

Jaime Gilinski Bacal (Shareholder Nominated NED) 2 September 2024

Cristina Alba Ochoa (Shareholder Nominated NED) 15 October 2024

Paul Coby (Independent NED) 30 December 2024

Paul Thandi (Independent NED) 1 January 2019

Michael Torpey (Independent NED) 1 September 2019

Nicholas Winsor (Independent NED) 20 April 2020

Major interests in shares

Information provided to the Group by substantial

shareholders pursuant to the Disclosure Guidance

and Transparency Rules (DTR) is published via a

Regulatory Information Service.

As at 1 April 2025, being the last practical date

before publication of this report, the Group has

been notified under DTR 5 of the interests in its

issued share capital, and these are set out in the

table below. All such shareholders have the right to

vote in all circumstances at general meetings. The

information provided below was correct at the

date of notification; however, the date received

may not have been within the current financial year.

It should be noted that these holdings are likely to

have changed since the Group was notified.

However, notification of any change is not required

until the next notifiable threshold is crossed.

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Directors’ report continued

Engagement with stakeholders

The Board recognises that the long-term success

of the Bank will depend upon the interests of all our

stakeholders and this view is intrinsic in our

decision making. More information on our

stakeholders, how we engaged with them and how

the Board took them into consideration when

making decisions are set out in the Corporate

Governance report on pages 56–58.

Diversity

Our D&I Policy outlines our commitment to

employment policies which follow best practice,

based on equal opportunities for all colleagues.

We aim for our workforce to reflect the diverse

communities in which we operate and recognise

that diversity is not only a key part of a responsible

business strategy, but also supports a strong

customer experience. We give full and fair

consideration to all applications for employment.

Shareholder Ordinary shares held

% of total

ordinary

Direct/

indirect

interest

Spaldy Investments Limited 355,723,914 52.88% Direct

Spruce House Partnership 15,500,000 8.99% Direct

Davis Selected Advisers 9,191,516 5.33% Indirect

Ruane, Cunniff and Goldfarb 5,020,755 5.15% Direct

Greenhouse gas emissions

Our energy consumption and associated GHG emissions during 2024 are set out in the Strategic report

on page 27.

Colleague involvement

We encourage colleague involvement in the Bank. Increasing colleague awareness of the financial and

economic factors that affect us plays a major role in maintaining our customer focus. More information

on our colleagues and how we engaged with them can be found in the Corporate Governance report

on pages 56 and 59–60.

Our Board Diversity Policy, which sets out our

commitment to D&I for the Board can be found on

our website at: metrobankonline.co.uk/investor-

relations.

We believe that a diverse Board, appointed on

merit, with a broad range of skills, backgrounds,

knowledge and experience, is a more effective and

responsible Board.

More information on our performance against our

objectives within the policy can be found in the

Nomination Committee report on page 74.

Disabled employees

For all colleagues and candidates we always look to

make reasonable adjustments to ensure equality.

In the event of colleagues identifying as disabled,

we make every effort to ensure that their

employment continues and to provide appropriate

training and support. Our policy is that the training,

career development and promotion of disabled

persons should, as far as possible, be identical to

that of other colleagues.

Modern slavery

We are committed to supporting the communities

in which we operate in order to enable them to

develop both socially and economically. Our policy

is to conduct all business in an appropriate manner

and we have zero tolerance for modern slavery. We

continue to be committed to acting professionally

and fairly in all our business dealings and

relationships wherever we operate, including

enforcing appropriate systems and controls to

ensure, on a risk basis, that modern slavery is

not taking place in our business or supply chains.

The initiatives and how we have developed them

during 2024 can be found on page 70. The Chair of

the Audit Committee is appointed as our Modern

Slavery Champion, who with the CEO monitors

ongoing compliance with the Modern Slavery

Policy.

Our Modern Slavery Statement is available at:

metrobankonline.co.uk.

Internal control and risk

management systems

The Directors confirm that they have undertaken a

robust assessment of the emerging and principal

risks facing the Group. We seek to manage all risks

that arise from our activities. Details of risk

management systems, and details of risk

management objectives and policies, are shown in

the Risk Report on pages 121–150. Details around

the processes in place in relation to financial

reporting can be found in the Audit Committee

Report on pages 66–70. As a result of normal

business activities, we are exposed to a variety of

risks. The principal risks and uncertainties that we

face are shown in the Risk Report.

Going concern

The financial statements are prepared on a going

concern basis, as the Directors are satisfied that

the Group and Parent Company have the

resources to continue in business for a period of at

least 15 months from the financial statements

authorisation date. Further details can be found in

the Viability statement (details of which can be

found below).

Viability statement

Our Viability statement is set out on pages 46–47.

Hedge accounting

The policy for hedging transactions is detailed in

note 21.

External Auditors

Our External Auditors, PwC, have indicated their

willingness to continue in office and a resolution

seeking to reappoint them will be proposed at the

2025 AGM.

Controlling Shareholder

Independence

On 9 November 2023, Metro Bank entered into a

Relationship Agreement with Spaldy Investments

Limited (“Spaldy”) and Jaime Gilinski Bacal

(together, the ‘Controlling Shareholder’) in relation

to the company’s obligations under the UK Listing

Rules to put in place an agreement with any

controlling shareholder (as defined for these

purposes in the Listing Rules). The Relationship

Agreement covers the three independence

provisions mandated by the Listing Rules: (i) that

contracts between Metro Bank and the Controlling

Shareholder and/or any of its associates will be

arm’s length and normal commercial

arrangements, (ii) that neither the controlling

Shareholder nor any of its associates will take any

action that would have the effect of preventing the

119Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Directors’ report continued

company from complying with its obligations under the Listing Rules; and (iii) neither the Controlling

Shareholder nor any of its associates will propose or procure the proposal of a shareholder resolution

which is intended or appears to be intended to circumvent the proper application of the Listing Rules. The

company has complied with the independence provisions in the relationship agreement and as far as the

company is aware the independence and procurement provisions in the relationship agreement have

been complied with in the period by the controlling shareholders.

Political donations

We made no political donations in the year ending 31 December 2024 (2023: £nil).

Research and development

During the year, we spent £19 million on intangible assets and a further £25 million on research

and development costs which were not capitalised.

Post balance sheet events

Our post balance sheet events are set out in note 38 to the financial statements.

Future developments

Our business and future plans are set out in the Strategic Report.

Financial instruments and financial risk management

Information relating to financial instruments and financial risk management can be found on pages

125–143 and in note 10 to the financial statements.

Listing Rules disclosures

For the purposes of LR 9.8.4R, the information required to be disclosed by LR 9.8.4R can be found

in the following sections of the Annual Report:

Item Location

Detail of long-term

incentive schemes

Annual Report on Remuneration and in note 29 to the financial

statements

Contracts of significance Any contracts of significance or related party transactions can be found

in note 35 to the financial statements

Waived emoluments Annual Report on Remuneration

Corporate Governance Statement

Our Corporate governance report is set out on

page 48 in accordance with Rule 7.2 of the DTR

and Rule 9.8.6 (5) and (6) of the Listing Rules forms

part of this Directors’ Report.

Statement of Directors’

responsibilities in respect

of the financial statements

The directors are responsible for preparing the

Annual Report and Accounts and the financial

statements in accordance with applicable law

and regulation.

Company law requires the directors to prepare

financial statements for each financial year.

Under that law the directors have prepared the

group and the company financial statements in

accordance with UK-adopted international

accounting standards. Under company law,

directors must not approve the financial

statements unless they are satisfied that they give

a true and fair view of the state of affairs of the

group and company and of the profit or loss of the

group for that period. In preparing the financial

statements, the directors are required to:

• select suitable accounting policies and then

apply them consistently;

• state whether applicable UK-adopted

international accounting standards have been

followed, subject to any material departures

disclosed and explained in the financial

statements;

• make judgements and accounting estimates that

are reasonable and prudent; and

• prepare the financial statements on the going

concern basis unless it is inappropriate to

presume that the group and company will

continue in business.

The directors are responsible for safeguarding the

assets of the group and company and hence for

taking reasonable steps for the prevention and

detection of fraud and other irregularities. The

directors are also responsible for keeping

adequate accounting records that are sufficient

to show and explain the group’s and company’s

transactions and disclose with reasonable

accuracy at any time the financial position of the

group and company and enable them to ensure

that the financial statements comply with the

Companies Act 2006.

The directors are responsible for the maintenance

and integrity of the company’s website. Legislation

in the United Kingdom governing the preparation

and dissemination of financial statements may

differ from legislation in other jurisdictions.

Directors’ confirmations

The Directors consider that the Annual Report and

Accounts and Financial Statements, taken as a

whole, is fair, balanced and understandable and

provides the information necessary for

shareholders to assess the group’s and company’s

position and performance, business model and

strategy.

In the case of each director in office at the date the

directors’ report is approved:

• so far as the director is aware, there is no

relevant audit information of which the group’s

and company’s auditors are unaware; and

• they have taken all the steps that they ought to

have taken as a director in order to make

themselves aware of any relevant audit

information and to establish that the group’s and

company’s auditors are aware of that

information.

The Directors’ report comprising pages 118–120

has been approved by the Board of Directors.

By Order of the Board.

Clare Gilligan

Company Secretary

22 April 2025

120

Metro Bank Holdings PLC Annual Report and Accounts 2024

In this section

124 Risk management framework

125 Risk governance and oversight

125 Risk culture

127 Financial risks

146 Non-financial risks

Risk

121Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Culture, capability and process

Policy framework and

three lines of defence

Executive

leadership

committees

Board of

Directors

The Board sets the risk appetite,

approves the risk management framework

policies and maintains an appropriate control

environment.

The Executive leadership committees

oversee the risk management framework

and policies, and the Bank’s strategy for

managing its risks.

The Bank operates a ‘three lines of defence’

model for risk management. Policies are

aligned with the Bank’s prin

cipal risks and

risk appetite.

The Bank fosters a strong risk culture enabled

by procedures, standards and training, and

operates a control environment with collective

responsibility for managing risk.

Risk report

Risk management framework Risk culture

Approach to risk management

Effective risk management is critical to achieving our strategic objectives. It is a key component of our day-to-day

operational activities and is integrated within our strategic change initiatives. Our established Enterprise Risk

Management Framework sets out how we identify, assess, manage and monitor the risks we face and is supported by a

comprehensive suite of risk policies for colleagues to apply. These help the Bank to fulfil its obligations under the UK

Corporate Governance Code 2018:

Risk management process

Our risk management process comprises the following key stages that enable the Board to fulfil its obligations under

the Corporate Governance Code 2018:

1. Identification of the risks we are exposed to at various levels, making use of the Bank’s established Risk Taxonomy.

2. Assessment or measurement of the identified risks using suitable risk management tools.

3. Response to the risk exposures, applying and operating appropriate controls to mitigate the risks to acceptable

levels.

4. Monitoring and reporting of these risks to ensure they remain within risk appetite.

Managing risk is a key part of our AMAZEING values, which underpin everything

we do. We continually seek to enhance our risk management framework to ensure

we have the right capabilities in place to manage our risks within appetite and,

in turn, deliver our strategic plan.

Our risk culture is shaped by our executive team and senior leaders, enabled

through operation of the Senior Managers and Certification Regime and its

principals of personal accountability. Risk management is a key aspect of every

colleague’s objectives and is embedded within our scorecard, against which

performance is measured. We work to create an environment in which colleagues

are encouraged and able to raise concerns and all colleagues are provided with

risk training to ensure they develop and maintain the required levels of

competence.

Risk management

framework

Risk culture

Principal and

emerging risks

Governance

Risk

management

process

Risk operating

model

Risk appetite

on page 124

on page 121

on page 124

122

Metro Bank Holdings PLC Annual Report and Accounts 2024

Risk governance and oversight

All of our colleagues are risk managers, in

accordance with our ‘Three Lines of Defence’

risk model. Risk capability is embedded within

the first line of defence (business) teams,

overseen by our central Risk and Internal Audit

teams in the second and third lines

respectively.

Effective operation of the three lines of

defence results from:

• colleagues being equipped with the

necessary skills and experience to manage

risks and their responsibilities being well

understood

• collaboration between colleagues across

the lines, working with a common objective

and in a healthy risk culture

• well-defined governance structures and

processes that promote accountability

and action.

Risk report continued

Risk management framework

First line Second line Third line

Lines of

defence

• Own and manage the risks we face

and agree, establish, embed and

comply with risk frameworks,

policies and standards

• Design, implement and maintain

effective controls

• Align strategy with, and monitor

exposure against, appetite

• Ensure adequate resources, tools

and training are in place

• Promote and maintain an

appropriate risk culture

• Establish and communicate the

framework, governance structure

and underlying policies and

standards

• Provide oversight and challenge the

first line via review, enquiry and

discussion

• Report/escalate to executive

management and the Board

• Facilitate the development of risk

appetite, tools and training

• Independently verify that the

framework is operating effectively

• Validate the first and second line

approach to risk management

• Assess against regulatory

developments and leading

practices

Risk

governance

committees

• Executive Committee

• Business Risk Committees

• Risk Oversight Committee

• Executive Risk Committee

• Other executive-level risk

committees

• Audit Committee

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Risk report continued

Risk appetite

We define risk appetite as the aggregate level and

types of risk that we are willing to accept in our

pursuit of our business objectives. Qualitative

statements are in place which articulate our risk

appetite to stakeholders and provide a view on the

risk-taking activities with which the Board is

comfortable, guiding our decision-makers in their

strategic and business decisions.

The risk appetite statements detail the risk

parameters within which we seek to operate,

promoting good customer outcomes and

protecting us from excessive risk exposures.

The Board-owned statements are reviewed at least

annually and include quantitative metrics which

inform strategies, targets, policies, procedures and

other controls.

We actively monitor exposure against our stated

risk appetite on an ongoing basis. Key risk

indicators are in place for all principal risks and

these are reported regularly to Executive and

Board committees together with actions and

assessment of the adequacy of response. Business

areas supplement monitoring of risk appetite with

additional key risk indicators that are set within the

overall parameters of those reported to the Board.

Our overall risk appetite statement is set out below.

Overall risk appetite statement

The Bank has a clear goal: to empower colleagues

and communities, offering a superior level of

service, whilst consistently delivering good

customer outcomes and operating on an inclusive

and socially responsible basis. It strives to achieve

this by creating FANS, digitally and via its network

of stores and AMAZE Direct, creating sustainable

growth for its stakeholders, living by its AMAZEING

values and taking active steps to reduce any

negative impact on the climate and environment as

a whole. We seek to balance risk and return as

articulated in risk appetite statements which are

separately defined for the Bank’s principal risks,

operating controls and processes and remaining

within its impact tolerances at all times.

Board

Sets risk appetite and strategy

• Sets our strategy, corporate objectives and risk appetite • Ensures an adequate framework is in place for reporting and managing

risk

• Maintains an appropriate control environment to manage risk effectively • Ensures capital, liquidity and other resources are adequate to achieve

our objectives within risk appetite

Risk Oversight Committee (ROC)

Oversees risk governance and management

• Recommends risk appetite statement measures to the Board • Reviews risk exposures in relation to the risk appetite

• Reviews risk frameworks and policies, and approves or recommends to

the Board for approval

• Monitors the effectiveness of risk management processes and

procedures put in place by management

Audit Committee

Oversees financial reporting

• Reviews our annual and half-year financial statements and accounting

policies

• Reviews the effectiveness of the internal audit, audit controls,

whistleblowing and fraud systems in place

• Advises on the appointment of external auditors • Reviews internal and external audits and controls, monitors the scope of

the annual audit and the extent of the non-audit work undertaken by

external auditors

Executive-level committees

Oversee the risk management framework

Executive Risk Committee (ERC)

• Endorses the risk appetite for approval by the Board and monitors

performance against risk appetite

• Reviews and recommends risk frameworks for approval by ROC (and

Board as appropriate)

• Oversees the quality and composition of the credit risk portfolio, and

recommends strategies to adjust the portfolio

• Oversees and advises on financial and non-financial risk matters,

including those escalated from oversight committees

Asset and Liability Committee (ALCO)

• Monitors performance against the Board capital/funding plans

• Ensures that we meet internal liquidity and capital targets

• Agrees pricing decisions to ensure visibility of capital and liquidity

impacts

• Monitors interest rate risk

Credit Approval Committee (CAC)

• Approves higher value lending requests

Impairment Committee (ICOM)

• Reviews and approves monthly portfolio-level impairment results

124

Metro Bank Holdings PLC Annual Report and Accounts 2024

Credit risk

Risk definition (audited)

The risk of financial loss should our borrowers or counterparties fail to fulfil their contractual obligations in

full and on time.

Risk appetite statement (audited)

We have an active appetite for credit risk. Our credit risk appetite reflects our approach to relationship

banking, providing lending capacity to support UK retail and commercial customers. In line with our

continued strategy to expand our commercial lending and pivot further towards specialist retail

mortgages, our credit risk appetite reflects the balance of supporting the lending plan and change in

lending mix, and maintaining an acceptable tolerance for losses in the current macroeconomic

environment. To enable us to remain within this tolerance, we control the quality of our credit assets

through quantitative credit limits and a comprehensive credit risk management framework whilst seeking

to limit concentrations in credit exposures.

Exposure and assessment

Our primary source of credit risk is through the loans, limits and advances we make available to

our customers. We have exposures across three key areas: retail mortgages, consumer lending,

and commercial.

The maximum credit risk exposure equals the total carrying amount of the above primary sources of

credit risk (including other financial instruments) plus off-balance sheet undrawn committed mortgage

facilities.

We manage credit risk throughout the lending activity lifecycle and within clear risk appetite limits via a

comprehensive set of policies and lending criteria. Individual credit decisions are controlled through both

quantitative models and review under delegated lending authority depending on the product, materiality,

and complexity of the exposure. Prior to approval of a new or amended credit facility, the risk of the

customer and transaction must be assessed and approved through an automated decision engine or

though delegated lending authority using procedures in compliance with the relevant lending policy.

Retail lending decisions are made in the first instance through an automated process. This includes a

quantitative credit scorecard to assess likelihood of arrears, an affordability model to assess capacity to

pay and assign a credit limit, and a set of rules that set credit criteria and automate credit policy. This

assessment is further subject to verification of information such as financials, and valuation of collateral

and in many cases a manual underwriter review is also performed as part of the credit approval process.

Corporate and commercial exposures are individually assessed under delegated lending authority with

some smaller exposures assessed through a retail approach.

Credit risk measurement and management (audited)

We use a wide range of measures to assess, control and monitor credit risk including a suite of reports

covering performance against risk appetite limits and key credit risk metrics such as new business flow,

portfolio quality, early warning indicators, arrears and recovery performance, sector and geographical

concentration, and exceptions to lending policy. Reports are provided periodically to the Executive Risk

Committee, Risk Oversight Committee, Group Risk Oversight Committee and the Board. Where required,

further insight on credit risk performance is obtained through portfolio reviews, and deep dives on

material portfolios and key credit risk themes.

In addition, we measure credit risk through the application of models that use internal and external data to

calculate expected credit loss (ECL). These calculations are based on the application of IFRS 9 models and

staging to determine the relevant term of the calculation (12 months or lifetime) and incorporate

assessments of the probability of default (PD), loss given default (LGD), and exposure at default (EAD).

There are individual assessments of defaulted commercial exposures (and for mortgage exposures in

some circumstances), and where relevant, management judgement via post model adjustments (PMAs)

and management overlays (MOs). The impairment assessment for year-end 2024 has been undertaken in

line with our Impairment Policy.

All models are subject to independent validation and are approved through the Model Risk Committee

(MRC). PMAs have also been reviewed and approved at MRC. The overall ECL position and methodology is

reviewed and approved by the Impairment Committee (ICOM) which is a sub-committee of Executive Risk

Committee (ERC). Individual impairments for defaulted commercial customers are approved by the

Individual Impairment Committee, a sub-committee of ICOM.

Rigorous internal challenge is undertaken to assess the reasonableness of the impairment calculations,

models, MO/PMAs, individual assessments and overall level of impairments.

IFRS 9 staging and ECL recognition (audited)

IFRS 9 requires accounts to be allocated into one of three stages. Stage 3 reflects accounts in default.

Stage 2 are the accounts which have shown a significant increase in credit risk since origination (SICR),

with all other lending falling into Stage 1. IFRS 9 requires a higher level of ECL to be recognised for

underperforming loans. For loans in Stage 2 and Stage 3 a lifetime ECL is recognised, with a 12-month ECL

for performing loans (Stage 1).

An assessment of whether credit risk has increased significantly since initial recognition is performed at

each reporting period by considering the change in the PD over the remaining life of the financial

instrument. Judgement may be required to determine when a significant increase in credit risk has

occurred.

The assessment for a retail financial instrument compares the PD occurring at the reporting date to that at

initial recognition, considering reasonable and supportable information, including information about past

events, current conditions, and future economic conditions. The assessment for a commercial financial

instrument is based on quantitative and qualitative assessment, including financial performance, forecast

economic conditions and our internal credit risk rating grade.

Further details can be found in the accounting policy on pages 193–199.

Financial risks

Financial risk covers several categories of risk which have the

potential to impact the Bank’s capacity to support its customers

and continue operating in a safe, sustainable and compliant way.

Financial risks include credit risk, capital risk, liquidity and

funding risk and market risk.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Financial risks continued

Non-performing loans (NPLs)

A loan will be considered to be ‘non-performing’ or ‘credit impaired’ when it meets our definition of

default. A loan will be classed as in default when the loan is greater than 90 days past due, or the borrower

is considered unlikely to pay without realisation of collateral. Unlikeliness to pay is assessed through the

presence of triggers including the loan being in repossession, the customer having been declared

bankrupt, or evidence of financial distress leading to forbearance. This definition of default is aligned with

internal credit risk management policies, and accounting and regulatory definitions.

A loan is considered to be non-performing when it is subject to forbearance measures, consisting of

concessions in relation to:

• a modification of the previous terms and conditions of the loan which the borrower is not considered

able to comply with due to financial difficulty; or

• a total or partial refinancing of a troubled debt contract that would not have been granted had the

borrower not been in financial difficulties.

In some cases it may not be possible to identify a single discrete event which defines an asset as ‘non-

performing’ or ‘credit impaired’. Instead, the combined effect of several events may cause financial assets

to become credit impaired.

Where an asset which has been classified as Stage 3 is showing improving trends and is no longer

considered non-performing or credit impaired, a probation period of at least three consecutive months

during which the instrument should meet the criteria for exiting default must elapse before it is

transferred to Stage 2.

Credit exposure summary

The following table provides an overview of the performance of our portfolios during 2024. Total loans

and advances to customers have decreased in 2024 by £3.3 billion from £12.5 billion to £9.2 billion.

Reductions have been driven by the sale of a mortgage portfolio and run-off of the personal loan and

credit card portfolios.

Table 1: Total expected credit losses by portfolio (audited)

31 December 2024 31 December 2023

Gross

carrying

amount

£’million

ECL

allowance

£’million

Net carrying

amount

£’million

Gross

carrying

amount

£’million

ECL

allowance

£’million

Net

carrying

amount

£’million

Retail mortgages 5,145 (15) 5,130 7,817 (19) 7,798

Consumer lending 745 (108) 637 1,297 (108) 1,189

Commercial lending 3,314 (68) 3,246 3,382 (72) 3,310

Total loans and advances

to customers 9,204 (191) 9,013 12,496 (199) 12,297

Table 2: Total portfolio credit performance

31 December 2024 31 December 2023

Coverage ratio (including Stage 3) 2.07% 1.59%

% loans in Stage 2 11% 12%

% loans in Stage 3 5% 3%

90+ days past due 3% 2%

1. Coverage ratio calculated using underlying figures.

Our retail mortgages portfolio reduced by £2.7 billion during 2024 whilst consumer lending and

commercial also reduced by £552 million and £69 million respectively.

Non-performing loans

The below table provides information on NPLs by portfolio.

Table 3: Non-performing loans

31 December 2024 31 December 2023

Group

NPLs

£’million

NPL

Ratios

NPLs

£’million

NPL

Ratios

Retail mortgages 203 3.95% 146 1.87%

Consumer 97 13.02% 77 5.94%

Commercial 204 6.16% 166 4.91%

Total 504 5.48% 389 3.11%

NPLs increased to £504 million (31 December 2023: £389 million) with the overall NPL ratio increasing

to 5.48% (31 December 2023: 3.11%). The NPL ratio for mortgages has increased to 3.95% (31 December

2023: 1.87%). This is driven by the mortgage portfolio sale (where accounts in arrears were excluded

from the sale) and new defaults primarily due to accounts moving to 90+ day arrears. The NPL ratio

for consumer customers has increased to 13.02% (31 December 2023: 5.94%) driven by the run-off

of the personal loan and credit card portfolios. The NPL ratio for commercial has increased to 6.16%

(31 December 2023: 4.91%) driven by a small number of larger individual cases in Q4, which was partially

offset by BBLS claims. The small number of larger individual cases are fully collateralised and therefore

ECL is immaterial. Excluding these cases, commercial NPLs would be 4.41%.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Financial risks continued

Credit risk exposure by internal PD rating

The table below summarises balances by PD bandings and IFRS 9 production stage at a total bank level. All PDs include forward looking information and are based on 12-month values for all stages.

Table 4: Credit risk exposure, by IFRS 9 12-month PD rating and stage allocation (audited)

31 December 2024

Gross carrying amount (£’million) Loss allowance (£’million)

All Portfolios

IFS 9 PD range

% Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total

ECL coverage

Band 1 0.00 – 3.00 6,865 404 – – 7, 269 27 3 – – 30 0.41

Band 2 3.00 – 17.00 592 422 – – 1,014 11 14 – – 25 2.47

Band 3 17.00 – 99.99 266 152 – – 418 1 12 – – 13 3.11

Band 4 100 – – 504 (1) 503 – – 124 (1) 123 24.45

Total – 7,723 978 504 (1) 9,204 39 29 124 (1) 191 2.07

31 December 2023

Gross carrying amount (£’million) Loss allowance (£’million)

IFS 9 PD range

% Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total

ECL coverage

Band 1 0.00 – 3.00 8,928 499 – – 9,427 29 3 – – 32 0.34

Band 2 3.00 – 17.00 1,664 883 – – 2,547 33 27 – – 60 2.36

Band 3 17.00 – 99.99 4 129 – – 133 1 13 – – 14 10.53

Band 4 100 – – 389 – 389 – – 93 – 93 23.91

Total – 10,596 1,511 389 – 12,496 63 43 93 – 199 1.59

1. Coverage ratio calculated using underlying figures.

The information in the tables above have been presented at a total bank level including BBLS.

Expected credit loss (audited)

ECL has reduced during the year by £8 million to £191 million (31 December 2023: £199 million)

predominantly driven by the mortgage portfolio sale, repayments in commercial, run off of personal loan

and credit card portfolios, and improvements in macroeconomic scenarios. The Bank continues to hold

overlays to reflect the continued macroeconomic uncertainty given the higher interest rates and

anticipated property price falls not fully captured in the latest macroeconomic scenarios and IFRS 9

models. More details can be found on pages 197 to 199.

Cost of risk

Table 5 provides information on the cost of risk. Cost of risk is the credit impairment charge expressed

as a percentage of average gross lending over the year.

Table 5: Cost of risk

Group 31 December 2024 31 December 2023

Retail mortgages (0.03%) (0.01%)

Consumer 0.71% 3.29%

Commercial (0.01%) (0.30%)

Total 0.06% 0.26%

The overall cost of risk (CoR) has decreased and this is driven by significantly lower losses on commercial

compared to 2023 as well as the run-off of the personal loans and credit cards portfolios. The CoR for

retail mortgages has decreased primarily as a result of the mortgage portfolio sale which is partially offset

by the increase in early arrears and defaults due to customers moving onto higher interest rates. The CoR

for commercial has increased, however remains a net writeback for the year, reflecting the improvement

in the underlying commercial portfolio.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Financial risks continued

Overall balances have reduced for bands 1 and 2 driven by a mortgage portfolio sale and run-off of the

consumer portfolio personal loan and credit card portfolios. The migration observed to band 3 is driven

by BBLS. The majority of BBLS accounts remaining have a PD that sits around the threshold of 17% and

they can therefore fluctuate between bands 2 and 3 month on month.

Stage 2 balances

Stage 2 balances are identified using quantitative and qualitative tests that determine the SICR criteria.

In addition, customers that trigger the 30 days backstop classification are also reported in Stage 2, in line

with IFRS 9 standards. The Bank’s SICR assessment is set out on page 194.

Table 6: Stage 2 balances

31 December 2024

£’million

31 December 2023

£’million

Gross carrying

amount

Loss

allowance

Gross carrying

amount

Loss

allowance

Quantitative 836 18 1,353 30

Qualitative 105 6 103 5

30 days past due backstop 37 5 55 8

Total Stage 2 978 29 1,511 43

Note: Where an account satisfies more than one of the Stage 2 criteria above, the gross carrying amount and loss allowance has

been assigned in the order presented. For example, an account that triggers both quantitative and qualitative SICR criteria will

only be reported as quantitative SICR.

Stage 2 balances have decreased in 2024. The reduction is primarily driven by a mortgage portfolio sale

and portfolio rundown, however improvements in macroeconomic outlook have also resulted in

customers no longer triggering SICR, and transferring back to Stage 1. As at 31 December 2024, 85%

(31 December 2023: 90%) of Stage 2 balances triggered quantitative SICR criteria, 11% (31 December

2023: 7%) triggered qualitative SICR and the remaining 4% (31 December 2023: 4%) triggered the

30 days past due backstop criteria.

Portfolio level analysis – Retail mortgages

Table 7 summarises key credit performance metrics for the retail mortgages portfolio.

Table 7: Retail mortgage credit performance

31 December 2024

£’million

31 December 2023

£’million

Loans and advances 5,145 7,817

Loss allowance 15 19

Coverage ratio

0.29% 0.24%

% loans in Stage 2 11% 10%

% loans in Stage 3 4% 2%

90+ days past due 2% 1%

1. Coverage ratio calculated using underlying figures.

Portfolio and credit risk profile

Mortgage balances have reduced during 2024 to £5,145 million (31 December 2023: £7,817 million) as a

result of the £2.5 billion mortgage portfolio sale, run-off of our legacy acquired portfolios and modest

levels of new lending.

Portfolio average DTV has increased by 1% to 59% as at 31 December 2024 (31 December 2023: 58%)

reflecting the changing shape of the portfolio and reductions in house prices.

Portfolio arrears have increased from a low base during 2024 due to the impact of the cost of living

and interest rate rises. Early arrears cases (>1 to <3 months in arrears) have increased by 0.58% to 1.55%

at 31 December 2024 (31 December 2023: 0.97%) with 0.39% of the increase due to the mortgage

portfolio sale. Accounts that are 3 or more months in arrears have increased by 1.14% from 1.08% at

31 December 2023 to 2.22% at 31 December 2024 with 0.67% of the increase as the result of the

mortgage portfolio sale. Increases in arrears have been seen to a greater extent in the legacy acquired

portfolios that are in run-off and have greater sensitivity to interest rate rises. The acquired portfolios

were not written under Metro Bank credit criteria and do not represent similar arrears profiles to organic

lending. Overall, 57% of the portfolio are now on interest rates >4%.

Retail mortgage new lending has continued to be of good quality during 2024. The average LTV was

69% (2023: 63%. 2022: 69%) and the proportion of lending with an LTV over 90% was only 1.5%. The

limited company buy-to-let product was launched in July 2024; this did not materially impact the volume

of lending in 2024 due to the time to complete and the proportion of new lending that is buy-to-let

remained low in 2024, increasing to 18% from 7% in 2023 (34% in 2022). Near prime lending has continued

to make up a small proportion of new lending (2024: 1.3%) and contributes a small proportion of the

portfolio (December 2024: 0.9%).

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Impairment

The ECL allowance has reduced to £15 million in 2024 (31 December 2023: £19 million) with coverage

increasing to 0.29% (31 December 2023: 0.24%) as a result of the mortgage portfolio sale.

Stage 1 coverage ratio has remained flat (Stage 1: 0.10%). There has been a decrease in coverage ratio in

Stage 2 (0.77% in 2023 to 0.68% in 2024) driven by improvements in macroeconomic scenarios resulting

in a reduction in modelled ECL. There has also been a reduction in Stage 3 coverage ratio (Stage 3: 4.11%

in 2023 to 3.39% in 2024) due to recovery of a large single name case.

Interest-only lending

Interest-only lending holds the additional risk of balance repayment at the end of the mortgage term.

This risk arises principally in the mortgage portfolio where the exposure to interest-only loans stands at

£2.7 billion (31 December 2023: £3.8 billion).

All borrowers of interest-only facilities are assessed as being able to refinance the lending at the end of

the term or have an appropriate repayment plan in place. These loans are also appropriately collateralised

with lower LTV thresholds compared to capital and interest mortgage lending. The table below shows the

amounts of the retail mortgage portfolio that are subject to either interest only, or capital and interest

payments.

Table 8: Retail mortgage lending by repayment type (audited)

31 December 2024 (£’million) 31 December 2023 (£’million)

Repayment type

Retail Owner

Occupied Retail BTL Total

Retail Owner

Occupied Retail BTL Total

Interest only 1,330 1,398 2,728 1,933 1,878 3,811

Capital and interest 2,362 55 2,417 3,918 88 4,006

Total 3,692 1,453 5,145 5,851 1,966 7,817

Geographic exposure

The geographic distribution of our retail mortgages customer balances is set out in Table 9. All of our loan

exposures which are secured on property are secured on UK-based assets. Our current retail mortgages

portfolio is concentrated within London and the South East, which is representative of our customer base

and store footprint. We are expanding our footprint which will reduce the geographical concentration of

lending over time.

Table 9: Retail mortgage lending by geographic exposure (audited)

31 December 2024 (£’million) 31 December 2023 (£’million)

Region

Retail Owner

Occupied Retail BTL Total

Retail Owner

Occupied Retail BTL Total

Greater London 1,324 808 2,132 2,040 1,091 3,131

South East 975 283 1,258 1,564 381 1,945

South West 313 63 376 487 87 574

East of England 379 114 493 590 150 740

North West 155 44 199 268 65 333

West Midlands 154 47 201 240 71 311

Yorkshire and the Humber 107 25 132 185 32 217

East Midlands 104 40 144 180 53 233

Wales 67 13 80 111 17 128

North East 34 7 41 60 8 68

Scotland 80 9 89 126 11 137

Total 3,692 1,453 5,145 5,851 1,966 7,817

Collateral

Table 10 shows the distribution of the retail mortgage portfolio by DTV. The portfolio DTV profile has

increased slightly during 2024 reflecting the changing shape of the portfolio and house price reductions.

Table 10: Retail mortgage lending by DTV (audited)

31 December 2024 (£’million) 31 December 2023 (£’million)

DTV ratio

Retail Owner

Occupied Retail BTL Total

Retail Owner

Occupied Retail BTL Total

Less than 50% 1,282 263 1,545 1,994 439 2,433

51 to 60% 601 210 811 1,069 375 1,444

61 to 70% 611 417 1,028 1,044 642 1,686

71 to 80% 761 543 1,304 1,100 493 1,593

81 to 90% 397 16 413 550 16 566

91 to 100% 39 3 42 89 – 89

More than 100% 1 1 2 5 1 6

Total 3,692 1,453 5,145 5,851 1,966 7,817

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Portfolio level analysis – Consumer

Table 11 summarises key credit performance metrics for the consumer lending portfolio.

Table 11: Consumer credit performance

31 December 2024

£’million

31 December 2023

£’million

Loans and advances 745 1,297

Loss allowance 108 108

Coverage ratio 14.43% 8.33%

% loans in Stage 2 20% 24%

% loans in Stage 3 13% 6%

90+ days past due 12% 5%

Portfolio and credit risk profile

Consumer balances have reduced to £745 million as at 31 December 2024 (31 December 2023: £1,297

million) following a cessation of lending through the RateSetter brand and subsequent cessation of the

credit card product. The performance of this portfolio is aligned with expectations; increases in arrears

and non-performing loans are normal for a rundown portfolio, and as a result of very low levels of

write-offs causing an accumulation of cases in arrears. New lending in 2024 remained strong for

overdrafts with average income and application scores remaining stable.

Impairment

The total ECL coverage position for consumer lending has increased to 14.43% as a result of the run-off of

the personal loan and credit card portfolios, with an increase in arrears and non-performing accounts as a

proportion of the residual portfolio (31 December 2023: 8.3%).

Portfolio level analysis – Commercial

Table 12 summarises key credit performance metrics for the commercial portfolio.

Table 12: Commercial credit performance

31 December 2024

£’million

31 December 2023

£’million

Loans and advances 3,314 3,382

Loss allowance 68 72

Coverage ratio 2.06% 2.13%

% loans in Stage 2 7% 12%

% loans in Stage 3 6% 5%

90+ days past due 2% 2%

Table 13: Summary of commercial lending

31 December 2024

£’million

31 December 2023

£’million

Professional buy-to-let 283 465

Bounce back loans 346 524

Coronavirus business interruption loans 47 86

Recovery Loan Scheme 260 328

Core commercial lending 1,599 1,341

Total commercial term loans 2,535 2,744

Overdrafts and revolving credit facilities 220 172

Credit cards 7 4

SME Asset Finance Limited and SME Invoice Finance Limited 552 462

Total commercial lending 3,314 3,382

Portfolio and credit risk profile

Our commercial lending remains largely composed of term loans secured against property and UK

government-supported lending. In addition, commercial lending includes facilities secured by other forms

of collateral (such as debentures and guarantees), and SME Asset Finance Limited and SME Invoice

Finance Limited.

Our commercial balances have decreased from £3,382 million to £3,314 million during 2024 reflecting the

reduction in our portfolio of buy-to-let and real estate lending, and reduction in government supported

lending.

Commercial customers are managed through an early warning categorisation where there are early signs

of financial difficulty, thereby allowing timely engagement and appropriate corrective action to be taken.

Early warning categories support our IFRS 9 stage classification.

The percentage of the portfolio in early warning categories has fallen during 2024, which is reflected in

the reduction in the proportion of lending balances in IFRS 9 Stage 2. The proportion of lending balances

in Stage 2 has improved from 12% to 7% driven predominantly by accounts being repaid. However, some

deterioration within early warning categories has been observed, and the proportion of lending balances

in Stage 3 has increased from 5% to 6% in 2024. This is driven by a small number of individual cases in Q4,

partially offset by BBLS claims. These individual cases are fully collateralised and therefore ECL is

immaterial. Excluding these cases, Stage 3 would be 4.41%.

Impairment

The ECL allowance has reduced to £68 million in 2024 (31 December 2023: £72 million) with coverage

reducing to 2.07% (31 December 2023: 2.13%). The reduced Stage 2 proportion and coverage reflects

improvement in the underlying commercial portfolio.

Our commercial portfolio consists predominately of SME lending which is reflected in the coverage. The

operating environment continues to be challenging and commercial customers may be impacted by the

pace at which interest rates change, increasing operating costs and economic uncertainty. We continue

to hold appropriate levels of ECL to reflect the higher risk of default.

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Interest-only lending

Interest-only lending in our commercial loans has remained flat at 30% of total commercial term loans in

2024 (31 December 2023: 30%).

Table 14: Commercial term lending – excluding BBLS by repayment type (audited)

31 December 2024 (£’million) 31 December 2023 (£’million)

Repayment Type

Professional

buy-to-let

Other

term loans Total

Professional

buy-to-let

Other

term loans Total

Interest only 270 393 663 438 222 660

Capital and interest 13 1,513 1,526 27 1,533 1,560

Total 283 1,906 2,189 465 1,755 2,220

Geographic exposure

The below table summarises the geographic distribution of the commercial term loans portfolio. 63% of

commercial term loans are to companies in London and the South East (31 December 2023: 71%), which

reflects the historical concentration of our store network. We have seen some diversification away from

London and the South East during 2024 due to new lending.

The following table reflects the geographic distribution of the commercial term loans portfolio

excluding BBLS.

Table 15: Commercial term lending – excluding BBLS by geographic exposure (audited)

31 December 2024 (£’million) 31 December 2023 (£’million)

Region

Professional

buy-to-let

Other –

term loans Total

Professional

buy-to-let

Other –

term loans Total

Greater London 181 813 994 298 852 1,150

South East 48 334 382 88 340 428

South West 10 90 100 15 111 126

East of England 20 200 220 31 122 153

North West 7 115 122 11 106 117

West Midlands 3 185 188 4 101 105

Yorkshire and the Humber 2 11 13 2 17 19

East Midlands 6 55 61 9 44 53

Wales 2 4 6 3 8 11

North East 2 73 75 3 19 22

Northern Ireland 1 1 2 1 2 3

Scotland – 3 3 – 5 5

National 1 22 23 – 28 28

Total 283 1,906 2,189 465 1,755 2,220

Sector exposure

We manage credit risk concentration to individual borrowing entities and sector. Our credit risk appetite

includes limits for individual sectors where we have higher levels of exposure. There has been an overall

reduction in commercial real estate and professional buy-to-let. The following table shows the distribution

of the commercial portfolio across business sectors.

Table 16: Commercial term lending – excluding BBLS by sector exposure (audited)

31 December 2024 (£’million) 31 December 2023 (£’million)

Region

Professional

buy-to-let

Other –

term loans

Total

commercial

term loans

Professional

buy-to-let

Other –

term loans

Total

commercial

term loans

Real estate

(rent, buy and sell) 283 414 697 465 509 974

Hospitality – 442 442 – 368 368

Health & social work – 430 430 – 298 298

Legal, accountancy

& consultancy – 207 207 – 150 150

Retail – 122 122 – 136 136

Real estate (develop) – 14 14 – 14 14

Recreation, cultural & sport – 82 82 – 72 72

Construction – 36 36 – 48 48

Education – 13 13 – 19 19

Real estate (management of) – 5 5 – 7 7

Investment & unit trusts – 6 6 – 7 7

Other – 135 135 – 127 127

Total commercial term lending 283 1,906 2,189 465 1,755 2,220

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Collateral

DTV is calculated for property and cash backed lending in commercial. As at 31 December 2024, 72% of

this secured lending had a DTV of 80% or less, reflecting the prudent risk appetite historically applied.

Lending with DTV >100% includes loans which benefit from additional forms of collateral, such as

debentures. The value of this additional collateral is not included in the DTV but does provide an additional

level of credit risk mitigation. DTV >100% also includes government-backed lending where the facility

does not also benefit from property collateral. The proportion of term lending with a DTV >100% in

2024 was 20% (31 December 2023: 20%). The following table shows the distribution of the commercial

portfolio DTV.

Table 17: Commercial term lending – excluding BBLS by DTV (audited)

31 December 2024 (£’million) 31 December 2023 (£’million)

DTV ratio

Professional

buy-to-let

Other

term loans Total

Professional

buy-to-let

Other

term loans Total

Less than 50% 81 578 659 160 707 867

51 to 60% 39 414 453 59 319 378

61 to 70% 59 275 334 105 185 290

71 to 80% 64 65 129 76 79 155

81 to 90% 38 82 120 60 21 81

91 to 100% 1 45 46 2 11 13

More than 100% 1 447 448 3 433 436

Total 283 1,906 2,189 465 1,755 2,220

Government-backed lending

The table below summarises government-backed lending.

Table 18: Government-backed lending

31 December 2024

No. of loans

Drawn balance

£’million

Average loan

amount

£’million

% of total business

lending

Bounce Back Loan Scheme 19,313 350 0.02 13.4%

Coronavirus Business Interruption Loan

Scheme 199 47 0.24 1.8%

Coronavirus Large Business Interruption

Loan Scheme – – – 0.0%

Recovery Loan Scheme

1,174 260 0.22 10.0%

Total government-backed lending 20,686 657 0.03 25.1%

31 December 2023

No. of loans

Drawn balance

£’million

Average loan

amount

£’million

% of total business

lending

Bounce Back Loan Scheme 22,062 524 0.02 18.8%

Coronavirus Business Interruption Loan

Scheme 240 86 0.36 3.0%

Coronavirus Large Business Interruption

Loan Scheme 2 8 3.92 0.3%

Recovery Loan Scheme

1,304 328 0.25 11.6%

Total government-backed lending 23,608 946 0.04 33.7%

1. Recovery loan scheme includes £45 million acquired from third parties under forward flow arrangements (31 December

2023: £71 million). The loans are held in a trust arrangement in which we hold 99% of the beneficial interest, with the issuer

retaining the remaining 1% (the trust retains the legal title loans).

Undrawn commitments

At 31 December 2024, we had undrawn facilities granted to retail and commercial customers of £881

million (2023: £718 million).

As part of our retail and commercial operations, this includes commitments of £241 million (2023: £327

million) for credit card and overdraft facilities. These commitments represent agreements to lend in the

future, subject to certain conditions. Such commitments are cancellable, subject to notice requirements,

and given their nature are not expected to be drawn down to the full level of exposure.

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Investment securities

As well as our loans and advances, the other main area where we are exposed to credit risk is within our

Treasury portfolio. At 31 December 2024, we held £4.5 billion (31 December 2023: £4.9 billion) of

investment securities, which are used for balance sheet and liquidity management purposes.

We hold investment securities at amortised cost or fair value through other comprehensive income

(FVOCI) depending on our intentions regarding each asset. We do not hold investment securities at fair

value through profit and loss.

Table 19: Investment securities by credit rating (audited)

31 December 2024 £’million 31 December 2023 £’million

Group

Investment

Securities held at

amortised cost

Investment

Securities held at

FVOCI Total

Investment

Securities held at

amortised cost

Investment

Securities held at

FVOCI Total

AAA 3,176 227 3,403 3,400 256 3,656

AA– to AA+ 937 150 1,087 1,003 220 1,223

Total 4,113 377 4,490 4,403 476 4,879

We have a robust securities investment policy which requires us to invest in high-quality liquid debt

instruments. At 31 December 2024, 76% of our investment securities were rated as AAA (31 December

2023: 75%) with the remainder rated AA- or higher, the majority of which comprises of UK gilts.

Additionally, we hold £2.8 billion (31 December 2023: £3.9 billion) in cash balances, which is either held by

ourselves or at the Bank of England.

Response

We have a strong framework in place, controlling credit risk through a set of quantitative limits that

measure the aggregate level and type of credit risk that we are willing to accept to support our business

objectives. Limits are supported by a suite of product-level policies and lending criteria which define the

parameters within which individual exposures can be approved and which manage new lending within our

risk appetite.

Credit risk is further controlled through the use of automated decision tools, underwriter approval and

monitoring of individual transactions. Independent oversight is provided by the Credit Risk function, and

includes independent underwriting of commercial lending, monitoring of performance against limits,

ongoing portfolio monitoring and regular portfolio reviews. The 2024 credit risk appetite limits were set

with reference to the appetite for credit impairments as well as analysis of past performance, peer

comparisons and qualitative approaches using expert judgement. These limits reflect the Bank’s strategy

as well as the macroeconomic outlook.

We have climate change risk management capabilities in place and have policies that outline prohibited

commercial sectors which are of particular concern for climate change. In addition, our policies provide

for enhanced borrower assessment where borrowers operate in other carbon-intensive industries. In

retail mortgages, there are policies in place to mitigate property risk, including the risks that could result

from climate change. These include requirements concerning the durability of the property for the

lifetime of the loan, the requirement that properties must be insurable, and limits for lending on certain

products where the property has received a low EPC rating.

Individual credit decisions are controlled through both quantitative models and review under delegated

lending authority depending on the product, materiality, and complexity of the exposure. These

assessments consider the potential for future stress in customers’ financial positions.

This robust framework continues to support the delivery of our strategy as we continue to grow in

commercial and specialist mortgage lending.

Mitigation (audited)

We mitigate risk through regular monitoring and analysis of our customers and their ability to maintain

contractual obligations, as well as the external factors that can impact customer credit risk. We have

established credit risk policies and lending criteria, and assess customer affordability under different

scenarios where appropriate. We employ specialist expert underwriters in our assessments of our

commercial customers and categorise customer risk as part of our Closer Monitoring and Early Warning

List. This allows for the early identification of customers who may develop financial difficulties, which have

not yet fully materialised. Monthly analysis and reporting provide insight into portfolio credit performance

and highlight where deterioration is taking place or is likely to occur.

In addition to active management and monitoring of our portfolios and customer affordability, we mitigate

credit risk through holding collateral against our retail mortgage and commercial term loan portfolios.

Collateral is usually held in the form of real estate, guarantees, debentures and other liens that we can call

upon in the event of the borrower defaulting. The management of this is governed by our Collateral

Management Policy. At 31 December 2024, 80% (31 December 2023: 80%) of our loans consisted of retail

mortgages and commercial term loans, with average debt to value of 59% (31 December 2023: 58%) and

56% (31 December 2023: 55%), respectively.

Subject matter experts further mitigate the risk of credit losses through regular review and assessment

of cases at an individual level. Specialist teams provide customers with support where financial difficulties

are identified, and the use of automated and manual credit assessments help to ensure good customer

outcomes and to maximise the likelihood that customers maintain the ability to meet their contractual

obligations.

Supporting our customers

We work with our customers who are in arrears, have payment shortfalls or are in financial difficulties to

obtain the most appropriate outcome for both the Bank and the customer. Our primary objective is to

ensure that appropriate mechanisms and tools are in place to support customers during periods of

financial difficulty, and to minimise the duration of the difficulty and the consequence, costs and other

impacts arising.

We will always seek to understand the customer’s individual circumstances and ensure a considered,

measured, and consistent approach is taken which is, to the best of our knowledge, appropriate for their

individual circumstances. Where a customer’s financial difficulty is due to them being impacted by a

vulnerable situation, we will seek to provide tailored and flexible solutions and services appropriate to the

circumstances of the vulnerability. As part of this process, we have a range of treatments that may be

considered to support the customer through the period of financial difficulty, alongside working with

them to understand and agree how to return their account to good standing where possible. This includes

the forbearance options outlined below.

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Commercial customers who are showing signs of potential financial difficulty are supported through our

relationship teams, and where appropriate, our Business & Credit Support team. Each situation is

individually assessed, and our preference is to provide flexibility where possible to help a customer avoid

financial difficulty and to resume normal contractual obligations. Forbearance may be offered where this

is sustainable and appropriate to the nature of the customer’s financial distress.

Forbearance

When our customers show signs of financial difficulties, we may seek to continue our support through

the provision of a concession such as a modification of the terms and conditions of the loan, or a total or

partial refinancing of an existing loan. Concessions can often result in more favourable terms than those

offered or available under normal circumstances. Such events are considered to be acts of forbearance

and are dealt with and monitored in accordance with our forbearance policies and regulatory guidelines.

Monitoring/reporting

Governance

Credit risk is managed within our Enterprise Risk Management Framework, as part of our overarching

three lines of defence model. Management of credit risk is split primarily into the first and second lines

of defence. The first and second lines are operationally independent and have separate reporting lines.

The first line management of credit risk is shared across the Bank’s functions that design, distribute,

approve and service credit facilities, referred to in this document as the ‘lending functions’. These are the

functions under the management of the Managing Director, Corporate and Commercial Banking,

Managing Director, Retail and Business Banking, and the Chief Commercial Officer. The first line lending

functions are responsible for proposing and implementing lending propositions and are responsible for

conducting lending activity in accordance with credit risk appetite and credit policies and standards.

The second line Credit Risk function reports to the Chief Credit Officer who, in turn, reports to the Chief

Risk Officer. The Chief Credit Officer, supported by the Credit Risk team, is responsible for:

• recommending and overseeing credit risk appetite limits

• developing and overseeing credit risk policies and standards

• overseeing credit risk strategies in accordance with policies and risk appetite

• developing and monitoring credit risk models

• providing an independent review and approval of individual commercial credit proposals and renewals

of loan facilities

• developing and overseeing retail arrears management strategies

• managing commercial recoveries strategy and activities

• ensuring appropriate IFRS 9 credit provisions are held

• monitoring and reporting credit risk performance.

Monitoring (audited)

The Credit Risk function monitors the risk profile using a broad range of risk metrics, reporting against risk

appetite limits and completing regular portfolio reviews. This includes oversight of credit risk

performance indicators such as arrears levels, modelled risk measures, such as probability of default and

loss given default, and measures of concentration risk. Stress testing is conducted to assess the impact on

ECL and RWAs.

Credit risk appetite metrics are measured and reported regularly to oversight committees to ensure we

remain within risk appetite and continue to support our strategic objectives. These metrics include a focus

on particular segments of the portfolio which may be susceptible to or indicative of increased levels of

risk, and which are crucial to our strategy. These include modelled risk parameters and performance

metrics such as probability of default and loss given default, as well as concentration metrics such as

sector or geographical concentration. More granular performance metrics are also tracked to assess the

likelihood of potential breaches and their drivers. The limit framework includes early warning thresholds

which identify where action may need to be taken to avoid a breach of appetite limits. If necessary, a plan

is presented to bring the measurements back to approved levels.

A monthly portfolio insight report is presented to ERC and ROC to provide oversight of key indicators and

performance trends. This is supplemented by a detailed suite of portfolio-level reports which are

reviewed by the Credit Risk Oversight Committee. In addition, we perform regular portfolio asset quality

reviews as well as monitoring and reporting on our credit decisioning. We have developed statistical

models that utilise both internal and external data for the purposes of estimating ECL under IFRS 9.

Commercial customers are also monitored through our Closer Monitoring and Early Warning List to

identify the potential risks at an individual level before they materialise and mature.

We monitor the effectiveness of our policies and management framework through the various credit risk

committees outlined. These committees provide oversight of portfolio quality and help inform on where

changes to our strategy or policies are required in response to ongoing developments in the external

environment. In addition, we assess and estimate the risks associated with climate change through

developed models and we continue to develop our quantitative capabilities to further support our

longer-term objectives and increased focus in this area.

Future focus

Our updates to risk appetite and policies put us in a strong position to deliver on the Bank’s strategy for

growth in a way that appropriately manages credit risk.

We remain focused on monitoring emerging trends and the impact of macroeconomic pressures on our

customers, and we work with our customers to support them where needed.

As we develop our future product offering, we will continue to update our credit risk policies, processes

and controls to ensure that these remain appropriate for the developing balance sheet and to support

sustainable growth.

Financial risks continued

134

Metro Bank Holdings PLC Annual Report and Accounts 2024

Capital risk

Risk definition

Capital risk is the risk that the Bank fails to meet minimum regulatory capital (and MREL) requirements.

Management of capital is essential to Metro Bank PLC in the prudent management of its balance sheet,

ensuring its resilience under stress and the maintenance of the confidence of its current and potential

creditors (including bond holders, the bond market, and customers) and key stakeholders in the pursuit of

its business strategy.

Risk appetite statement

Capital – The Bank has a cautious appetite for capital risk. The Board has determined that the Bank shall

be able to maintain a surplus of regulatory capital resources above its total regulatory capital requirement

including public buffers, as communicated by the regulator, with a buffer to include the amount of capital

identified as required through the Bank’s ICAAP, utilising an appropriate capital stack to support its

business objectives, having identified the Bank’s material risks.

Leverage – The Bank has a low appetite for leverage ratio risk. The Board has determined that the Bank’s

balance sheet shall not be excessively leveraged, such that unintended changes to the Bank’s business

plan are required to correct balance sheet leverage.

Exposure and assessment

Capital risk exposures arise from the depletion of our capital resources and/or surplus which may

result from:

• increased RWAs

• losses

• unfavourable changes to regulatory minima or other regulatory rule changes.

Our capital risk management approach is centred around ensuring we can maintain appropriate levels

of capital to meet regulatory minima and support our strategic objectives under both normal and

stress conditions.

Capitalisation is a core component of our annual planning process, involving the creation of our budget

and Long-Term Plan. This sets our forecast of our capital position through the planning horizon and is

further assessed through our ICAAP scenarios where the scale of risks to capital is fully considered and

allows the Bank to make informed judgments on risks, the adequacy of capital carried to support them

and the overall robustness of our capital risk management approach. Management actions to preserve

capital are identified and applied, where relevant to those scenarios. Further details on this process are set

out in our viability statement on pages 46 and 47.

Capital risk is a core focus and our current and forecasted capital position is monitored in ALCO and

ExCo and reported to ROC and the Board. This involves the production of regular reports including

reporting actual and updated forecast levels of capital, which are compared to our risk appetite limits

for acceptable capitalisation.

As set out in our Operating environment on page 6, the regulatory environment in which we operate

continues to evolve. Consequently a core component of our capital risk thinking involves horizon scanning

of prudential developments, to ensure we continue to monitor potential future capital impacts and

anticipate appropriate capital resources.

Table 20: Key regulatory metrics and ratios

31 December 2024 31 December 2023

CET1 ratio 12.5% 13.1%

Tier 1 ratio 12.5% 13.1%

Total capital ratio 14.9% 15.1%

MREL ratio 23.0% 22.0%

Leverage ratio 5.6% 5.3%

Capital resources

Capital levels and forecasted capital levels are managed and monitored by the Board and its Risk

committees, via ALCO.

Following the strengthening of the Bank’s capital position at the end of the prior year, 2024 has seen

further capital optimisation actions to re-balance some of the capital ratios. The sale of a portfolio of

residential mortgages to NatWest in Q3 supported ending the year with total capital plus MREL of 23.0%

(31 December 2023: 22.0%). Although CET1 levels reduced in the short term, the transaction created

additional lending capacity to enable the Bank to continue its asset rotation and reflects the proactive

steps taken to effectively manage our capital position and support future growth.

Our capital resources position for the holding company as at 31 December 2024 is summarised below:

Table 21: Regulatory capital (audited)

31 December 2024

£’million

31 December 2023

£’million

Share capital – –

Share premium 144 144

Retained earnings 1,022 978

Other reserves 17 12

Intangible assets (126) (193)

Other regulatory adjustments

(249) 44

Total Tier 1 capital (CET1) 808 985

Debt securities (Tier 2) 150 150

Total Tier 2 capital 150 150

Total regulatory capital 958 1,135

1. Other regulatory adjustments relates to the deferred tax asset recognised in the year. See note 9 to the financial statements.

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Capital requirement

We calculate our capital requirement in line with the regulatory requirements set out in the PRA Rulebook.

This consists of a Pillar 1 calculation of RWAs and a Pillar 2A assessment that captures point in time risks

not covered by the Pillar 1 calculation. Pillar 1 capital is calculated using the standardised approach and

given the strategic pivot to commercial lending, it is not the Group’s intention to resubmit to the PRA to

switch to the advanced internal-ratings based approach (“AIRB”). The Group continuously keeps this under

review. The Pillar 2A assessment is conducted through the ICAAP process, which is documented and

approved by the Board on an annual basis and discussed with the PRA as part of the Supervisory Review

and Evaluation Process.

Table 22: Capital requirements

31 December 2024 31 December 2023

CET1 Total capital CET1 Total capital

Pillar 1 4.5% 8.0% 4.5% 8.0%

Pillar 2A 0.2% 0.4% 0.2% 0.4%

Total capital requirement 4.7% 8.4% 4.7% 8.4%

Capital conservation buffer 2.5% 2.5% 2.5% 2.5%

UK countercyclical buffer 2% 2% 2% 2%

Total (excluding PRA buffer, if applicable) 9.2% 12.9% 9.2% 12.9%

Capital landscape

Strategic pivot

The implementation of the strategic move towards corporate, commercial and SME lending, and specialist

mortgages will naturally lead to higher RWA percentages within the planning horizon. To support this, the

timing of RWA growth and profit growth may be supplemented with opportunistic capital market

transactions to help ensure capital levels remain at robust and sustainable levels.

Basel 3.1

In September 2024, the PRA published the second near-final policy statement and rules covering the

implementation of Basel 3.1 standards for credit risk, the output floor, reporting and disclosure

requirements in response to consultation paper CP16/22. The implementation of the rules have been

delayed by a year to 1 January 2027, but we continue to prepare and based on our current balance sheet

lending profile, the RWA impact has been estimated as broadly neutral.

Capital framework consultation papers

Alongside the Basel 3.1 policy statements, a number of consultation papers were also released covering

revisions to the 2A capital framework and simplifying the capital regime. We remain engaged with the

consultation process and have fed back our thoughts on whether the gap of standardised banks and IRB

model banks is sufficiently closing under current proposals.

Resolvability regime and MREL consultation

Financial institutions, with total assets greater than £15-25 billion, are subject to stringent MREL ‘bail-in’

requirements meaning that we will need to continue to hold and issue MREL eligible debt. We welcome

recent consultation papers revising this threshold up to £20-£30 billion and are actively participating in

the consultation process.

Risk-weighted assets

Our RWAs decreased over the course of 2024 to £6,442 million (31 December 2023: £7,553 million).

Table 23: RWAs

31 December 2024 31 December 2023

Exposure Risk density RWAs Exposure Risk density RWAs

Loans and advances 9,013 50% 4,529 12,297 46% 5,597

Treasury portfolio 7,301 3% 197 8,770 3% 242

Other assets 1,268 67% 845 1,181 75% 886

Total assets 17,582 32% 5,571 22,248 30% 6,725

Off-balance sheet – – 132 – – 79

Credit risk (exc. CCR) – – 5,703 – – 6,804

CCR, market risk and

operational risk – – 739 – – 729

Total RWAs 6,442 7,533

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Response

Capital risk management is focused on three key components:

• providing sustainable profits that will allow us to generate organic capital growth

• the continued optimisation of our balance sheet to both ensure we are maximising our return on

regulatory capital and managing our RWAs

• continuing to assess the raising of external debt capital, as and when market conditions and

opportunities allow.

Sustainable profit growth

The main long-term approach to management of capital is the sustainable generation of additional capital

through the accumulation of profits. The Board and ExCo are focused on ensuring the successful delivery

of sustainable profitability. Core to this is the continued delivery of our strategic priorities (as set out on

page 3).

Balance sheet optimisation

Another key mitigation used to manage capital risk is efficient deployment of our existing capital

resources. One of our strategic priorities is ensuring we continue to optimise our balance sheet to ensure

we maximise our risk-adjusted returns, whilst remaining above regulatory requirements. This approach

saw us accelerate our pivot towards commercial lending through the sale of a portfolio of residential

mortgages to enhance our capital capacity to allow growth in higher yielding assets.

Raising of additional capital

We successfully raised capital in Q4 2023 and, as we look to grow, we may from time to time look to raise

additional regulatory capital in the form of qualifying debt to support further lending growth in the areas

we wish to be competitive in. The ability to raise additional capital, as well as the associated cost, is

dependent upon market conditions and perceptions.

Monitoring/reporting

We measure our capital resources in line with regulatory requirements. The PRA expects prudential

reporting, which includes capital reporting, to be as rigorous as that for financial reporting. Over the past

few years we have invested in our regulatory reporting systems as well as made enhancements to our

control environment to ensure we are continuing to produce accurate and reliable capital reporting and

deliver against these expectations.

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Liquidity and funding risk

Risk definition

Liquidity risk is the risk that we fail to meet our obligations as they fall due. Funding risk is the risk that we

cannot fund assets that are difficult to monetise at short notice (i.e., illiquid assets) with funding that is

behaviourally or contractually long-term (i.e, stable funding).

Risk appetite statement (audited)

Liquidity – The Bank has a cautious appetite for liquidity risk. The Board has determined that the Bank

shall be able to survive a combined name-specific and market-wide liquidity stress event for at least three

months, at a level of severity determined by the Bank’s internal risk appetite stress test, utilising the Bank’s

liquidity pool, having identified the Bank’s material liquidity risks.

Funding – The Bank has a cautious appetite for funding risk. The Board has determined that the Bank shall

maintain a prudent funding profile by using stable funding to fund illiquid assets, without undue reliance on

wholesale funding markets, whilst ensuring that funding is not inappropriately concentrated by customer,

sector or term, as identified during the Bank’s liquidity stress testing.

Encumbrance – The Bank has a cautious appetite for encumbrance risk. The Board has determined that

encumbrance of its balance sheet be no greater than 30% of the Bank’s total assets in business-as-usual

conditions, and unlimited in relation to any encumbrance relating to repo or use of Bank of England

facilities in order to manage through a liquidity stress situation – and to test the adequacy of those

facilities from time to time.

Exposure and assessment

Liquidity risk concerns our ability to meet short-term obligations as they fall due. This requires liquidity

management to maintain investor and market confidence in both business-as-usual and stressed

environments. Funding risk concerns any mismatch between asset liquidity and how the assets are

funded. The primary aim is to ensure assets that are slow to monetise are supported by funding which is

behaviourally or contractually stable.

Deposits remain our primary source of balance sheet funding and subsequent source of liquidity risk as

we seek deposits that are stable and less price sensitive. The volume and type of deposit supports our

lending, with any surplus funding invested in prudent liquid assets. During 2024, we managed down

surplus levels of deposits and reduced encumbrance levels significantly through repayment of the

majority of TFSME following receipts from the proceeds of the mortgage sale.

We measure our liquidity and funding resources in line with regulatory requirements, with the key metric

for liquidity risk being the liquidity coverage ratio and for funding risk, the net stable funding ratio where

we remain well above our minimum regulatory requirements. As at 31 December 2024, our liquidity

coverage ratio was 337% (31 December 2023: 368%) and our net stable funding ratio was 169%

(31 December 2023: 146%).

In order to appropriately manage our liquidity and funding resources, we run an ILAAP exercise which

considers the risks that we are exposed to in both normal and stressed conditions. The ILAAP process also

sets appropriate limits and determines the Bank’s liquidity risk appetite, and internal liquidity stress

scenario. We produce regular reports on the current and forecasted level of liquidity, which are tracked

against limits both at the operational level in Treasury and at the Executive level at ALCO.

Response (audited)

Our liquidity and funding risk management is focused on three key components:

• we retain a deposit-funded approach, with a broad customer deposit base covering both retail and

commercial customers. This means we are not reliant on wholesale funding, although we continue to

utilise a small amount of the Bank of England’s TFSME as an additional stable source of funding

• we continue to maintain prudent liquidity levels, and access to contingent liquidity, through the holding

of high-quality liquid assets in the form of investment securities with strong credit ratings as well as

cash balances held at the Bank of England

• we monitor and manage the behavioural maturity of our assets and liabilities on an ongoing basis to

ensure we are not taking undue risk.

Deposit-funded approach

We aim to attract service-led core deposits which are less sensitive to competition within the deposit

market. At 31 December 2024, 46% of our deposits came from commercial customers (31 December

2023: 43%) with the remaining 54% (31 December 2023: 57%) coming from retail customers. Additionally,

40% of deposits at year end (31 December 2023: 36%) were in the form of current accounts, with the

remainder split between a combination of instant access and fixed-term savings products.

Liquidity management

We continue to hold a prudent level of liquidity to cover unexpected outflows, ensuring that we are able to

meet financial commitments for an extended period. We recognise the potential difficulties in monetising

certain assets, so set higher quality targets for liquid assets for the earlier part of a stress period. We have

assessed the level of liquidity necessary to cover both systemic and idiosyncratic risks and maintain an

appropriate liquidity buffer at all times. Our internal liquidity stress test ensures that we comply with our

own risk appetite as well as regulatory requirements.

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Table 24: Assets and liabilities by maturity (audited)

Table 24 sets out the maturity structure of our assets and liabilities, by their earliest possible contractual maturity date. The contractual maturity will differ from the behavioural maturity characteristics in both

normal and stressed conditions. The behavioural maturity of customer deposits is much longer than their contractual maturity. On a contractual basis, such deposits are repayable on demand or at short notice.

In reality, they are static in nature and provide long-term stable funding for our operations and liquidity. Equally, our loans and advances to customers, specifically mortgages, are lent on longer contractual terms, but

may be redeemed or re-mortgaged earlier. The total balances set out in the analysis do not reconcile with the carrying amounts as disclosed in the consolidated balance sheet. The difference arises from the maturity

analysis incorporating all the expected future cash flows (including interest), on an undiscounted basis.

31 December 2024

Group

Carrying

value

Repayable

on demand

£’million

Up to

3 months

£’million

3 to 6 months

£’million

6 to 12 months

£’million

1 to 5 years

£’million

Over 5 years

£’million

No contractual

maturity

£’million

Total

£’million

Cash and balances with the Bank of England 2,811 2,811 – – – – – – 2,811

Loans and advances to customers 9,013 – 460 422 792 4,140 10,816 464 17,094

Investment securities 4,490 – 442 409 240 3,537 132 115 4,875

Total financial assets 16,314 2,811 902 831 1,032 7,67 7 10,948 579 24,780

Other assets 1,268 – – – – – – 1,268 1,268

Total assets 17,582 2,811 902 831 1,032 7,67 7 10,948 1,847 26,048

Deposits from customers (14,458) (13,248) (340) (435) (233) (167) – (67) (14,490)

Deposits from central banks and repurchase agreements (791) – (180) (109) (78) (500) – – (867)

Debt securities (675) – – (42) (42) (906) – – (990)

Other liabilities (475) – (5) (5) (10) (90) (86) (270) (466)

Total financial liabilities (16,399) (13,248) (525) (591) (363) (1,663) (86) (337) (16,813)

Capital (1,183) – – – – – – (1,183) (1,183)

Total liabilities (17,582) (13,248) (525) (591) (363) (1,663) (86) (1,520) (17,996)

Derivative cash flows – – 2 1 2 8 – – –

Cumulative liquidity gap – (10,437) (10,058) (9,817) (9,146) (3,124) 7,7 38 – –

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Table 24: Assets and liabilities by maturity (audited) continued

31 December 2023

Group

Carrying

value £’million

Repayable

on demand

£’million

Up to

3 months

£’million

3 to 6 months

£’million

6 to 12 months

£’million

1 to 5 years

£’million

Over 5 years

£’million

No contractual

maturity

£’million

Total

£’million

Cash and balances with the Bank of England 3,891 3,891 – – – – – – 3,891

Loans and advances to customers 12,297 – 562 486 911 5,078 15,811 381 23,229

Investment securities 4,879 – 454 117 397 4,110 52 57 5,187

Total financial assets – 3,891 1,016 603 1,308 9,188 15,863 438 32,307

Other assets 1,178 – – – – – – 1,178 1,178

Total assets 22,245 3,891 1,016 603 1,308 9,188 15,863 1,616 33,485

Deposits from customers (15,623) (13,430) (391) (398) (931) (484) – (67) (15,701)

Deposits from central banks (3,050) – (39) (39) (67) (3,197) – – (3,342)

Debt securities (694) – – (35) (42) (829) (160) – (1,066)

Repurchase agreements (1,191) – (308) (512) – (424) – – (1,244)

Lease liabilities (234) – (6) (6) (11) (107) (238) – (368)

Other liabilities (319) – – – – – – (319) (319)

Total financial liabilities (21,111) (13,430) (744) (990) (1,051) (5,041) (398) (386) (22,040)

Capital (1,134) – – – – – – (1,134) (1,134)

Total liabilities (22,245) (13,430) (744) (990) (1,051) (5,041) (398) (1,520) (23,174)

Derivative cash flows – – 2 – (3) 37 1 – –

Cumulative liquidity gap – (9,539) (9,265) (9,652) (9,398) (5,214) 10,252 – –

Monitoring/reporting

We consider the effective and prudent management of liquidity to be fundamental to our ongoing resilience and viability. The Board has overall responsibility for establishing and maintaining an adequate risk

management framework, including risk appetites that enable the management of our liquidity and funding risks. We are committed to ensuring that at all times we have sufficient liquidity resources – in terms of both

quantity and quality – to ensure we can meet payments as they fall due.

The Treasury function has responsibility for our compliance with liquidity policy and strategy. We have a dedicated Prudential Risk team who independently monitor our liquidity and funding risk daily including

ensuring compliance with the policies we have developed. A Regulatory Reporting team also monitors compliance with relevant metrics.

Financial risks continued

140

Metro Bank Holdings PLC Annual Report and Accounts 2024

Market risk

Risk definition (audited)

The risk of loss arising from movements in market prices. Market risk is the risk posed to earnings, economic

value or capital that arises from changes in interest rates, market prices or foreign exchange rates.

Risk appetite statement

Our market risk appetite is determined by reference to a number of sub-risk appetites:

Earning sensitivity – We have a low appetite for earnings risk, with the Board determining a limit

calibrated to ensure net interest income does not exceed an amount recommended and scrutinised by

the ALCO and approved by ROC. The limit is calibrated using a 2% instantaneous shock in both directions.

Economic value sensitivity – We have a low appetite for economic value risk, with the Board determining

a limit calibrated to ensure that a change to the present value of our balance sheet does not exceed an

amount as recommended and scrutinised by ALCO and approved by ROC. The limit is calibrated by

calculating the impact of a 2% instantaneous shock in both directions.

Revaluation risk – We have a low appetite for revaluation risk, with the Board prescribing that we should

avoid situations where the potential losses caused by changes in market prices shall not exceed capital

held under standard risk weights, taking account of any offsets, determined by our revaluation risk

stress scenario.

Foreign exchange risk – We have no appetite for foreign exchange risk, with the Board determining that

exposures in foreign currencies should not represent a material portion of our capital resources.

Exposure and assessment (audited)

We do not have a trading book and we do not actively seek to create value through taking interest rate

positions. Whilst we support our customers to make payments or hold accounts in foreign currency, we

actively avoid exposing our own balance sheet to foreign exchange risk.

The primary source of our market risk exposure arises from structural interest rate risk in the banking

book mismatch between the fixed rate assets and liabilities and any differences in bases. Interest rate risk

in the banking book crystallises in, and is measured through, the sensitivity of our current and future net

interest income and our economic value to movements in market interest rates. During 2024, we saw a

reduction in the interest rate environment and the Bank remained within approved limits throughout.

The Board is responsible for setting market risk appetite. Market risk is mitigated through a risk

management framework that allows it to be monitored and managed by first line management and

second line risk, with oversight from ALCO. Accordingly, ALCO ensures that steps taken to identify,

measure, monitor and control the interest rate risk in the banking book are consistent with the approved

strategies and policies.

Management limits are set at ALCO for economic value and net interest income sensitivity to ensure

prompt action and escalation. Limits and the relevant metrics are also reported to ROC and the Board.

The Treasury function has responsibility for managing within our market risk policy and strategy. We have

an independent second line Prudential Risk team who independently monitor our market risk daily

including ensuring compliance with the policies we have developed. The Prudential Risk team runs

additional interest rate risk simulations monthly to assess other threats that may not be evident in the

standard parallel shock metrics or supervisory outlier tests.

Response (audited)

We are not a trading bank and so have a low appetite for those market risks which we do take, with clear

limits set for net interest income and economic value sensitivity. These limits are sufficient to allow

efficient operational management of financial hedging.

Interest rate risk

We benefit from natural offsetting between certain assets and liabilities, which may be based on both the

contractual and behavioural characteristics of these positions. Where natural hedging is insufficient, we

hedge net interest rate risk exposures appropriately, including, where necessary, with the use of

derivatives. We enter into derivatives only for hedging purposes and not as part of customer transactions

or for speculative purposes.

Our Treasury and Prudential Risk teams work closely together to ensure that risks are identified and

managed appropriately and that we are well-positioned to avoid losses outside our appetite, in the event

of unexpected market moves.

Foreign exchange exposure

We have very limited exposure to foreign exchange risk. Foreign currency denominated assets and

liabilities are matched off closely in each of the currencies we operate, and we eliminate our foreign

exchange exposure as far as is practical on a daily basis. In any event the risk is strictly capped at 2% of our

capital base. We offer business current accounts in foreign currency and foreign exchange facilities to

facilitate customer requirements only.

Monitoring/reporting

We measure interest rate risk exposure using methods including the following:

• interest rate gaps: calculating the net difference between total assets and total liabilities across a range

of time buckets

• economic value sensitivity: calculating repricing mismatches across our assets and liabilities over the

horizon of our balance sheet and then evaluating the change in value arising from an instantaneous 2%

change in the yield curve in both directions, taking into consideration any embedded customer

optionality. Our economic value sensitivity risk appetite scenario is based on an instantaneous parallel

rate movement of 2% at all repricing maturities, which is widely considered severe but plausible.

Additionally, we evaluate the PRA’s outlier test in line with regulatory requirements

• net interest income sensitivity: calculating repricing mismatches across our assets and liabilities over a

one-year horizon and then evaluating the change in net income arising from an instantaneous 2%

change in the yield curve in both directions. Our net interest income risk appetite scenario is based on

an instantaneous parallel rate movement of 2% at all repricing dates, which is widely considered severe

but plausible. We also assess basis risk by considering divergences between the Bank of England base

rate and the Sterling Overnight Index Average. (SONIA.).

Financial risks continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Financial risks continued

Interest rate risk

Table 25 sets out the interest rate risk repricing gaps of our balance sheet in the specified time buckets, indicating how much of each type of asset and liability reprices in the indicated periods, after applying expected

pre-repayments in line with our policy.

A positive interest rate sensitivity gap exists when more assets than liabilities reprice during a given period. A positive gap tends to benefit net interest income in an environment where interest rates are rising;

however, the actual effect will depend on multiple factors, including actual repayment dates and interest rate sensitivities within the periods. The converse is true for a negative interest rate sensitivity gap.

Table 25: Behavioural repricing balance sheet

31 December 2024

Up to

3 months

£’million

3 to 6 months

£’million

6 to 12 months

£’million

1 to 5 years

£’million

Over 5 years

£’million

Non-interest

bearing

£’million

Total

£’million

Cash and balances at central banks 2,750 – – – – 61 2,811

Loans and advances to customers 3,407 502 1,053 4,006 44 1 9,013

Investment securities (AC & FVOCI) 1,861 320 130 2,070 109 – 4,490

Other assets – – – – – 1,268 1,268

Total assets 8,018 822 1,183 6,076 153 1,330 17,582

Deposits from customers (7,4 49) (1,017) (807) (5,185) – – (14,458)

Deposits from BoE and Repos (791) – – – – – (791)

Debt – – – (675) – – (675)

Other liabilities – – – – – (475) (475)

Shareholders’ funds (13) (13) (27) (214) – (916) (1,183)

Total liabilities (8,253) (1,030) (834) (6,074) – (1,391) (17,582)

Interest rate derivatives (123) (150) (50) 373 (50) – –

Interest rate sensitivity gap (358) (358) 299 375 103 (61) –

Cumulative gap (358) (716) (417) (42) 61 – –

142

Metro Bank Holdings PLC Annual Report and Accounts 2024

Financial risks continued

Table 25: Behavioural repricing balance sheet continued

31 December 2023

Up to

3 months

£’million

3 to 6 months

£’million

6 to 12 months

£’million

1 to 5 years

£’million

Over 5 years

£’million

Non-interest

bearing

£’million

Total

£’million

Cash and balances at central banks 3,817 – – – – 74 3,891

Loans and advances to customers 3,803 860 1,499 6,063 71 1 12,297

Investment securities (AC & FVOCI) 2,029 3 154 2,642 51 – 4,879

Other assets – – – – – 1,178 1,178

Total assets 9,649 863 1,653 8,705 122 1,253 22,245

Deposits from customers (6,829) (734) (1,607) (5,897) (556) – (15,623)

Deposits from BoE and Repos (4,241) – – – – – (4,241)

Debt – – – (544) (150) – (694)

Other liabilities – – – – – (553) (553)

Shareholders’ funds (24) (23) (47) (374) – (667) (1,134)

Total liabilities (11,070) (757) (1,654) (6,815) (706) (1,220) (22,245)

Interest rate derivatives (145) (2) – (3) 150 – –

Interest rate sensitivity gap (1,589) 104 – 1,887 (434) 33 –

Cumulative gap (1,589) (1,485) (1,486) 401 (33) – (4,192)

The below shows the sensitivity arising from the regulatory scenario of a +200bps and -200bps parallel interest rate shock for a one-year forecasting period upon projected net interest income.

Table 26: NII sensitivity (audited)

200bps increase

£’million

200bps decrease

£’million

At 31 December 2024 19.3 (19.9)

At 31 December 2023 (13.8) 14.3

There is no material difference between the interest rate risk profile for the Group and that for the Company.

143Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Financial crime risk

Risk definition

Financial crime risk is the risk that the Bank’s products and service offerings will be used to facilitate

financial crime. Financial crime risks include money laundering, violations of sanctions, bribery and

corruption, facilitation of tax evasion, proliferation financing and terrorist financing.

Risk appetite statement

We have a low appetite for customer relationships or activity that pose a high financial crime risk and have

no appetite for customer relationships or activity that violate our sanctions obligations. The nature of our

business model as a UK retail bank inherently exposes us to financial crime risk and as a result of this

exposure, strong and effective controls are required to mitigate this. We have defined a set of quantitative

and qualitative key risk appetite metrics against which we monitor performance. We do not accept

customers outside of our financial crime risk appetite and likewise where customers are reassessed and

found to be outside of appetite (i.e, where the risks are too great to manage effectively) they are exited.

Exposure and assessment

Failure to prevent financial crime may result in harm to our customers, the Bank and third parties. In

addition, non-compliance with regulatory and legal requirements may result in enforcement action which

will have an adverse effect on the Bank from a financial and reputational perspective.

Our overall inherent financial crime risk remains the same as last year and continues to be medium based on

our annual risk assessment (money laundering and proliferation/terrorist financing, tax evasion facilitation and

sanctions inherent risks are rated medium, bribery and corruption inherent risk is rated low).

Response

We continue to deliver enhancements to our financial crime control framework to ensure that it remains fit for

purpose, identifying and mitigating financial crime risk as well as delivering our financial crime strategy.

Investment in our systems and controls

We delivered strategic enhancements to our financial crime systems throughout 2024 with equal focus

on embedding previously implemented controls, as well as strengthening our control framework.

Horizon scanning

We identify emerging trends and typologies through conducting horizon scanning activity, through

information obtained from investigative and intelligence teams and through attending key industry forums

(or associations) such as those hosted by UK Finance. As required, we continue to update our control

framework to ensure emerging risks are identified and mitigated.

Colleague awareness and training

Colleague awareness and training continues to be a significant focus to ensure our Financial Crime

Framework is implemented effectively. All colleagues have a key role to play in the detection and

management of financial crime risk. To this extent, all colleagues receive financial crime training, ensuring

they are able to meet their personal obligations as well performing effectively in role. For colleagues in

specialist financial crime roles, we invest in their development to improve capabilities through industry-

recognised financial crime qualifications.

Sanctions compliance

We comply with all applicable sanctions regimes. We continue to invest in our sanctions control

framework and keep under review the effectiveness of controls we have in place in order to ensure that

sanctions risk is managed in line with risk appetite. We will not tolerate any deliberate breach of financial

crime laws and regulations (including sanctions) that apply to our business and the activity we undertake.

Anti-money laundering and combating terrorist financing prevention

We comply with all relevant UK anti-money laundering and combating terrorist financing legislation and

have a framework in place to support the implementation and ongoing monitoring of these requirements

into our systems and controls.

Anti-bribery and corruption and anti-tax evasion compliance

We are committed to acting professionally, fairly and with integrity in all our business dealings and

relationships and comply fully with the UK Bribery Act 2010 and Criminal Finances Act 2017. We do not give or

receive improper financial or other benefits in our business operations, nor do we help facilitate tax evasion.

Monitoring/reporting

We monitor compliance with policies and standards through a range of activities completed by specialist

colleagues. These include quality checking and assurance within operational and first line risk teams,

supported by assurance and internal audit reviews of key financial crime controls carried out by second

and third line of defence teams. The results of these reviews and the status of follow-up actions are

escalated through our governance bodies.

Our financial crime risk appetite is reflected in key risk appetite metrics – a set of quantitative metrics,

reported monthly through our governance. Where control performance is assessed as outside of our risk

appetite, the issue and remediation activity is escalated and tracked through our risk committees.

Future focus

We are committed to safeguarding the Bank and our customers from financial crime. On 12 November

2024, Metro Bank PLC resolved the FCA’s enquiries into transaction monitoring systems and controls that

were in place between 2016 and 2020. The FCA’s enquiries have concluded, resulting in the imposition of

a financial penalty of approximately £16.7 million relating to historic deficiencies in the Bank’s transaction

monitoring systems and controls. The Bank engaged and cooperated fully with the FCA’s enquiries and

accepted the findings. For 2025, management of financial crime risk remains a priority and the Bank is

making further enhancements to its control framework to improve alignment to regulatory requirements.

The Bank will continue to actively engage with the FCA as part of their ongoing supervision of our systems

and controls.

Non-financial risks

Non-financial risk covers the remaining categories of risk which

have the potential to impact the Bank’s operations, service quality

and ability to operate in a safe and compliant way. Non-financial

risks include financial crime risk, operational risk, conduct risk,

regulatory risk, legal risk, model risk and strategic risk.

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Operational risk

Risk definition

The risk that events arising from inadequate or failed internal processes, people and systems, or from

external events cause regulatory censure, reputational damage, financial loss, service disruption and/or

detriment to our FANS.

Risk appetite statement

We maintain a cautious appetite for operational risk and aim to minimise incidents, losses and adverse

customer impacts arising from operational risk issues. We do this by maintaining a resilient infrastructure,

including robust systems, employing and training the right colleagues, minimising the impact of external

events and having a framework in place to ensure that operational risks are identified, assessed,

responded to and monitored. Operational risk events and losses are recorded and assessed, corrective

actions completed and steps taken to avoid recurrence.

Exposure and assessment

We operate with both a physical and a digital presence and are exposed to a broad range of operational

risks across our distribution channels, businesses and functions. Operational incidents and other risk

events have the potential to cause service disruption and outages, impacting internal processes and

customers, as well as leading to financial losses.

Operational risks arise from day-to-day business activities and the Bank’s operational resilience is an

outcome that we actively monitor and oversee, including through the identification of important business

services and setting of impact tolerances. Testing of our resilience capabilities is an established and

coordinated activity and the identification and mitigation of potential resilience gaps an integrated

practice of our business teams.

Whilst we have seen localised operational pressure associated with the Bank’s strategic transformation

activities, enhanced programme level operational monitoring has ensured risk impacts have been

managed within appetite and timely mitigating steps taken. There has been minimal change-related

disruption and customer service levels have been maintained. Comprehensive risk assessments have

been completed for our strategic collaboration with Infosys, including establishing our continued

operational resilience through the lens of PRA Supervisory Standard 2/21 Outsourcing and third-party

risk management.

Response

Our Operational Risk Management Framework sets the approach we take to the management of

operational risks including the performance of Risk and Control Self-Assessments, consideration of a

variety of disruption scenarios and recording and management of incidents and resultant operational risk

losses. Operational risk is overseen by the Chief Risk Officer and teams in the first and second lines of

defence, monitored via reporting to Business Risk Committees, the Non-Financial Risk Oversight

Committee run by the second line, ERC and ROC.

We aim to minimise incidents and losses arising from operational risk events by maintaining a resilient

infrastructure, including robust systems and employing and training the right colleagues. We consider and

prepare for a range of potential disruption events and if they do occur, we respond effectively and ensure

that operational risk incidents and losses are recorded and assessed, and corrective steps taken to avoid

recurrence. In accordance with regulatory requirements, we hold capital appropriate to potential severe

yet plausible operational risk exposures, informed by an assessment of a range of operational risk

scenarios.

We have put in place detailed policies, standards and controls to mitigate the variety of operational risks to

which we are exposed. These are designed to both minimise impacts suffered in the normal course of

business (expected losses) and to avoid or reduce the likelihood of suffering a large extreme (or

unexpected) loss.

Fraud

We continue to operate in a heightened fraud threat landscape. Scam and unauthorised plastic fraud risk

remains elevated, reflected in increased fraud losses this year. Mitigating this risk is a strategic priority

with the safety and security of our customers and their money of the highest importance. The Bank

deploys a range of preventative and detective measures to mitigate the rapidly evolving threats and has

continued to invest in fraud controls, preparing for and abiding by the recently introduced mandatory

reimbursement requirements for authorised push payment (APP) fraud claims. Fraud threats and

prevention trends are shared with industry peers and we closely monitor the treatment and outcomes of

customers that fall victims of fraud in line with our Consumer Duty obligations.

Information security and cyber

The threat of a successful cyber attack and its potential to disrupt business operations and customer

access to services remains high. We have dedicated capability in place to identify, assess and respond to

the dynamic threats faced and continue to invest in our security infrastructure including endpoint

detection and response capabilities, vulnerability scanning and identity management and intrusion

detection tooling. A comprehensive suite of risk and performance metrics are in place to continuously

monitor our security posture, protect customer data and minimise the risk of disruption.

Technology

Our key technology capabilities underpin the Bank’s customer service proposition and operational

resilience. Maintaining technology availability and performance is a key priority and we follow well

established processes for assessing and prioritising investment to ensure the technology estate remains

fit for purpose. Risk and performance reviews of our material third-party technology providers are

performed and this year focus has been placed on identifying opportunities to establish a flexible and

scalable technology infrastructure fit for the future. The Bank’s strategic collaboration with Infosys is a key

enabler both of our growth objectives and ongoing resilience and we continue to keep an open dialogue

with our regulators on our technology plans.

Non-financial risks continued

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Data

The effective use and maintenance of our data underpins the success of our strategy as well as our ability

to deliver good customer outcomes. Through our data management, data protection and security policies

we seek to protect customer data, satisfy legal and regulatory requirements concerning the creation,

storage, distribution, usage and deletion of data and manage ongoing data quality. Roles and

responsibilities for data ownership are defined, activities to identify and manage our key data are ongoing

and we prioritise and remediate the data issues we identify.

Third-party

We make use of a network of third parties that underpin many of our operational processes and customer

service offering. Our procurement and supplier risk policy sets out our approach to managing our third

parties and we undertake robust risk assessments in line with regulatory expectations for each of our

material outsourcing relationships. These consider our ongoing resilience position and potential impacts

on our important business services with the Bank maintaining and testing exit plans to safeguard our

operational continuity.

Our Supplier Risk team provides ongoing oversight and monitoring of our material third parties in line with

regulatory requirements and undertakes independent assurance as required. This year, these activities

have been completed for our strategic collaboration with Infosys, with changes to the Bank’s risk

exposures identified, assessed and responded to. This partnership is expected to further strengthen

the Bank’s resilience and our regulators have been kept up to date throughout.

People

Our people are central to our relationship banking strategy, meeting and exceeding customer

expectations by living our AMAZEING values. Our dedicated People team provides business support in

resource management, talent identification and training and the Bank has continued to actively manage its

resource mix to ensure we have the right colleagues and capabilities, in the right place, at the right time.

Where transformation activity has reshaped the workforce, risks have been carefully considered and

support made available to manage the impacts on colleague wellbeing and sentiment.

Monitoring/reporting

Material operational risk events are identified, reviewed and escalated in line with criteria set out in the

Enterprise and Operational Risk Management Frameworks. Incidents and losses are recorded and

root-cause analysis is undertaken with action plans implemented to prevent recurrence and continually

improve our processes. Quantitative metrics are used to measure our material operational risks and

assess our exposure against our stated risk appetite. We conduct regular operational risk scenario

workshops to identify severe yet plausible events which could impact us. This enables us to quantify

the potential losses that such events could cause and hold sufficient capital against them, as well as

highlighting potential areas for ongoing enhancements to our operational risk capabilities.

Business Risk Committees manage operational risks at business area level, supported by forums and

working groups. Key risk indicators are in place to monitor our operational risk exposures against stated

risk appetite and these are reported to the Non-Financial Risk Oversight Committee which further

escalates to ERC and ROC where appropriate.

Future focus

Our operational risk profile will remain under close review as the Bank implements its strategy, with

particular focus on management of risks associated with change delivery and increased dependence

on our key third-party relationships. The fraud threat landscape is expected to remain elevated and

investment in the Bank’s defences will continue. Transformation of our operational activities and

technology estate including focus on greater automation will require careful navigation in the context

of our risk appetite as we work to unlock the anticipated benefits.

Non-financial risks continued

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Non-financial risks continued

Conduct risk

Risk definition

The risk that our behaviours or actions result in poor outcomes or detriment to customers and/or

undermine market integrity.

Risk appetite statement

We are built around a culture of supporting our customers, offering them a range of relatively simple

retail products. We have a low appetite for conduct risk and seek to minimise risks which may result in

poor outcomes or lead to customer detriment. Where poor outcomes are identified they must be

remediated effectively to minimise risk, prevent recurrence, reduce customer harm, and reasonably

avoid foreseeable harm.

Exposure and assessment

Conduct risk results from the provision of services and products to customers during our normal

day-to-day business activities. We are focused on satisfying the requirements of the Consumer Duty,

which sets the high expected standard for conduct and the delivery of good customer outcomes. These

standards are aligned to our strategic objective to empower colleagues and customers with a human

approach to banking and we recognise the important role we play in supporting our customers as

expectations and behaviours evolve alongside the external environment and economic conditions.

We place particular focus on supporting those customers with additional needs who may be increasingly

vulnerable following specific life events, or facing financial difficulties due to the cost-of-living pressures,

or who may be the victim of fraudulent activity.

Response

Conduct risk is considered by all three lines of defence as part of their risk management, oversight and

ongoing assurance activities.

Our Conduct Risk Framework (with supporting policies and standards) sets out our Conduct Risk Appetite

Statement, key regulatory requirements, principles and expectations, approach to risk identification,

response and governance. Throughout the course of 2024 we have:

• designed and implemented new dashboards and reporting on customer outcomes, providing regular

management information to ERC, ROC and the Board

• reported and overseen conduct risks and issues in business risk and oversight risk committees,

including progress against key customer remediation projects, conduct-related regulatory change

initiatives, complaints, vulnerable customers and arrears management

• maintained proactive and coordinated engagement with our regulators on key customer initiatives

• considered customer profiles, target markets, fair value, customer needs and vulnerability in the context

of product and proposition development, ongoing review, and associated appropriate governance

• operated programmes of quality assurance and review to assess delivery of good customer outcomes,

supported and embedded through training.

Monitoring/reporting

Conduct risk is measured on a quantitative and qualitative basis, which includes a progress review of top

risks and issues under management against key conduct priorities set by the regulators, as well as a

defined set of Board-approved risk appetite metrics relating to complaints, arrears management, product

performance, colleague training and customer outcome delivery.

A clear governance structure is in place which enables escalation of conduct risks through to ERC, ROC

and the Board which, in turn, monitor and oversee our performance against risk appetite. We periodically

report on key conduct themes including regular updates on the ways we are meeting the requirements of

the Consumer Duty.

Future focus

We will ensure our products and services meet customer expectations and continue to deliver good

outcomes, enabling customers to achieve their financial goals. Our internal processes will continue to be

regularly reviewed in response to regulatory or organisational changes, including changes associated with

our strategic third-party relationships. Ensuring we meet our regulatory requirements and reasonably

prevent actual or foreseeable customer harm will remain a top risk priority for all colleagues.

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Regulatory risk

Risk definition

The risk of regulatory sanction, financial loss and reputational damage as a result of failing to comply with

relevant regulatory requirements.

Risk appetite statement

We have a low appetite for regulatory risk and seek to minimise this risk by maintaining robust systems

and controls that are designed to meet existing regulatory requirements and to ensure we comply with

future changes to the regulatory landscape.

Exposure and assessment

We are exposed to regulatory risk arising from our normal day-to-day business activities, as well as

significant ongoing and new regulatory changes. Consumer and regulatory expectations are high

and the regulatory environment is quickly evolving including in response to external factors such as

macroeconomic conditions, geopolitical change and technological advances.

Response

We manage regulatory risk through a combination of clearly defined risk frameworks covering our

principal risks, and a comprehensive set of risk appetite measures and limits, together with appropriate

compliance policies and standards. We operate a risk-based assurance programme designed to assess

areas of the control framework underpinning regulatory compliance, oversight of key regulatory

developments and proactive and coordinated engagement with our key regulators.

We invest in and develop our core systems and controls to continue meeting existing regulatory

requirements and prepare for those that are new. Key areas of focus in 2024 included:

• capital

• financial crime and fraud

• outsourcing and third-party management

• operational resilience

• Consumer Duty.

Monitoring/reporting

Regulatory risk is measured on a quantitative and qualitative basis, which includes review of top risks and

issues under management against material regulatory initiatives and our relationship with our regulators,

as well as a defined set of Board-approved risk appetite metrics relating to our principal risks. This

includes measures around major/critical regulatory, financial crime and operational impacts, impairment

provisioning, credit, model and capital risk exposure, regulatory breaches, high risk assurance and audit

findings, incidents and implementation of material regulatory change.

We undertake ongoing horizon scanning to identify and address upcoming regulatory change. As part of

this process, we engage proactively with our regulatory authorities as well as industry bodies in respect of

any proposed changes. Additionally, a clear governance structure is in place which enables escalation of

regulatory risks through to ERC, ROC and the Board who, in turn, monitor and oversee our performance

against risk appetite. We periodically report on regulatory themes and key focus areas aligned to the

regulator’s strategic priorities, regulatory changes on the horizon and other developments in the

regulatory environment.

Future focus

We continue to place significant focus on overseeing and ensuring compliance with regulatory

requirements. We will proactively engage with our regulators, industry bodies and other stakeholders to

help shape the regulatory agenda, provide feedback on proposed reforms and continue to advocate for

proportionate and pragmatic regulations that support both innovation and growth, whilst protecting the

integrity of the financial system. We will review our risk frameworks, appetite limits and monitoring

processes to ensure that these remain up to date and reflect current regulatory priorities.

Non-financial risks continued

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Legal risk

Risk definition

The risk of loss, including to reputation, that can result from lack of awareness or misunderstanding of,

ambiguity in or reckless indifference to, the way the law applies to the Directors, the business, and its

relationships, processes, products and services.

Risk appetite statement

We have a low appetite for legal risk, limited to those events where there is a minimal chance of material

financial, reputational or commercial negative consequences.

Assessment and exposure

We are exposed to a range of legal risks in relation to our normal business activities. These risks may

arise from:

• defective contracts

• claims and litigation against us

• failure or inability to take appropriate measures to protect intellectual property

• failure to comply with specific legislation (e.g., Market Abuse).

Given the pervasive and fundamental nature of legal risk, rather than having a separate framework, the

methodology for the robust management of legal risk is set out in the Enterprise Risk Management

Framework with reporting to ERC and ROC.

Response

We minimise legal risk via a range of mitigants, including:

• in-house legal expertise, maintained via appropriate training and development and specialist

recruitment

• selective use of expert external legal advice via an approved panel of lawyers

• appropriate policy documentation and training related to specific legal requirements

• monthly reporting of metrics to measure compliance with our legal risk appetite.

Monitoring/reporting

A range of key risk indicators are used to measure our exposure to legal risk, including the risk of defective

contracts and claims made against us. Details of our material legal, taxation and regulatory matters can be

found in note 32 to the financial statements on page 206.

Future focus

We will continue to ensure that we work within legal parameters for all aspects of our activities and

measure performance against risk appetite. Legal risk exposures and response will continue to be

reported to ERC and ROC on a regular basis.

Model risk

Risk definition

The risk of potential loss and regulatory non-compliance resulting from decisions that could be principally

based on the output of models, due to errors in the development, implementation, or use of such models.

Risk appetite statement

We adopt a cautious appetite for risk due to errors in the development, implementation or use of models,

which we mitigate via effective governance over the specification and design, implementation and running

of our models and over model input data.

Assessment and exposure

We use models to support a broad range of business and risk management activities, including informing

business decisions and strategies, measuring and mitigating risk, valuing exposures (including the

calculation of impairment), conducting stress testing, and assessing capital adequacy.

Model risk is assessed via our Model Risk Index and underlying key risk indicators, which include

monitoring of the materiality and complexity of our models.

Model risk remains stable, whilst closely managed, with ongoing enhancements to risk governance, risk

appetite metrics and scope having been implemented. This has, in turn, helped to mitigate potential

increased risk from the impacts and uncertainties arising from macroeconomic challenges.

Response

The main mitigant to model risk is the robust governance process, including the Model Risk Committee.

Internal SME panels may also be convened to opine on contentious issues. The committee monitors the

effectiveness of the Model Risk Management Framework. This includes a review of findings in relation to

specific modelling processes, escalating to ERC and ROC as appropriate.

We have in place a well-qualified independent model validation function that performs model validations

prior to model implementation, when a model is changed and on a periodic basis.

Monitoring/reporting

Our Model Risk Management Framework sets out the roles and responsibilities of the various

stakeholders, underpinned by robust governance of model risk supported by model development,

monitoring, validation, implementation and risk appetite standards.

Exposure against the key risk indicators is reported to MRC, ERC and ROC on a monthly basis and periodic,

more detailed assessments are also reported through the risk governance structure.

Future focus

We continue to enhance and evolve governance of model risk. Whilst we are a standardised bank and do

not need to comply by the regulatory deadline, we are working towards complying with the principles of

the Bank of England Supervisory Statement SS1/23 ‘Model risk management principles for banks’.

Non-financial risks continued

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Strategic risk

Risk definition

The risk of having an insufficiently defined, flawed or poorly implemented strategy, a strategy that does

not adapt to political, environmental, business and other developments and/or a strategy that does not

meet the requirements and expectations of our stakeholders.

Risk appetite statement

We have not set a separate risk appetite for strategic risk and instead monitor it via the full range of

reporting under our governance structure and direct risk input into the formulation of our strategy and

Long-Term Plan, including providing a risk review to support Board approval.

Assessment and exposure

2024 was a pivotal year of transformation which has seen the Bank’s strategic focus shift towards

corporate, commercial and SME lending and specialist mortgages. We are confident that delivery of the

strategy lays the foundations for long term growth but recognise that its success is dependent on our

effective execution. Volatility in the external environment, the challenge of safely exploiting opportunities

for efficiency and the potential impact of negative external sentiment are all recognised as having the

potential to push us off course.

We have progressed a programme of organisational change including establishing a strategic

collaboration with Infosys designed to unlock both cost and revenue opportunities. Whilst the changes

have introduced new or updated existing risks, measures taken have ensured these have been managed

within our risk appetite.

The Bank has been subject to heightened external media coverage, with elevated reputational risk

exposure closely monitored throughout the year. As coverage and sentiment has normalised, this risk

has stabilised.

Response

Strategic risk is considered in everything we do, as having a clear and successful strategy is key to the

Bank achieving its goals. The Board completes an annual review of the strategy and Long-Term Plan,

supported by a risk assessment reviewed at ROC.

During 2024, our focus has been on safely executing the Bank’s strategic transformation programme.

Cost management discipline has continued in all areas, process optimisation and reprioritisation has

progressed in line with our updated strategic objectives and we have ensured the Bank’s reshaped

workforce remains effectively deployed.

Monitoring/reporting

The Executive team and Board monitor strategy execution risks closely across all business lines and

transformation initiatives.

We consider strategic risk when applying the Risk Management Framework, with ExCo oversight of

execution, challenge by the second line of defence and independent review by our Internal Audit function.

The emerging, including strategic, risks the Bank faces are assessed on at least a six-monthly basis.

This includes the governance of ESG-related matters, ongoing assessment of the geopolitical and

macroeconomic landscape in which we operate and our success in relation to our competitors.

Future focus

Our established Risk Management Framework is applied to oversee the Bank’s evolving risk profile and we

will act to ensure we operate inside our agreed risk appetite. The Bank also continues to conduct horizon

scanning against emerging risks with the potential for a severe impact and will adjust its approach

accordingly.

Non-financial risks continued

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In this section

152 Independent auditors’ report to the members of

Metro Bank Holdings PLC

160 Consolidated statement of comprehensive income

161 Consolidated balance sheet

162 Consolidated statement of changes in equity

163 Consolidated cash flow statements

164 Notes to the consolidated financial statements

211 Company balance sheet

212 Company statement of changes in equity

213 Company cash flow statements

214 Notes to the company financial statements

Financial

statements

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Independent auditors’ report

to the members of Metro Bank Holdings PLC

Report on the audit of the financial statements

Opinion

In our opinion, Metro Bank Holdings PLC’s group financial statements and company financial statements

(the “financial statements”):

• give a true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2024

and of the group’s profit and the group’s and company’s cash flows for the year then ended;

• have been properly prepared in accordance with UK-adopted international accounting standards as

applied in accordance with the provisions of the Companies Act 2006; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts (the “Annual

Report”), which comprise: the Consolidated and Company balance sheets as at 31 December 2024; the

Consolidated statement of comprehensive income; the Consolidated and Company statements of

changes in equity; the Consolidated and Company cash flow statements for the year then ended; and the

notes to the financial statements, which include a description of the significant accounting policies.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and

applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities

for the audit of the financial statements section of our report. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to

our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to

listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with

these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical

Standard were not provided.

Other than those disclosed in note 8, we have provided no non-audit services to the company in the

period under audit.

Our audit approach

Overview

Audit scope

• The scope of our audit and the nature, timing and extent of audit procedures performed were

determined by our risk assessment, the size and risk profile of reporting units, and other qualitative

factors (including history of misstatement through fraud or error).

• As part of the group audit, we identified four significant components. We conducted full scope audit

procedures on Metro Bank Holdings PLC (the company) and Metro Bank PLC, taking into account their

respective size and risk characteristics. Additionally, we executed targeted audit procedures on loans

and advances in SME Asset Finance Limited and SME Invoice Finance Limited.

Key audit matters

• Determination of allowance for ECL on loans and advances to customers (group)

• Recognition of a deferred tax asset (group)

• Carrying values of non-financial assets (group)

• Carrying value of investment in subsidiary (parent)

Materiality

• Overall group materiality: £11.4m (2023: £11.4m) based on approximately 1% of Total Equity.

• Overall company materiality: £10.0m (2023: £10.0m) based on 0.9% of Total Equity (2023: 1%).

• Performance materiality: £8.5m (2023: £8.5m) (group) and £7.5m (2023: £7.5m) (company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement

in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in

the audit of the financial statements of the current period and include the most significant assessed risks of

material misstatement (whether or not due to fraud) identified by the auditors, including those which had the

greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts

of the engagement team. These matters, and any comments we make on the results of our procedures

thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our

opinion thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Recognition of a deferred tax asset is a new key audit matter this year. Otherwise, the key audit matters below

are consistent with last year.

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Independent auditors’ report continued

Key audit matter How our audit addressed the key audit matter

Determination of allowance for Expected Credit Losses on loans and advances

to customers (group)

Refer to page 66 (Audit Committee report), Note 12: Loans and advances to customers and

Note 30: Expected credit losses.

The determination of the allowance for expected credit losses (ECL) involves management

judgement and is subject to a high degree of estimation uncertainty. We performed a

risk assessment to identify those assumptions with significant levels of management

judgement and for which variations had the most material impact on ECL.

In 2024, the level of estimation uncertainty and judgement remained elevated as the UK

experienced weak economic growth, continued economic uncertainty and high interest

rates. Assumptions were made by management in determining economic scenarios and

their probability weightings based on information provided by a third party expert.

Management determines the amount of ECL using a number of complex models. In

addition, a number of post model overlays are required where the models do not capture

all relevant risks. The overlays included adjustments in relation to the impact of interest

rates on customer affordability and commercial borrowers which was determined either

not to be fully reflected in the economic forecasts or where the modelled output did not

fully reflect the impact on credit risk.

Across the in-scope portfolios, we identified heightened audit risk in determining the ECL

for the following: Retail Mortgages, Consumer unsecured (specifically for RateSetter loans)

and Commercial (excluding the small asset finance and invoice finance portfolios, and

government backed loans).

Our work focused on the following key assumptions and judgements:

• Forward-looking economic assumptions used in the models, and the weightings

selected by management;

• Judgements involved in creating post model overlays to change modelled outputs and

the application of those adjustments in response to heightened economic uncertainty

and higher interest rates;

• Judgements exercised in determining whether a significant increase in credit risk

(‘SICR’) should be recognised for Commercial loans where staging is based on a

qualitative assessment of credit risk; and

• Judgements applied by management in estimating stage 3 individual impairment

allowances, specifically in relation to the valuation of collateral.

We evaluated the design and implementation of key controls but did not test the operating effectiveness of controls as we did not

plan to rely on them. We performed a fully substantive audit.

We engaged the support of our credit modelling specialists and performed the following substantive audit procedures in order to

assess the performance, methodology and accuracy of the ECL models. We also assessed the appropriateness of management’s

key judgements and assumptions in the context of the current economic environment and our wider industry experience.

Forward looking information and multiple economic scenarios

We used our economic analysis tool developed by our economic and modelling experts utilising data from the Bank of England and

independent consensus forecasts. This tool assessed the reasonableness of management’s economic scenarios and associated

weightings, giving specific consideration to the current economic environment and severity of forward looking information.

We also evaluated the competence, capabilities and objectivity and the work performed by management’s third party expert.

Model methodology and post model overlays

We critically assessed the methodology used in the in-scope impairment models and evaluated compliance with IFRS 9

requirements. We also tested the key assumptions and judgements which comprise the PDs/LGDs/EADs used in the calculation of

provisions.

We tested the input of certain data elements into impairment models and management judgemental adjustments, including credit

reviews that determine credit risk ratings for commercial customers. Our credit modelling specialists independently rebuilt the

commercial loans, retail mortgages and the RateSetter ECL models. This was performed using management’s methodology

and we compared the output to management’s modelled ECL output. For the other in-scope portfolios our modelling specialists

performed an independent code review to validate that the models were implemented in line with the group’s methodology. Our

credit modelling specialists also assessed the results of model monitoring performed by management and independently re-

performed the key tests.

We critically assessed and tested the judgemental post model overlays applied by management to address the credit risk in the

portfolio that was not reflected in modelled outputs. We evaluated and challenged the methodologies, the accuracy of application

and the completeness of overlays. Where appropriate, we ran a series of independent scenarios based on alternative assumptions

and compared the results to the ECL results produced by management.

Significant increase in credit risk (SICR) – Commercial loans

To test the judgements in determining whether SICR events have occurred, we evaluated the appropriateness of the SICR

criteria being used. For a sample of loans across the Commercial stage 1 and 2 populations we independently assessed the stage

allocation against SICR criteria.

Individually assessed stage 3 loans

For a sample of stage 3 credit impaired loans, we critically evaluated the basis on which the allowance was determined, and the

evidence supporting the analysis performed by management. We also independently challenged whether the key assumptions

used, such as the recovery strategies and collateral valuations, and ranges of potential outcomes, were appropriate given the

borrowers’ circumstances.

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Independent auditors’ report continued

Key audit matter How our audit addressed the key audit matter

Carrying values of non-financial assets (group)

Refer to page 66 (Audit Committee report), Note 14: Property, Plant and Equipment and

Note 15: Intangible assets.

The group’s tangible fixed assets comprised leasehold improvements and Right of

Use assets. The group also capitalised as intangible assets certain expenditure in the

development of software to support its business strategy. The market value of the

group and the 2024 operating performance of the bank indicated that the assets might

be impaired.

Management evaluated the above non-financial assets for impairment and estimated

the recoverable amounts of those assets. As the assets do not generate largely

independent cash inflows, they have been incorporated into a relevant cash generating

unit (CGU) and the recoverable amount of that CGU has been determined. The CGU

relevant to the vast majority of non-financial assets is the ‘retail bank CGU’ within

Metro Bank PLC. Management also evaluated whether certain intangible assets were

continuing to be used in the business and therefore whether individual impairments

were required.

The determination of the recoverable amount requires management to estimate

the higher of value in use and fair value less costs to sell of the retail bank CGU. This

assessment is complex and involves a combination of management judgements and

third-party data. The recoverable amount is estimated using forecast cash flows

included in management’s 5 year Long Term Plan (‘LTP’), a terminal growth rate and

a discount rate. There are methodology judgements required in determining a value

in use in compliance with IAS 36 ‘Impairment of assets’. The LTP is also supported by

various assumptions relating to compliance with regulatory capital requirements.

Management concluded that no impairment of the retail bank CGU existed as at 31

December 2024. However, management determined that certain individual assets

should be written off as these were no longer in use by the bank or used in delivering

the LTP.

The forecast cash flows in the LTP, in particular relating to net interest income, the

determination of the discount rate and the assumptions relating to the regulatory

capital requirements are key judgements. Due to the magnitude of the balance and

the judgements involved in respect of the retail bank CGU, the impairment assessment

represents a key audit matter.

To address the risk of impairment of the non-financial assets, we performed a number of audit procedures over the assessment

performed by management.

Our work included the following substantive tests:

• Tested the mathematical integrity of the impairment model and agreed the relevant inputs to the Board approved LTP;

• Evaluated management’s accounting policy and impairment methodology with reference to IFRS requirements;

• Reviewed the forecasts in the LTP and evaluated these for reasonableness. We made inquiries of management, inspected business

plans and critically assessed management’s growth assumptions, including those relating to net interest income, using third party

evidence where relevant;

• Evaluated compliance with regulatory capital requirements and the underlying assumptions during the period of the plan using our

regulatory experts. We tested forecast capital ratios, reviewed regulatory correspondence and held discussions with the PRA;

• Engaged our valuation specialists in assessing the reasonableness of the discount rate and terminal growth rate; and

• Assessed management’s decisions to write off certain intangible assets by reference to the current and expected use of these

within the bank.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Key audit matter How our audit addressed the key audit matter

Recognition of a deferred tax asset (group)

Refer to page 66 (Audit Committee report) and Note 9.

As at 31 December 2024, the group recognised a deferred tax asset of £269m

relating to the utilisation of unused tax losses from past trading activities. A

deferred tax asset can be recognised in relation to these losses to the extent that

it is probable that there will be sufficient future taxable profits to utilise them. The

recognition and recoverability of a deferred tax asset by the group, where there

have been significant losses in the recent past, is based on key assumptions about

the group’s future profitability over an extended period.

The group’s Long-Term Plan (‘LTP’) is the basis of management’s assessment. This

includes numerous assumptions including but not limited to future asset growth,

interest rates and regulatory capital requirements. Management assessed the

inherent risks within the LTP, considered the existence of recent past losses and

developments in the group, the uncertainty of forecasts in later years, and applied

a risk adjustment to forecast taxable profits. This assessment involves significant

estimation uncertainty and represents a key audit matter.

Our work focused on the following key assumptions and judgements:

• The assumptions used in determining the forecast profits in the LTP, in particular

over the next three years, including assumptions about business transformation and

regulatory capital requirements; and

• The appropriateness of adjustments to reflect the risks in the business plan.

To evaluate the recognition of the deferred tax asset, we performed a number of audit procedures over the

assessment performed by management.

Our work included the following substantive tests:

• Evaluated management’s methodology for assessing the recognition and recoverability of the deferred tax asset with

reference to IFRS requirements;

• Understood and evaluated the reasonableness of the key profit forecast assumptions by making inquiries of management,

inspecting business plans, critically assessing management’s growth assumptions and obtaining corroborating evidence;

• Reviewed future regulatory capital assumptions using our regulatory experts;

• Evaluated the ability of management to forecast profits by comparing past actual profits against budgets;

• Assessed the extent of the risk adjustments applied by management to future profits, including in the period beyond the

group’s five-year forecasting time horizon; and

• Assessed the adequacy of the disclosures related to the recognition of the deferred tax asset, including the disclosure of

key judgements and the estimate of the recovery period.

Independent auditors’ report continued

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Independent auditors’ report continued

Key audit matter How our audit addressed the key audit matter

Carrying value of investment in subsidiary (parent)

Refer to page 66 (Audit Committee report) and Note 3 (page 216).

Management reviewed the carrying value of the investment in the subsidiary,

Metro Bank PLC, for indicators of further impairment, or reversal of the

previously recorded impairment, in accordance with IAS 36 as of 31 December

2024. Management estimated the recoverable amount using the higher of value

in use (‘ViU’) or fair value less cost to sell.

The methodology used to estimate the recoverable amount is dependent

on various assumptions, both short term and long term in nature. These

assumptions, which are subject to estimation uncertainty, are derived from a

combination of management’s judgement and third party data. The significant

assumptions that we focused our audit on were those with greater levels of

management judgement and for which variations had the most significant

impact on the recoverable amount. These included the compliance of the

chosen methodology with IAS 36, the bank’s Long Term Plan (‘LTP’) for 2025

to 2029, in particular the net interest income forecasts, regulatory capital

requirements and the discount rate.

Management’s assessment resulted in a reversal of the prior year impairment

charge. Due to the magnitude of the investment, the impairment reversal and the

judgements involved, the impairment assessment represents a key audit matter.

We performed a number of audit procedures over the calculation of the carrying value of investment determined by

management. We challenged and tested the reasonableness of management’s methodology and key assumptions.

Our work included the following substantive tests:

• Tested the mathematical integrity of the impairment model and agreed the relevant inputs to the Board approved

LTP relating to the subsidiary;

• Evaluated management’s accounting policy and impairment methodology with reference to IFRS requirements;

• Reviewed the forecasts in the LTP and evaluated these for reasonableness. We made inquiries of management,

inspected business plans and critically assessed management’s growth assumptions, including those relating to net

interest income, using third party evidence where relevant;

• Engaged our regulatory experts in assessing the reasonableness of the risk weighted asset and capital

requirements; and

• Engaged our valuation specialists in assessing the reasonableness of the discount rate and terminal growth rate.

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How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion

on the financial statements as a whole, taking into account the structure of the group and the company,

the accounting processes and controls, and the industry in which they operate.

We performed a risk assessment, giving consideration to relevant external and internal factors, including

climate change, economic risks, relevant accounting and regulatory developments, as well as the group’s

strategy. We also considered our knowledge and experience obtained in prior year audits of the group.

We continually assessed the risks and changed the scope of our audit where necessary.

As part of considering the impact of climate change in our risk assessment, we evaluated management’s

assessment of the impact of climate risk, which is set out on pages 32 to 41, including their conclusion

that there is no material impact on the financial statements. In particular, we considered management’s

assessment of the impact on ECL on loans and advances to customers within Metro Bank PLC, which

we determined to be most likely to be impacted by climate risk. Management’s assessment gave

consideration to a number of matters, including the Biennial Exploratory Scenario climate stress testing

performed in 2021. As a result of their assessment, an immaterial model overlay was recognised in 2021,

and continues to be held as at 31 December 2024.

The group consists of four components. Components that were deemed significant due to their financial

reporting risk and/or relative financial significance in the context of the group’s consolidated financial

statements were designated as full scope components. We assessed the significance of other

components based on their impact on primary financial statement line items, the presence of significant

risks of material misstatement, and other qualitative factors, such as a history of misstatements whether

due to fraud or error.

In the context of our group audit, we conducted full scope audit procedures for Metro Bank Holdings PLC

(the company) and Metro Bank PLC. Additionally, we performed targeted audit procedures on loans and

advances to customers, as well as on the expected credit loss (ECL) on loans and advances, for SME Asset

Finance Limited and SME Invoice Finance Limited. The remaining balances in our professional judgement

did not present a reasonable risk of material misstatement, whether individually or in aggregate, and were

therefore excluded from further specific audit procedures. We performed other audit procedures,

including tests of information technology controls and group-level analytical review procedures.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative

thresholds for materiality. These, together with qualitative considerations, helped us to determine the

scope of our audit and the nature, timing and extent of our audit procedures on the individual financial

statement line items and disclosures and in evaluating the effect of misstatements, both individually and in

aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole

as follows:

Financial statements – group Financial statements – company

Overall materiality £11.4 million (2023: £11.4 million) £10.0 million (£10.0 million)

How we determined it Approximately 1% of Total Equity

(2023: 1%)

0.9% of Total Equity (2023: 1%)

Rationale for benchmark applied The group’s total equity is the

most appropriate benchmark

as it is linked to the level of

regulatory capital which is

a key metric for management

and users of the financial

statements. It also provides

a stable benchmark.

The company’s total equity

has been used as the most

appropriate benchmark given

its primary purpose is to act

as a holding company, not to

generate operating profits

and therefore a profit-based

measure is not relevant.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall

group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate

of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use

performance materiality in determining the scope of our audit and the nature and extent of our testing of

account balances, classes of transactions and disclosures, for example in determining sample sizes. Our

performance materiality was 75% (2023: 75%) of overall materiality, amounting to £8.5m (2023: £8.5m) for

the group financial statements and £7.5m (2023: £7.5m) for the company financial statements.

In determining the performance materiality, we considered a number of factors – the history of

misstatements, risk assessment and aggregation risk and the effectiveness of controls – and concluded

that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our

audit above £0.6m (group audit) (2023: £0.5m) and £0.5m (company audit) (2023: £0.5m) as well as

misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

Independent auditors’ report continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt

the going concern basis of accounting included:

• Understanding the directors’ going concern assessment process, including the preparation and

approval of the budget. We obtained management’s Board approved forecast covering the going

concern period of assessment of 15 months from the date of these financial statements. We evaluated

the forecasting method adopted by the directors in assessing going concern;

• Evaluation of management’s financial and regulatory capital forecasts. We checked the mathematical

accuracy of the model and evaluated the key assumptions using our understanding of the group and

external evidence where appropriate. We used our Prudential Regulatory experts to review the Bank’s

risk weighted assets and forecast capital requirement assumptions. We also performed a comparison

of the 2024 budget and the actual results to assess the accuracy of the budgeting process;

• Evaluation of the appropriateness of management’s severe but plausible scenarios using our

understanding of the group and the external environment. We considered the mitigating actions that

management identified, including the reduction of costs and slowing down the origination of new loans

and advances, and assessed whether these were in the control of management and possible in the

going concern period of assessment;

• Reviewing management’s stress testing of liquidity and evaluation of the impact on liquidity of past

stress events. We substantiated the liquid resources held, and liquidity facilities available to the group,

for example, with the Bank of England;

• Reviewing correspondence between the Bank and its regulators. We met with the PRA during the audit

and understood the PRA’s perspectives on the Bank’s risks and its capital and liquidity position; and

• Assessing the adequacy of disclosures in the Going Concern statement in note 1 of the Consolidated

and Company Financial Statements and within the Viability statement and going concern section on

pages 46 and 47 and found that these appropriately reflect the key areas of uncertainty identified.

Based on the work we have performed, we have not identified any material uncertainties relating to events

or conditions that, individually or collectively, may cast significant doubt on the group’s and the company’s

ability to continue as a going concern for a period of at least twelve months from when the financial

statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis

of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee

as to the group’s and the company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we

have nothing material to add or draw attention to in relation to the directors’ statement in the financial

statements about whether the directors considered it appropriate to adopt the going concern basis of

accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described

in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial

statements and our auditors’ report thereon. The directors are responsible for the other information. Our

opinion on the financial statements does not cover the other information and, accordingly, we do not

express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of

assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the financial

statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we

identify an apparent material inconsistency or material misstatement, we are required to perform

procedures to conclude whether there is a material misstatement of the financial statements or a material

misstatement of the other information. If, based on the work we have performed, we conclude that there

is a material misstatement of this other information, we are required to report that fact. We have nothing

to report based on these responsibilities.

With respect to the Strategic report and Directors’ report, we also considered whether the disclosures

required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to

report certain opinions and matters as described below.

Strategic report and Directors’ report

In our opinion, based on the work undertaken in the course of the audit, the information given in the

Strategic report and Directors’ report for the year ended 31 December 2024 is consistent with the

financial statements and has been prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and company and their environment obtained in

the course of the audit, we did not identify any material misstatements in the Strategic report and

Directors’ report.

Directors’ Remuneration

In our opinion, the part of the Annual Report on remuneration to be audited has been properly prepared in

accordance with the Companies Act 2006.

Independent auditors’ report continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term

viability and that part of the corporate governance statement relating to the company’s compliance with

the provisions of the UK Corporate Governance Code specified for our review. Our additional

responsibilities with respect to the corporate governance statement as other information are described in

the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the corporate governance statement is materially consistent with the financial statements

and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in

relation to:

• The directors’ confirmation that they have carried out a robust assessment of the emerging and

principal risks;

• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to

identify emerging risks and an explanation of how these are being managed or mitigated;

• The directors’ statement in the financial statements about whether they considered it appropriate to

adopt the going concern basis of accounting in preparing them, and their identification of any material

uncertainties to the group’s and company’s ability to continue to do so over a period of at least twelve

months from the date of approval of the financial statements;

• The directors’ explanation as to their assessment of the group’s and company’s prospects, the period

this assessment covers and why the period is appropriate; and

• The directors’ statement as to whether they have a reasonable expectation that the company will be

able to continue in operation and meet its liabilities as they fall due over the period of its assessment,

including any related disclosures drawing attention to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group and company

was substantially less in scope than an audit and only consisted of making inquiries and considering the

directors’ process supporting their statement; checking that the statement is in alignment with the

relevant provisions of the UK Corporate Governance Code; and considering whether the statement is

consistent with the financial statements and our knowledge and understanding of the group and

company and their environment obtained in the course of the audit. In addition, based on the work

undertaken as part of our audit, we have concluded that each of the following elements of the corporate

governance statement is materially consistent with the financial statements and our knowledge obtained

during the audit:

• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and

understandable, and provides the information necessary for the members to assess the group’s and

company’s position, performance, business model and strategy;

• The section of the Annual Report that describes the review of effectiveness of risk management and

internal control systems; and

• The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement relating

to the company’s compliance with the Code does not properly disclose a departure from a relevant

provision of the Code specified under the Listing Rules for review by the auditors.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the statement of Directors’ responsibilities in respect of the financial

statements, the directors are responsible for the preparation of the financial statements in accordance

with the applicable framework and for being satisfied that they give a true and fair view. The directors are

also responsible for such internal control as they determine is necessary to enable the preparation of

financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the

company’s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless the directors either intend to liquidate

the group or the company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are

free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that

includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the

basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-

compliance with laws and regulations related to the Financial Conduct Authority (FCA) and Prudential

Regulatory Authority (PRA), and we considered the extent to which non-compliance might have a material

effect on the financial statements. We also considered those laws and regulations that have a direct

impact on the financial statements such as UK tax legislation and the Companies Act 2006. We evaluated

management’s incentives and opportunities for fraudulent manipulation of the financial statements

(including the risk of override of controls), and determined that the principal risks were related to posting

manual journal entries to manipulate financial performance and management bias in accounting

estimates. Audit procedures performed by the engagement team included:

• Enquiries of the Audit Committee, management, internal audit and the group’s legal counsel, including

consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

• Evaluation of the design and implementation of controls designed to prevent and detect irregularities

relevant to financial reporting;

• Reviewing key correspondence and holding discussions with the FCA and the PRA, in relation to the

group’s compliance with banking regulations;

• Incorporating unpredictability into the nature, timing and extent of our testing;

• Challenging assumptions and judgements made by management in respect of the determination of the

allowance for expected credit losses on loans and advances to customers, the carrying values of

non-financial assets, the carrying value of the investment in subsidiary and the recognition of a deferred

tax asset in relation to past trading losses (see related key audit matters);

Independent auditors’ report continued

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Independent auditors’ report continued

• Identifying and testing journal entries including those posted by infrequent or unexpected users,

posted to certain account combinations and those posted late in the financial reporting process;

and

• Identifying and testing significant and unusual transactions and material non-recurring items such as

impairments and write-offs.

There are inherent limitations in the audit procedures described above. We are less likely to become

aware of instances of non-compliance with laws and regulations that are not closely related to events

and transactions reflected in the financial statements. Also, the risk of not detecting a material

misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud

may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or

through collusion.

Our audit testing might include testing complete populations of certain transactions and balances,

possibly using data auditing techniques. However, it typically involves selecting a limited number of

items for testing, rather than testing complete populations. We will often seek to target particular

items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to

enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the

FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’

report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a

body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose.

We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any

other person to whom this report is shown or into whose hands it may come save where expressly

agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the company, or returns adequate for our audit

have not been received from branches not visited by us; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• the company financial statements and the part of the Annual Report on remuneration to be audited are

not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit Committee, we were appointed by the directors on 25 April

2023 to audit the financial statements for the year ended 31 December 2023 and subsequent financial

periods. The period of total uninterrupted engagement is 2 years, covering the years ended 31 December

2023 to 31 December 2024.

Metro Bank Holdings PLC is the parent of Metro Bank PLC which we have audited since the year ended 31

December 2010 with the period of total uninterrupted engagement being 15 years, covering the years

ended 31 December 2010 to 31 December 2024.

Other matter

The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules

to include these financial statements in an annual financial report prepared under the structured digital

format required by DTR 4.1.15R – 4.1.18R and filed on the National Storage Mechanism of the Financial

Conduct Authority. This auditors’ report provides no assurance over whether the structured digital format

annual financial report has been prepared in accordance with those requirements.

Jonathan Holloway (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

22 April 2025

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Consolidated statement of comprehensive income

For the year ended 31 December 2024

				Years ended 31 December
			2024	2023
		Notes	£’million	£’million
Interest income		2	93 5.4	855 .7
Interest expense		2	(5 5 7. 5)	(4 4 3 . 8)
Net interest income			3 7 7. 9	41 1 . 9
Fee and commission income		3	9 8.0	95 .0
Fee and commission expense		3	(4. 8)	(4 .6)
Net fee and commission income			93. 2	90.4
(Loss)/gain on sale of assets 2		4	(101.4)	2 .7
Other income 1		5	35 .6	143.9
Total income			405.3	648.9
General operating expenses		6	(4 89. 0)	(50 2.9)
Depreciation and amortisation		14, 15	( 7 7. 3)	( 7 7. 7 )
Impairment and write-offs of property, plant, equipment and intangible assets		14, 15	(4 4 .0)	(4 .6)
Total operating expenses			(610. 3)	(5 8 5. 2)
Expected credit loss expense		30	(7. 1)	(33 . 2)
(Loss)/profit before tax			(2 1 2 .1)	30. 5
Taxation		9	25 4.6	(1 .0)
Profit for the year			42.5	29. 5
Other comprehensive income for the year
Items which will be reclassified subsequently to profit or loss:
Movement in respect of investment securities held at fair value through other comprehensive income (net of tax):
•	changes in fair value	28	3.4	2.4
Total other comprehensive income			3.4	2.4
Total comprehensive profit for the year			45.9	31. 9
Profit per share
Basic (pence)		36	6.3	13 .8
Diluted (pence)		36	6.3	13.4

1. Other income includes a £100 million gain on debt extinguishment (note 5).

2. (Loss)/gain on sale of assets includes £101.4 million loss on sale of £2.5 billion residential mortgage portfolio (note 4).

The accompanying notes on pages 165 to 211 form an integral part of these financial statements.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Consolidated balance sheet

As at 31 December 2024

			Years ended 31 December
		2024	2023
	Notes	£’million	£’million
Cash and balances with other banks	11	2,8 11	3 ,891
Loans and advances to customers	12	9, 01 3	12 ,297
Investment securities held at fair value through other comprehensive income	13	37 7	476
Investment securities held at amortised cost	13	4 ,1 1 3	4,403
Derivative financial assets	21	16	36
Property, plant and equipment	14	7 11	723
Intangible assets	15	126	193
Prepayments and accrued income	16	93	118
Deferred tax assets	9	24 0	–
Other assets	17	82	108
Total assets		1 7, 5 8 2	2 2 , 24 5
Deposits from customers	18	14,4 58	15,6 23
Deposits from central banks	19	400	3 ,05 0
Debt securities	20	675	69 4
Repurchase agreements	10	39 1	1 ,1 9 1
Derivative financial liabilities	21	1	–
Lease liabilities	22	205	23 4
Deferred grants	23	13	16
Provisions	24	11	23
Deferred tax liability	9	–	13
Other liabilities	25	24 5	267
Total liabilities		16, 399	21,111
Share premium	26	14 4	14 4
Retained earnings	27	1 ,02 2	97 8
Other reserves	28	17	12
Total equity		1 ,1 8 3	1 ,1 3 4
Total equity and liabilities		1 7, 5 8 2	2 2 , 24 5

The accompanying notes on pages 165 to 211 form an integral part of these financial statements. The financial statements and accompanying notes were approved by the Board of Directors on 22 April 2025 and

signed on its behalf by:

Robert Sharpe Daniel Frumkin

Chair Chief Executive Officer

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Consolidated statement of changes in equity

For the year ended 31 December 2024

	Called-up					Share
	share	Share	Merger	Retained	FVOCI	option	Total
	capital	premium	reserve	earnings	reserve	reserve	equity
	£’million	£’million	£’million	£’million	£’million	£’million	£’million
Balance as at 1 January 2024	–	14 4	–	97 8	(11)	23	1 ,1 3 4
Profit for the year	–	–	–	43	–	–	43
Other comprehensive income (net of tax) relating to investment securities designated at fair value through other comprehensive income	–	–	–	–	4	–	4
Total comprehensive income	–	–	–	43	4	–	47
Equity–settled share based payment charges	–	–	–	–	–	2	2
Transfer of b/f share option reserve	–	–	–	1	–	(1)	–
Balance as at 31 December 2024	–	144	–	1 ,02 2	(7)	24	1 ,1 8 3
Balance as at 1 January 2023	–	1,964	–	(1,015)	(13)	20	956
Profit for the year	–	–	–	29	–	–	29
Other comprehensive income (net of tax) relating to investment securities designated at fair value through other comprehensive income	–	–	–	–	2	–	2
Total comprehensive income	–	–	–	29	2	–	31
Net share option movements	–	–	–	–	–	3	3
Cancellation of Metro Bank PLC share capital and share premium	–	(1 ,9 6 4)	–	1,96 4	–	–	–
Issuance of Metro Bank Holdings PLC share capital	–	–	965	(9 65)	–	–	–
Bonus issuance	965	–	(9 65)	–	–	–	–
Capital reduction of Metro Bank Holdings PLC share capital	(96 5)	–	–	965	–	–	–
Shares issued	–	150	–	–	–	–	1 50
Cost of shares issued	–	(6)	–	–	–	–	(6)
Balance as at 31 December 2023	–	144	–	97 8	(11)	23	1 ,1 3 4

Notes 26 26 27 28 28

The accompanying notes on pages 165 to 211 form an integral part of these financial statements.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Consolidated cash flow statement

For the year ended 31 December 2024

			Years ended 31 December
		2024	2023
	Notes	£’million	£’million
Reconciliation of profit/(loss) before tax to net cash flows from operating activities:
(Loss)/profit before tax		(2 12)	31
Adjustments for non-cash items	37	(359)	(3 76)
Interest received		948	834
Interest paid		(585)	(370)
Changes in other operating assets		3 ,320	74 4
Changes in other operating liabilities		(4 ,4 97)	(23 5)
Net cash (outflows)/inflows from operating activities		(1,38 5)	628
Cash flows from investing activities
Sales, redemptions and paydowns of investment securities		1,0 17	1 ,870
Purchase of investment securities		(63 0)	(816)
Purchase of property, plant and equipment	14	(41)	(12)
Purchase and development of intangible assets	15	(19)	(2 6)
Net cash inflows from investing activities		327	1,016
Cash flows from financing activities
Repayment of capital element of leases	22	(2 2)	(23)
Issuance of new shares	26	–	150
Cost of share issuance	26	–	(6)
Issuance of debt securities	20	–	175
Cost of debt issuance	20	–	(5)
Net cash (outflows)/inflows from financing activities		(2 2)	291
Net (decrease)/increase in cash and cash equivalents		(1,080)	1,93 5
Cash and cash equivalents at start of year	11	3,89 1	1,956
Cash and cash equivalents at end of year	11	2,8 11	3 ,891

The accompanying notes on pages 165 to 211 form an integral part of these financial statements.

164

Metro Bank Holdings PLC Annual Report and Accounts 2024

Notes to the consolidated financial statements

1. Basis of preparation and significant accounting policies

This section sets out the Group’s (‘our’ or ‘we’) accounting policies which relate to the financial statements

as a whole. Where an accounting policy relates specifically to a note then the related accounting policy is

set out within that note. All policies have been consistently applied to all the years presented unless stated

otherwise.

1.1 General information

Metro Bank Holdings PLC (the ‘Company’) is the holding company of Metro Bank PLC, which provides

retail and commercial banking services in the UK . Metro Bank Holdings PLC is a public limited liability

company incorporated and domiciled in England and Wales under the Companies Act 2006 (Company

number 14387040) and is listed on the London Stock Exchange (LON:MTRO). The address of its registered

office is One Southampton Row, London, WC1B 5HA.

1.2 Basis of preparation

The consolidated financial statements of the Company together with its subsidiaries (the ‘Group’) have

been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the

UK, interpretations issued by the IFRS Interpretations Committee and the Companies Act 2006 applicable

to companies reporting under IFRSs.

The consolidated financial statements of the Group and Company were authorised by the Board for issue

on 22 April 2025.

The financial information has been prepared under the historical cost convention, as modified by the

revaluation of certain financial assets and liabilities at fair value through profit or loss and other

comprehensive income. Fair value is defined as the price that would be received or paid in an orderly

transaction between market participants at the measurement date.

Certain disclosures required under IFRS 7 ‘Financial instruments: disclosures’ and IAS 1 ‘Presentation of

financial statements’ have been included within the Risk report on pages 121 to 150. Where information is

marked as audited, it is incorporated into these financial statements and it is covered by the Independent

auditor’s report.

The Directors consider that it is appropriate to continue to adopt the going concern basis of accounting in

preparing the financial statements. In reaching this assessment, the Directors have considered projections

for the Group’s capital and funding position as well as other principal risks. As part of this process the

Directors have considered and approved the Group’s most recent Long-Term Plan including severe but

plausible downside scenarios. The Directors also considered the key assumptions and uncertainties that

feed into these plans alongside management actions and mitigants that would be available if required.

Under all scenarios considered, the Directors believe the Group to remain a going concern on the basis

that it maintains sufficient resources (including liquidity and capital) to be able to continue to operate for

the foreseeable future (considered to be at least 15 months from the date of these financial statements).

The Directors do not consider there to be any material uncertainties with regards to the assessment on

going concern. Further details on the assessment undertaken by the Directors is set out in the Viability

statement and going concern section on pages 46 and 47.

Basis of consolidation

Our consolidated financial statements include the results for all entities which we control (details of our

subsidiaries can be found in note 3 to the Company financial statements on page 217). Controlled entities

are all entities to which we are exposed, or have rights, to variable returns from our involvement with the

entity and have the ability to affect those returns through our power over it. An assessment of control is

performed on an ongoing basis.

Our controlled entities are consolidated from the date on which we establish control until the date that

control ceases. The acquisition method of accounting is used to account for business combinations other

than those under common control.

Post-acquisition, income and expenses are included in the consolidated income statement on a line-by-line

basis in accordance with the accounting policies set out herein, adjusting for any intra-group transactions

which are eliminated in full upon consolidation.

In publishing the Company financial statements here together with the Group financial statements, we

have adopted the exemption in section 408(3) of the Companies Act 2006. This means we have chosen

not to present a Company statement of comprehensive income and related notes as part of these

financial statements.

Insertion of Metro Bank Holdings PLC

To meet the Bank of England’s resolution requirements, on 19 May 2023, Metro Bank Holdings PLC was

inserted as the new ultimate holding company and listed entity of the Group. Prior to this date Metro Bank

PLC was both a banking entity and the ultimate parent company of the Group, but has subsequently

become a 100% subsidiary of Metro Bank Holdings PLC.

The insertion of Metro Bank Holdings PLC was treated as a business combination under common control,

with the Group controlled by the same parties both before and after the insertion. Combinations under

common control are outside the scope of IFRS 3 ‘Business Combinations’ and accordingly, the insertion

was not recognised at fair value and no goodwill or fair value acquisition adjustments were recognised.

The Group had instead applied the predecessor accounting approach as this most faithfully represented

the substance of the facts and circumstances of the series of transactions that comprised the insertion of

Metro Bank Holdings PLC. In applying this approach, the Group had used the carrying amounts in Metro

Bank PLC’s consolidated financial statements at the date of transfer to determine the value of the assets

and liabilities transferred.

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1.3 Functional and presentation currency

These financial statements are presented in pounds sterling (£), which is our functional currency. All

amounts have been rounded to the nearest £1 million and £0.1 million for balance sheet and income

statement line items respectively, except where otherwise indicated.

1.4 Cash flow statement

The cash flow statement shows the changes in cash and cash equivalents arising during the year from

operating activities, investing activities and financing activities.

The cash flows from operating activities are determined by using the indirect method. Under that method,

loss before tax is adjusted for non-cash items and changes in other assets and liabilities to determine net

cash inflows or outflows from operating activities. Cash flows from investing and financing activities are

determined using the direct method which directly reports the cash effects of the transactions.

1.5 Changes in accounting policies and presentational amendments

During the year, there have not been any changes in any accounting policies or disclosures that have had

a material impact on our financial statements.

1.6 Future accounting developments

IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies for annual reporting periods

beginning on or after 1 January 2027. Whilst early application of the standard is permitted, the Group has

not early adopted them in preparing these consolidated financial statements. The Group is still in the

process of assessing the potential impact of this standard on presentation and disclosures.

1.7 Segmental reporting

IFRS 8 ‘Operating Segments’ requires operating segments to be identified on the basis of internal reports

and components of the Group which are regularly reviewed by the Chief Operating Decision Maker to

allocate resources to segments and to assess their performance. For this purpose, the Chief Operating

Decision Maker of the Group is our Board of Directors.

The Board considers the results of the Group as a whole when assessing the performance of the Group

and allocating resources, owing to our simple structure. Accordingly, the Group has a single operating

segment. We operate solely within the UK and, as such, no geographical analysis is required. We are not

reliant on any single customer.

1.8 Foreign currency translation

Transactions in a foreign currency are translated into the functional currency using the exchange rates

prevailing at the date of the transaction.

Monetary items denominated in a foreign currency are translated using the closing rate as at the reporting

date. Non-monetary items measured at historical cost denominated in a foreign currency are translated

with the exchange rate as at the date of initial recognition; non-monetary items in a foreign currency that

are measured at fair value are translated using the exchange rates at the date when the fair value was

determined.

Foreign currency differences arising on translation are recognised in other income. Gains and losses

arising from foreign currency transactions offered to customers are also recognised in other income.

1.9 Critical accounting judgements and estimates

The preparation of financial statements in conformity with IFRS requires us to make material judgements

as well as estimates which, although based on our best assessment, by definition will seldom equal the

actual results. Management believes that the underlying assumptions applied at 31 December 2024 are

appropriate and that these consolidated financial statements therefore present our financial position and

results fairly. The areas involving a higher degree of complexity, judgement or where estimates have a

significant risk of resulting in a material adjustment to the carrying amounts within the next financial year

are:

Area	Estimates	Judgements	Further details
Recognition of deferred	Estimates are based on	Availability of future taxable	Note 9
tax assets	the Long-Term Plan	profit against which tax losses
	(which include inherent	carried forward can be utilised
	uncertainties)
Measurement of ECL	Multiple forward-	Significant increase	Note 30
	looking scenarios	in credit risk
		Use of MOs and PMAs
Impairment of non-	n/a	Key assumptions used for VIU	Note 15
financial assets		calculations

Notes to the consolidated financial statements continued

166

Metro Bank Holdings PLC Annual Report and Accounts 2024

2. Net interest income

Accounting policy

We recognise interest income and expense for all interest–bearing financial instruments within

‘interest income’ and ‘interest expense’ in the income statement using the effective interest rate

method. The effective interest rate method is a method of calculating the amortised cost of a

financial asset or a financial liability and of allocating the interest income or interest expense over

the relevant period. The effective interest rate is the rate that exactly discounts estimated future

cash payments or receipts through the expected life of the financial instrument to the net carrying

amount of the financial asset or financial liability. When calculating the effective interest rate we

estimate cash flows considering all contractual terms of the financial instrument (for example,

prepayment options) but do not consider future credit losses except for POCI assets.

The calculation includes all fees paid or received between parties to the contract that are an

integral part of the effective interest rate, transaction costs and all other premiums or discounts.

For loans that are credit impaired, interest income is calculated on the carrying amount of the loan

net of credit impairment.

Interest income

	2024	2023
	£’million	£’million
Cash and balances held with other banks	193.1	120.9
Loans and advances to customers	586.2	599.9
Investment securities held at amortised cost	126.1	118.6
Investment securities held at FVOCI	18.3	6.8
Interest income calculated using the effective interest rate method	923.7	846.2
Derivatives in hedge relationships	11.7	9.5
Total interest income	935.4	855.7

Interest expense

	2024	2023
	£’million	£’million
Deposits from customers	303.6	147. 8
Deposits from central banks	124.2	161.3
Debt securities	84.8	55.7
Lease liabilities	12.4	13.1
Repurchase agreements	26.5	50.1
Interest expense calculated using the effective interest rate method	551.5	428.0
Derivatives in hedge relationships	6.0	15.8
Total interest expense	55 7.5	443.8

3. Net fee and commission income

Accounting policy

Fee and commission income is earned from a wide range of services we provide to our customers.

We account for fees and commissions as follows:

Product or service	Nature, timing and satisfaction of performance obligations and payment terms
Service charges and other	We levy a range of standard charges and fees for account maintenance or
fee income	specific account services. Where the fee is earned upon the execution of
	a significant act at a point in time, for example CHAPS payment charges,
	these are recognised as revenue when the act is completed for the
	customer. Where the income is earned from the provision of services, for
	example an account maintenance fee, this is recognised as revenue over
	time when the service is delivered.
Safe deposit box	Revenue is recognised over the period the customer has access to the
	box from the date possession is taken. Safe deposit box fees are billed
	on either a monthly or annual basis with a standard set price payable
	dependent on the size of the box.
ATM and interchange fees	Where we earn fees from our ATMs or from interchange this is
	recognised at the point the service is delivered.

Expenses that are directly related and incremental to the generation of fee and commission income

are presented within fee and commission expense.

As disclosed in note 1, we provide services solely within the UK and therefore revenues are not

presented on a geographic basis. Revenue is grouped solely by contract-type as we believe this

best depicts how the nature, amount and timing of our revenue and cash flows are affected by

economic factors.

	2024	2023
	£’million	£’million
Service charges and other fee income	38.6	36.8
Safe deposit box income	19.0	18.2
ATM and interchange fees	40.4	40.0
Fee and commission income	98.0	95.0
Fee and commission expense	(4.8)	(4.6)
Total net fee and commission income	93.2	90.4

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

4. Loss/gain on sale of assets

	2024	2023
	£’million	£’million
Investment securities held at amortised cost	–	2.9
Loan portfolios	(101.4)	(0.2)
Total net (loss)/gain on sale of assets	(101.4)	2.7

Loan portfolio sales

The loss on sale relates to £2.5 billion of prime residential mortgages sold to NatWest Group plc.

Metro Bank completed the sale on 30 September 2024. We will continue to service the loans until the

contractual migration date recognising an amount payable of £47 million as at 31 December 2024 in other

liabilities (note 25).

5. Other income

Accounting policy

Other income is accounted for as follows:

Product or service	Nature, timing and satisfaction of performance obligations and payment terms
Foreign currency transactions Gains on foreign currency transactions is the spread earned on foreign	currency transactions performed for our customers along with any
	associated fees. It is recognised at the point in time that the exchange is
	executed.
Rental income	Rental income is primarily earned from the letting out of surplus space in
	some of our properties. The revenue is recognised on a straight-line basis
	over the life of the lease.
Deferred grant income	Deferred grant income relates to amounts recognised in relation to
	the amounts drawn down against the Capability and Innovation Fund
	(C&I) award (further details of which can be found in note 23). Income is
	recognised in line with the delivery of the commitments we agreed to as
	part of the bid.
Other income	Other income primarily consists of hedge ineffectiveness, foreign
	currency differences arising on translation and movements in financial
	assets and liabilities held at fair value through profit and loss.

	2024	2023
	£’million	£’million
Foreign currency transactions	29.7	34.0
Rental income	1.3	1.1
Deferred grant income	3.4	2.4
Gain on debt extinguishment	–	100.0
Other	1.2	6.4
Total other income	35.6	143.9

Gain on debt extinguishment

As part of the capital package which completed in November 2023, a 40% haircut was agreed with

bondholders on our Tier 2 debt securities, which saw their £250 million of existing notes replaced with

£150 million of new notes. This resulted in a gain of £100 million.

Notes to the consolidated financial statements continued

168

Metro Bank Holdings PLC Annual Report and Accounts 2024

6. General operating expenses

	2024	2023
	£’million	£’million
People costs (note 7)	209.6	241.2
Information technology costs	60.1	59.7
Occupancy costs	30.9	31.7
Money transmission and other banking-related costs	49.3	49.2
Transformation costs	31.1	20.2
Remediation costs	21.3	–
Capability and Innovation Fund costs 1	3.4	2.4
Legal and regulatory fees	9.0	7.0
Professional fees 2	27.7	23.2
Printing, postage and stationery costs	7.5	7.2
Travel costs	1.4	1.5
Marketing costs	9.4	7.7
Costs associated with capital raise	0.1	26.0
Holding company related costs	–	1.8
Other	28.2	24.1
Total general operating expenses	489.0	502.9

1. C&I costs represent the non-capitalisable costs of delivering the C&I digital commitments. It includes £2.4 million (2023:

£1.9 million) of people costs. These are included within C&I costs rather than people costs to better reflect their nature. In

addition to these costs the grant income recognised in note 5 is also used to offset property costs relating to the store

commitments delivered.

2. Professional fees are shown net of both amounts capitalised and amounts included within the transformation costs,

remediation costs and C&I costs lines.

Information technology costs

Information technology costs include costs expensed in relation to software licences, support from

third-party providers, back up costs and cloud computing costs.

Occupancy costs

Occupancy costs consist of the non-IFRS 16 property costs of occupying our stores and offices, including

rates, utilities and property maintenance costs as well as irrecoverable VAT on lease payments.

Money transmission and other banking-related costs

Money transmission and other banking-related costs are made up of the overheads relating to servicing

our deposits and lending that do not constitute either part of the effective interest rate, or fee and

commission expense.

Professional fees

Professional costs includes £12.3 million (2023: £7.3 million) of R&D costs not capitalised. This does not

include any costs of colleagues working on these projects that are include in the people costs line.

Including these costs we spent £25.1 million (2023: £25.1 million) on R&D costs not capitalised.

Included within legal and regulatory fees is £0.13 million (2023: £0.06m) in respect of the Financial

Services Compensation Scheme (FSCS) levy.

Transformation, remediation, Capability and Innovation Fund, costs associated with capital

raise and holding company insertion costs

Remediation costs include £16.7 million in relation to the FCA fine following the resolution of enquiries into

transaction monitoring systems and controls that began in 2016 and were remediated by 2020.

Transformation costs include redundancy costs within the year and those related to the strategic

collaboration with Infosys.

Further details on other transformation, remediation, Capability and Innovation Fund and business

acquisition and integration costs can be found on page 227 .

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

7. People costs

	2024	2023
	£’million	£’million
Wages and salaries 1	174.0	201.7
Social security costs 1	20.7	21.8
Pension costs 1	12.9	14.5
Equity-settled share-based payments	2.0	3.2
Total people costs	209.6	241.2

1. Amounts are net of people costs which are capitalised as well as those relating to C&I (see note 23) as these costs will be

offset against the C&I grant income (note 5). Amounts are also net of people costs relating to our restructuring. Most of the

cost was provided for in 2023, and details of provision and drawdown can be found in note 24.

The average monthly number of persons employed during the year was 3,455 (2023: 4,286).

	2024	2023
Customer-facing	1,437	1,985
Non-customer-facing	2,018	2,301
Total number of persons employed	3,455	4,286

Pension costs

We operate a defined contribution pension scheme for our colleagues. Contributions to colleagues’

individual personal pension plans are made on a contractual basis, with no further payment obligations

once the contributions have been paid. These contributions are recognised as an expense when they

fall due.

Payments were made amounting to £13.7 million (2023: £15.4 million) to colleagues’ individual personal

pension plans during the year. This includes pension contributions that were capitalised as well as those

relating to colleagues working on C&I which are not included in the figures above.

8. Fees payable to our auditors

During the year, the Group (including its subsidiaries) obtained the following services from our auditors,

PricewaterhouseCoopers LLP:

	2024	2023
	£’000	£’000
Audit of the Group and Company financial statements	105	54
Audit of the financial statements of the Company’s subsidiaries	2,783	2,309
Audit-related assurance services	162	144
Other assurance services	–	555
Total fees payable to our auditors	3,050	3,062

Of the audit fees above, £125 thousand relates to the prior financial year.

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

9. Taxation

Accounting policy

Current tax

Our current tax comprises the expected tax payable or receivable on the taxable profit for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates

enacted or substantively enacted at the reporting date.

Where we have tax losses that can be relieved only by carry-forward against taxable profits of future periods, a deductible temporary difference arises. Those losses carried forward are set off against deferred

tax liabilities carried in the balance sheet.

Deferred tax

Deferred tax is recognised in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax

rates (and laws) that have been enacted or substantively enacted by the date of the balance sheet and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

The principal differences arise from trading losses, depreciation of property, plant and equipment and relief on research and development expenditure.

We recognise a deferred tax asset to the extent that it is probable that future taxable profits will be available against which they can be used and deferred tax liabilities are provided on taxable temporary

differences. Deferred tax assets and liabilities are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised or the deferred tax

liability settled.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets against current tax liabilities and where the deferred tax assets and liabilities relate to taxes

levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle on a net basis.

Tax expense

The components of the tax expense for the year are:

	2024	2023
	£’million	£’million
Current tax
Current tax	–	(0.1)
Adjustment in respect of prior years	–	–
Total current tax credit/(expense)	–	(0.1)
Deferred tax
Origination and reversal of temporary differences	254.1	(0.5)
Effect of changes in tax rates	–	(0.4)
Adjustment in respect of prior years	0.5	–
Total deferred tax credit/(expense)	254.6	(0.9)
Total tax credit/(expense)	254.6	(1.0)

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

9. Taxation continued

Reconciliation of the total tax expense

The tax expense shown in the income statement differs from the tax expense that would apply if all accounting losses had been taxed at the UK corporation tax rate. A reconciliation between the expense and the

accounting profit/(loss) multiplied by the UK corporation tax rate is as follows:

		Effective		Effective
	2024	tax rate	2023	tax rate
	£’million	%	£’million	%
Accounting (loss)/profit before tax	(212.1)		30.5
Tax credit/(expense) at statutory tax rate of 25% (2023: 23.5%)	53.0	25.0%	( 7. 2)	23.5%
Tax effects of:
Non-deductible expenses – depreciation on non-qualifying fixed assets	(3.0)	(1.4%)	(2.5)	8.3%
Non-deductible expenses – investment property impairment	–	–	–	–
Non-deductible expenses – remediation	–	–	–	–
Non-deductible expenses – other	( 7.7 )	(3.6%)	(0.8)	2.6%
Impact of intangible asset write-off on research and development deferred tax liability	–	–	0.1	(0.3%)
Share-based payments	(0.2)	(0.1%)	(1.2)	3.9%
Adjustment in respect of prior years	0.6	0.3%	–	–
Current year losses for which no deferred tax asset has been recognised	–	–	(15.4)	50.5%
Losses offset against current year profits	–	–	1.1	(3.6%)
Movement in recognised DTA for unused tax losses	211.9	99.9%	1.8	(5.9%)
Effect of changes in tax rates	–	–	(0.4)	1.3%
Income not taxable	–	–	23.5	( 7 7.0%)
Tax credit/(expense) reported in the consolidated income statement	254.6	120.0%	(1.0)	3.3%

The effective tax rate for the year is 120.0% (2023: 3.3%). The main reasons for this, in addition to the reported accounting loss before tax for the year, are set out below:

Non-deductible expenses – other

This mainly relates to the FCA fine and intangible asset amortisation and impairment upon which a tax deduction is not available.

Share-based payments

During the year, the Bank share price increased from £0.37 to £0.94. This had the impact of increasing the deferred tax asset, resulting in a deferred tax credit. The charge to the income statement (upon which a tax

deduction is not available) is higher than the deferred tax credit, resulting in a small increase in the total tax charge.

Adjustment in respect of prior years

Following the filing of our 2023 corporation tax return we reduced our R&D deferred tax liability following a decrease in qualifying capital R&D expenditure.

Notes to the consolidated financial statements continued

172

Metro Bank Holdings PLC Annual Report and Accounts 2024

9. Taxation continued

Deferred tax assets

A deferred tax asset must be regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not there will be suitable tax profits from which

the future of the underlying timing differences can be deducted.

The following table shows deferred tax recorded in the statement of financial position and changes recorded in the tax expense:

				31 December 2024						31 December 2023
		Investment						Investment
		securities	Share-	Property,				securities	Share-	Property,
	Unused	and	based	plant and	Intangible		Unused	and	based	plant and	Intangible
	tax losses	impairments	payments	equipment	assets	Total	tax losses	impairments	payments	equipment	assets	Total
	£’million	£’million	£’million	£’million	£’million	£’million	£’million	£’million	£’million	£’million	£’million	£’million
Deferred tax assets	269	1	1	–	–	271	14	2	1	–	–	17
Deferred tax liabilities	–	3	–	(31)	(3)	(31)	–	4	–	(29)	(5)	(30)
Deferred tax assets (net)	269	4	1	(31)	(3)	240	14	6	1	(29)	(5)	(13)
1 January	14	6	1	(29)	(5)	(13)	12	7	1	(26)	(6)	(12)
Prior year movement	(1)	(1)	–	–	1	(1)
Income statement	256	–	–	(2)	1	255	2	(1)	–	(3)	1	(1)
Other comprehensive expenses	–	(1)	–	–	–	(1)	–	–	–	–	–	–
31 December	269	4	1	(31)	(3)	240	14	6	1	(29)	(5)	(13)

Offsetting of deferred tax assets and liabilities

We have presented all the deferred tax assets and liabilities above on a net basis within the balance sheet on page 162. This is on the basis that all our deferred tax assets and liabilities relate to taxes levied by HMRC

and we have a legally enforceable right to offset these. Further details on our offsetting of financial assets and liabilities can be found in note 33.

Deferred Tax on unused tax losses

Deferred tax assets are recognised only to the extent it is probable that future taxable profits will be available against which the assets can be utilised. Under current law there is no expiry date for UK trading losses not

yet utilised. An assessment has been undertaken, taking account of any deferred tax liabilities against which the reversal can be offset and using the Board’s latest Long-Term Plan forecasts, to assess the level of

future taxable profits.

The forecasts are consistent with those used in the Value-in-Use (VIU) calculations. However, the Bank’s Long-Term Plan contains inherent execution risks, including regulatory changes, market volatility, and

operational factors. These uncertainties require ongoing monitoring and regular stress testing to ensure the bank maintains sufficient resilience throughout the plan’s implementation. Whilst loss making in the recent

past, the Bank returned to an underlying profit in H2 2024 and has made sufficient progress in the execution of its transformation plan that it is now projected to generate sufficient future taxable profits to fully utilise

its remaining tax losses. The plan assumes an improvement in net interest margin (driven by the strategic pivot to higher yielding lending, a lower cost of deposits and current market expectations of future interest

rates) and continued cost discipline and control. Further details of the progress the Group has made against its strategic objectives and the risks faced by the Bank are explained in the Strategic Report.

For the purposes of assessing the utilisation of the tax losses and estimating the period over which the losses will be utilised, the forecasts have been adjusted to reflect the inherent risks of the Bank and the

environment in which it operates. These include external macro-economic factors such as base rates, operating costs and the extent of credit losses. As a result, we have recognised a deferred tax asset of

£269 million (2023: deferred tax asset £14 million) on unused tax losses totalling £1,073 million leading to a credit to the income statement of £256 million. The value of the deferred tax asset in respect of tax losses is

expected to be fully recovered by 2035. A 10% annual reduction in forecast profits each year would increase the estimated recovery period by 1 year.

Notes to the consolidated financial statements continued

173Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

10. Financial instruments

Accounting policy

Repurchase agreements

Where we sell financial assets subject to sale and repurchase agreements, the financial assets

are retained in their respective balance sheet categories, however they become encumbered

and are not available for transfer or sale. The associated liabilities are included in the repurchase

agreements line. The difference between the sale and repurchase price of repurchase agreements

is treated as interest and accrued over the life of the agreements using the effective interest

method as set out in note 2.

Other financial instruments

Our accounting policies in respect of our other financial instruments can be found in their

respective notes, where applicable.

Our financial instruments primarily comprise customer deposits, loans and advances to customers and

investment securities, all of which arise as a result of our normal operations.

The main financial risks arising from our financial instruments are credit risk, liquidity risk and market risks

(price and interest rate risk). Further details on these risks can be found within the Risk report on pages 121

to 150.

The financial instruments we hold are simple in nature and we do not consider that we have made any

significant or material judgements relating to the classification and measurement of financial instruments

under IFRS 9.

Cash and balances with other banks, trade and other receivables, trade and other payables and other

assets and liabilities which meet the definition of financial instruments are not included in the following

tables.

Classification of financial instruments

			31 December 2024
	Fair value
	through
	profit and		Amortised
	loss	FVOCI	cost	Total
	£’million	£’million	£’million	£’million
Assets
Loans and advances to customers	–	–	9,013	9,013
Investment securities	–	377	4,113	4,490
Derivative financial assets	16	–	–	16
Liabilities
Deposits from customers	–	–	14,458	14,458
Deposits from central bank	–	–	400	400
Debt securities	–	–	675	675
Derivative financial liabilities	1	–	–	1
Repurchase agreements	–	–	391	391

			31 December 2023
	Fair value
	through
	profit		Amortised
	and loss	FVOCI	cost	Total
	£’million	£’million	£’million	£’million
Assets
Loans and advances to customers	–	–	12,297	12,297
Investment securities	–	476	4,403	4,879
Derivative financial assets	36	–	–	36
Liabilities
Deposits from customers	–	–	15,623	15,623
Deposits from central bank	–	–	3,050	3,050
Debt securities	–	–	694	694
Repurchase agreements	–	–	1,191	1,191

Notes to the consolidated financial statements continued

174

Metro Bank Holdings PLC Annual Report and Accounts 2024

10. Financial instruments continued

Financial assets pledged as collateral

We have pledged £1,034 million (2023: £6,110 million) of the financial assets left as encumbered collateral

which can be called upon in the event of default. Of this, £445 million (2023: £1,311 million) is made up of

high-quality securities and £589 million (2023: £4,799 million) is from our own loan portfolio.

This does not include cash balances pledged as collateral which are shown separately within note 17.

LIBOR replacement

On 1 January 2022 SONIA. (Sterling Overnight Index Average.) replaced LIBOR (London Inter-bank Offered

Rate) as the industry standard sterling interest rate benchmark.

As at 31 December 2024 all of our market-facing derivative flows are executed against SONIA, we hold

£0 million (31 December 2023: £47 million) of mortgages that are either exposed, or revert to synthetic

LIBOR.

11. Cash and balances with other banks

Accounting policy

Cash and balances with other banks consists of both cash on hand and demand deposits, both at

other banks as well as the Bank of England. In addition, it includes highly liquid investments that are

readily convertible to known amounts of cash and which are subject to insignificant risk of changes

in value. Investment securities are only classified as cash equivalents if they have a short maturity

of three months or less from the date of acquisition and are in substance cash equivalents, e.g. debt

investments with fixed redemption dates that are acquired within a short period of their maturity.

Where cash is pledged as collateral and as such is not available on demand this is included within

other assets within note 17.

	31 December	31 December
	2024	2023
	£’million	£’million
Unrestricted balances with the Bank of England	2,585	3,642
Cash and unrestricted balances with other banks	111	191
Money market placements	115	58
Total cash and balances with other banks	2,811	3,891

The expected credit loss held against cash and balances with the Bank of England is £0.1 million

(31 December 2023: £0.1 million).

Notes to the consolidated financial statements continued

175Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

12. Loans and advances to customers

Accounting policy

Loans and advances to customers are classified as held at amortised cost. Our business model is

that customer lending is held to collect cash flows, with no sales expected in the normal course

of business. We aim to offer products with simple terms to customers, and as a result, all loans

comprise solely payments of principal and interest. Loans are initially recognised when cash is

advanced to the borrower at fair value – which is the cash consideration to originate the loan

including any transaction costs – and measured subsequently at amortised cost using the effective

interest rate method, which is detailed further in note 2. Interest on loans is included in the income

statement and is reported as ‘Interest income’. Expected credit losses (ECL) are reported as a

deduction from the carrying value of the loan. Changes to the ECL during the year are recognised

in the income statement as ‘Expected credit loss expense’.

		31 December 2024			31 December 2023
	Gross		Net	Gross		Net
	carrying	ECL	carrying	carrying	ECL	carrying
	amount	allowance	amount	amount	allowance	amount
	£’million	£’million	£’million	£’million	£’million	£’million
Consumer lending	745	(108)	637	1,297	(108)	1,189
Retail mortgages	5,145	(15)	5,130	7,817	(19)	7,798
Commercial lending	3,314	(68)	3,246	3,382	(72)	3,310
Total loans and advances to customers	9,204	(191)	9,013	12,496	(199)	12,297

Further information on the movements in gross carrying amounts and ECL can be found in note 30.

An analysis of the gross loans and advances by product category is set out below:

	31 December	31 December
	2024	2023
	£’million	£’million
Overdrafts	39	40
Credit cards	20	28
Term loans	679	1,219
Consumer auto-finance	7	10
Total consumer lending	745	1,297
Residential owner occupied	3,692	5,851
Retail buy-to-let	1,453	1,966
Total retail mortgages	5,145	7,817
Total retail lending	5,890	9,114
Professional buy-to-let	283	465
Bounce back loans	346	524
Coronavirus business interruption loans	47	86
Recovery loan scheme 1	260	328
Core commercial lending	1,599	1,341
Commercial term loans	2,535	2,744
Overdrafts and revolving credit facilities	220	172
Credit cards	7	4
SME Asset Finance Limited and SME Invoice Finance Limited	552	462
Total commercial lending	3,314	3,382
Gross loans and advances to customers	9,204	12,496

1. Recovery loan scheme includes £45 million acquired from third parties under forward flow arrangements (31 December

2023: £70 million). The loans are held in a trust arrangement in which we hold 99% of the beneficial interest, with the issuer

retaining the remaining 1% (the trust retains the legal title loans).

Notes to the consolidated financial statements continued

176

Metro Bank Holdings PLC Annual Report and Accounts 2024

13. Investment securities

Accounting policy

Our investment securities may be categorised as amortised cost, FVOCI or fair value through profit

and loss. Currently all investment securities are non-complex, with cash flows comprising solely

payments of principal and interest. We hold some securities to collect cash flows; other securities

are held to collect cash flows, and to sell if the need arises (e.g. to manage and meet day-to-day

liquidity needs). Therefore, we have a mixed business model and securities are classified as either

amortised cost or FVOCI as appropriate. We do not categorise any investment securities as fair

value through profit and loss.

Settlement date accounting is used when recording financial asset transactions where a trade is

settled through the regular settlement cycle for that particular investment.

Investment securities held at amortised cost

Investment securities held at amortised cost consist entirely of debt instruments. They are

accounted for using the effective interest method, less any impairment losses.

Investment securities held at FVOCI

Investment securities held at FVOCI consist entirely of debt instruments. Investment securities

held at FVOCI are initially recognised at fair value, which is the cash consideration including any

transaction costs, and measured subsequently at fair value with gains and losses being recognised

in other comprehensive income, except for impairment losses and foreign exchange gains and

losses, until the investment security is derecognised. Interest is calculated using the effective

interest method.

	31 December	31 December
	2024	2023
	£’million	£’million
Investment securities held at FVOCI	377	476
Investment securities held at amortised cost	4,113	4,403
Total investment securities	4,490	4,879

Investment securities held at FVOCI

	31 December	31 December
	2024	2023
	£’million	£’million
Sovereign bonds	149	220
Covered bonds	83	112
Multi-lateral development bank bonds	145	144
Total investment securities held at FVOCI	377	476

Investment securities held at amortised cost

	31 December	31 December
	2024	2023
	£’million	£’million
Sovereign bonds	875	938
Residential mortgage-backed securities	876	954
Covered bonds	478	594
Multi-lateral development bank bonds	1,576	1,729
Asset backed securities	308	188
Total investment securities held at amortised cost	4,113	4,403

Further information on the ECL recognised on investment securities can be found in note 30.

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

14. Property, plant and equipment

Accounting policy

Property, plant and equipment

Our property, plant and equipment primarily consists of investments and improvements in our store

network and is stated at cost less accumulated depreciation and any recognised impairment.

We depreciate property, plant and equipment on a straight-line basis to its residual value using the

following useful economic lives:

Leasehold improvements	Lower of the remaining life of the lease or the
	useful life of the asset
Freehold land	Not depreciated
Buildings	Up to 50 years
Fixtures, fittings and equipment	5 years
IT hardware	3 to 5 years

We keep depreciation rates, methods and the residual values underlying the calculation of

depreciation of items of property, plant and equipment under review to take account of any change

in circumstances.

All items of property, plant and equipment are reviewed at the end of each reporting period for

indicators of impairment.

Right-of-use assets

All of our leases within the scope of IFRS 16 ‘Leases’ (other than those of low value) relate to our

stores and head office properties.

Upon the recognition of a lease liability (see note 22 for further details) a corresponding right-of-

use asset is recognised. This is adjusted for any initial direct costs incurred, lease incentives paid or

received and any restoration costs at the end of the lease (where applicable).

The right-of-use asset is depreciated on a straight-line basis over the life of the lease.

All right-of-use assets are reviewed at the end of each reporting period for indicators of

impairment.

Investment property

Investment property is also stated at cost less accumulated depreciation and any recognised

impairment. Depreciation is calculated on a consistent basis with that applied to land and buildings

as set out above.

				2024
			Freehold	Fixtures,
	Investment	Leasehold	land and	fittings and	IT	Right-of-use
	property	improvements	buildings	equipment	hardware	assets	Total
	£’million	£’million	£’million	£’million	£’million	£’million	£’million
Cost
1 January 2024	12	256	386	23	10	279	966
Additions	–	1	37	–	2	1	41
Disposals	–	–	–	–	–	(25)	(25)
Transfers	–	(13)	13	–	–	–	–
31 December 2024	12	244	436	23	12	255	982
Accumulated depreciation
1 January 2024	8	79	42	21	4	89	243
Depreciation charge	–	5	12	1	4	12	34
Impairments	–	–	–	–	–	1	1
Disposals	–	–	–	–	–	(7)	(7)
Transfers	–	(3)	3	–	–	–	–
31 December 2024	8	81	57	22	8	95	271
Net book value	4	163	379	1	4	160	711

Notes to the consolidated financial statements continued

178

Metro Bank Holdings PLC Annual Report and Accounts 2024

14. Property, plant and equipment continued

				2023
			Freehold	Fixtures,
	Investment	Leasehold	land and	fittings and	IT	Right-of-use
	property	improvements	buildings	equipment	hardware	assets	Total
	£’million	£’million	£’million	£’million	£’million	£’million	£’million
Cost
1 January 2023	12	261	372	22	8	283	958
Additions	–	–	9	1	2	–	12
Disposals	–	–	–	–	–	(4)	(4)
Transfers	–	(5)	5	–	–	–	–
31 December 2023	12	256	386	23	10	279	966
Accumulated depreciation
1 January 2023	8	69	34	20	2	77	210
Depreciation charge	–	13	5	1	2	13	34
Disposals	–	–	–	–	–	(1)	(1)
Transfers	–	(3)	3	–	–	–	–
31 December 2023	8	79	42	21	4	89	243
Net book value	4	177	344	2	6	190	723

Fair value of investment property

Our investment property typically consists of shops and offices which are located within the same

buildings as some of our stores, where we have acquired the freehold interest. As at 31 December 2024

our investment property had a fair value of £4 million (31 December 2023: £4 million). The fair value has

been provided by a qualified independent valuer.

Impairments

During the year, impairment indicators were identified in respect of other items of our property, plant and

equipment. The assets, which included our stores, were tested for impairment. We do not consider

individual stores to be cash generating units (CGU), on the basis that they do not generate sufficiently

independent cash flows. Instead all of our stores and associated assets are deemed to belong to our retail

bank CGU. Further details on the impairment testing of our CGUs can be found in note 15.

The recoverable amount of the retail bank CGU was found to be in excess of its carrying amount and as

such no impairment was recognised.

Transfers

Transfers represent costs associated with the previous improvements made to the two (2023: one) leased

stores which have been purchased during the year.

Contractual commitment for the acquisition of property, plant and equipment

As at 31 December 2024, we had no contractual commitments relating to the acquisition of property,

plant and equipment that are not reflected in the tables (31 December 2023: £nil).

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

15. Intangible assets

Accounting policy

Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration

transferred over our interest in net fair value of the net identifiable assets, liabilities and contingent

liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.

For the purpose of impairment assessment, goodwill acquired in a business combination is

allocated to each of our CGUs, or groups of CGUs, that is expected to benefit from the synergies of

the combination. Each unit or group of units to which the goodwill is allocated represents the lowest

level within the entity at which the goodwill is monitored for internal management purposes.

Goodwill is not amortised, however, it is tested for impairment at the end of each reporting period.

The recoverable amount of a CGU is the higher of its fair value less cost to sell, and the present

value of its expected future cash flows.

If the recoverable amount is less than the carrying value, an impairment loss is charged to the

income statement. Goodwill is stated at cost less accumulated impairment losses. Any impairment

is recognised immediately as an expense and is not subsequently reversed.

Other intangible assets

Software includes both purchased items and internally developed systems, which

consist principally of identifiable and directly associated internal colleague, contractor and other

costs.

Purchased intangible assets and costs directly associated with the development of systems are

capitalised as intangible assets where there is an identifiable asset which we control and which will

generate future economic benefits in accordance with IAS 38 ‘Intangible Assets’.

Costs to establish feasibility or to maintain existing performance are recognised as an expense.

Intangible assets are amortised on a straight-line basis within the income statement using the

following useful economic lives:

Core banking software 1	up to 20 years
Other banking software	3 to 10 years
Software licences	licence period
Brands	5 years

All intangible assets are reviewed at the end of each reporting period for indicators of impairment.

1. Core banking software consists of our central banking transaction platform. The original platform was assessed as

having a 20-year life due to it being the central component of our digital infrastructure. It was upgraded during 2019

with the upgrade assessed as having a 15-year life.

		2024
	Goodwill	Brands	Software	Total
	£’million	£’million	£’million	£’million
Cost
1 January 2024	10	2	355	367
Additions	–	–	19	19
Write-offs	–	–	(85)	(85)
31 December 2024	10	2	289	301
Accumulated amortisation
1 January 2024	–	1	173	174
Amortisation charge	–	–	43	43
Write-offs	–	–	(42)	(42)
31 December 2024	–	1	174	175
Net book value	10	1	115	126

		2023
	Goodwill	Brands	Software	Total
	£’million	£’million	£’million	£’million
Cost
1 January 2023	10	2	338	350
Additions	–	–	26	26
Write-offs	–	–	(9)	(9)
31 December 2023	10	2	355	367
Accumulated amortisation
1 January 2023	–	–	134	134
Amortisation charge	–	1	43	44
Write-offs	–	–	(4)	(4)
31 December 2023	–	1	173	174
Net book value	10	1	182	193

Software

Software consists of both internally generated and externally acquired assets. As at 31 December 2024,

externally acquired licences had a net book value of £5 million (31 December 2023: £9 million). Out of our

total intangible assets, £20 million of software assets were under the course of construction at

31 December 2024 (31 December 2023: £34 million).

Notes to the consolidated financial statements continued

180

Metro Bank Holdings PLC Annual Report and Accounts 2024

15. Intangible assets continued

Write-offs

The write-offs in the year consisted primarily of software and applications that are no longer being used

and are no longer providing any further economic benefits.

Goodwill and impairment testing of cash generating units

An impairment test on the carrying value of the assets in our CGUs has been undertaken. As at 31

December 2024, we had two main CGUs being the retail bank and our SME Asset Finance Limited and

SME Invoice Finance Limited businesses and no changes have been made to our CGUs during the year.

Both of our CGUs contain goodwill and as such are tested annually for impairment. Additional impairment

indicators were identified in relation to the retail bank CGU in relation to both its intangible assets as well

as property, plant and equipment (see note 14).

	31 December
	2024
	£’million
SME Asset Finance Limited and SME Invoice Finance Limited	4
Retail bank	6
Total	10

The recoverable amount for both CGUs was determined by a Value-in-Use (VIU) calculation. The VIU was

higher than their carrying value and therefore no impairment charge has been recognised for the current

year (2023: no charge). The VIU calculation is based on our Board-approved Long-Term Plan which covers

the five year period from 2025 to 2029 inclusive. Our Long-Term Plan is constructed using our best

estimate of the future performance of the business. The plan incorporates market-based forecasts of

interest rates and inflation, loan growth assumptions, costs, and our assessment of the impact of Basel 3.1

regulatory changes. The Long-Term Plan is built on the assumption that we remain appropriately

capitalised to fund our anticipated growth. We have determined that we will be able to meet the

appropriate regulatory requirements, which has been based on an analysis of both our existing and

planned capital structure. This is consistent with the assessment undertaken by the Directors in respect

of assessing viability, which can be found on pages 46 to 47.

The profitability for each CGU per the Long-Term Plan is adjusted for non-cash items (including

depreciation and amortisation), capital expenditure and long-term funding costs (which are reflected in

the discount rate) and certain cash flows which are not permitted to be included under IAS 36, to establish

the cash flows for the VIU. In the outer years beyond the Long-Term Plan period, we have assumed

a terminal growth rate of 2% is reached by year six. The terminal growth rate of 2% represents the

predicted long-term GDP growth rate of the UK economy (the only market both CGUs operate in).

The VIU cash flows are compared to the carrying value of the CGUs, which exclude long term debt.

A pre-tax discount rate of 13.82% (31 December 2023: 14.7%) has been used for the VIU calculation. The

discount rate is based on our post-tax weighted average cost of capital of 11.36% (which is grossed up to a

pre-tax rate), based on the cost of equity and long term debt, weighted by the market value of the equity

and debt.

The VIU is most sensitive to changes in the projected profitability per the Long-Term Plan and the discount

rate applied (which are dependent on the assumptions regarding capital outlined above). If adjusted

independently of all other variables, reasonable changes to the assumption in either of these factors over

the next 12 months would not cause the recoverable of either CGU to fall below its carrying amount.

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

16. Prepayments and accrued income

	31 December	31 December
	2024	2023
	£’million	£’million
Prepayments	36	42
Accrued income 1	56	75
VAT receivable	1	1
Total prepayments and accrued income	93	118
Current portion	93	118
Non-current portion	–	–

1. Includes accrued interest receivable.

17. Other assets

	31 December	31 December
	2024	2023
	£’million	£’million
Cash pledged as collateral	53	50
Amounts owed by group undertaking	1	–
Other 1	28	58
Total other assets	82	108
Current portion	27	55
Non-current portion	55	53

1. Other balance primarily comprises customer transactions in process or items in the course of collection

over year end.

18. Deposits from customers

	31 December	31 December
	2024	2023
	£’million	£’million
Deposits from retail customers	7,753	8,943
Deposits from commercial customers	6,705	6.680
Total deposits from customers	14,458	15,623

	31 December		31 December
	2024		2023
	£’million		£’million
Demand: current accounts	5,791		5,696
Demand: savings accounts	7,53	4	7,827
Fixed term: savings accounts		1,133	2,100
Total deposits from customers		14,458	15,623

As at 31 December 2024, 40% of deposits from customer consisted of instant access current accounts

(31 December 2023: 36%). Fixed term saving accounts made up 8% of balances (31 December 2023: 13%).

19. Deposits from central banks

Deposits from central banks consist of amounts drawn down under the Bank of England’s Term Funding

Scheme with additional incentives for SMEs (TFSME).

	31 December	31 December
	2024	2023
	£’million	£’million
Amounts drawn down under TFSME	400	3,050
Deposits from central banks	400	3,050

The bank repaid £2,650m of TFSME in 2024, with the remaining drawdowns of £400m to mature in 2027.

Notes to the consolidated financial statements continued

182

Metro Bank Holdings PLC Annual Report and Accounts 2024

20. Debt securities

Accounting policy

Debt securities in issue are recognised initially at fair value, being proceeds less transaction costs.

Subsequently, debt securities are measured at amortised cost using the effective interest method.

We assess the criteria for the modification and extinguishment of debt securities in accordance

with IFRS 9. A substantial modification of the terms of an existing financial liability or a part of it

is accounted for as an extinguishment of the original financial liability and the recognition of a

new financial liability. We determine a substantial modification by performing a quantitative and

qualitative prospective assessment.

			Amount
			issued	Coupon		Maturity
Name	Issue date	Currency	£’million	rate	Call date	date
Fixed rate reset callable
(MREL) notes	30/11/2023	GBP	525	12.00%	30/04/28	30/04/29
Fixed rate reset callable
subordinated (Tier 2) notes	30/11/2023	GBP	150	14.00%	30/04/29	30/04/34

	2024	2023
	£’million	£’million
1 January	694	571
Issuances	–	675
Redemption	–	(500)
Haircut	–	(100)
Costs associated with issuance	–	(5)
Movements in micro hedging	(20)	50
Unwind of issuance costs	1	3
31 December	675	694

The fixed rate reset callable notes (MREL), which are listed on the London Stock Exchange, constitute

subordinated and unsecured obligations. The notes have a call date of 30 April 2028, where they may

be redeemed at par. If not called, the interest rate will be reset and fixed based on a benchmark gilt

plus a credit spread of 7.814%. The notes are contractually obliged to mature on the maturity date of

30 April 2029.

The fixed rate reset subordinated callable notes (Tier 2), which are listed on the London Stock Exchange,

constitute subordinated and unsecured obligations. The notes have a call date of 30 April 2029, where

they may be redeemed at par. If not called, the interest rate will be reset and fixed based on a benchmark

gilt plus a credit spread of 9.822%. The notes are contractually obliged to mature on the maturity date of

30 April 2034.

21. Derivatives

Accounting policy

In accordance with our risk management strategy, to the extent not naturally hedged, we use

interest rate swaps to manage our exposure to interest rate risk. On adoption of IFRS 9 we chose to

continue applying the hedge accounting rules set out in IAS 39 ‘Financial Instruments: Recognition

and Measurement’ as we often chose to employ dynamic portfolio hedge accounting of interest

rate risk across fixed rate financial assets and fixed rate financial liabilities.

Where we are using interest rate swaps to hedge the changes in fair value attributable to the

interest rate risk of a recognised asset or liability that could affect profit or loss, we apply fair value

hedge accounting. If there is an effective hedge relationship, the hedged item is adjusted for fair

value changes in respect of the hedged risk. These fair value changes are recognised in the income

statement together with the fair value movements on the hedging instrument (the interest rate

swaps).

Hedge accounting is discontinued when a hedge ceases to be highly effective, a derivative expires

or is sold, the underlying hedged item matures or is repaid, or periodically if a new underlying

hedged item or hedging instrument is added to the hedge relationship. Where a fair value hedge

is de-designated (either due to becoming ineffective or as part of our dynamic approach to hedge

accounting) any hedge adjustments accrued to that point are amortised over the remaining life of

the hedged item.

At the inception of every hedge, we produce hedge documentation which identifies the hedged

risk, hedged item and hedging instrument. This documentation sets out the methodology used for

testing hedge effectiveness.

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

21. Derivatives continued

We use derivatives as part of our approach to hedging interest rate and foreign exchange exposure. Our derivative financial instruments are analysed in the table below.

		31 December 2024			31 December 2023
	Notional	Carrying amount		Notional	Carrying amount
	contract			contract
	amount	Asset	Liability	amount	Asset	Liability
	£’million	£’million	£’million	£’million	£’million	£’million
Interest rate swaps – Designated as hedging instruments	1,253	16	–	1,205	36	–
Interest rate swaps – Designated as held at fair value through profit and loss	502	7	(7)	1,200	31	(31)
Foreign currency swaps – Designated as held at fair value through profit and loss	50	–	(1)	63	–	–
Total	1,805	23	(8)	2,468	67	(31)
Derivative netting	(502)	(7)	7	(1,200)	(31)	31
Grand total	1,303	16	(1)	1,268	36	–

Hedge accounting

Our hedging strategy is driven by micro hedges, where the hedged item is a identifiable asset or liability. The designated risk components of hedged items are benchmark interest rate risk. Other risks such as credit

risk and liquidity risk are managed separately and are not included in the hedge accounting relationship. The changes in the designated risk component usually account for the largest portion of the overall change in

fair value of the hedged item.

Micro fair value hedges

We use this hedging strategy on fixed rate assets and liabilities held at fair value through other comprehensive income and amortised cost as well as on our fixed rate debt issuance.

Hedge ineffectiveness

Hedge ineffectiveness within fair value hedges can occur due to a number of potential sources, such as non-zero derivative designated in a hedge relationship; mismatches between contractual terms such as basis,

timing, principal and notionals; or change in credit risk of interest rate swaps. The total ineffectiveness on our fair value hedges are recognised in note 5.

Offsetting derivatives

The Tier 2 and MREL debt held until renegotiation in late 2023 were designated as hedge items in fair value hedge relationships to manage our exposure to interest rate risk. Following the renegotiation of our debt in

November 2023, these hedge relationships were de-designated. We entered into equal and opposite interest rate swaps with a notional of £600 million to fully offset the interest rate swaps used to hedge the old MREL and

Tier 2 debt securities. Cash flows are offset at a central clearing party and both set of swaps will mature at the same time. Further details are included in note 33.

Master netting arrangement and collateral

We either receive or provide collateral related to our hedging arrangements. As at 31st December 2024, we provided collateral of £1 million (2023: received £11.4 million) which is reflected in note 17 .

Notes to the consolidated financial statements continued

184

Metro Bank Holdings PLC Annual Report and Accounts 2024

21. Derivatives continued

Summary of hedging instruments in designated hedge relationships

The amounts relating to items designated as hedging instruments in fair value hedge relationships to manage our exposure to interest rates are:

		31 December 2024			31 December 2023
	Notional	Carrying amount		Notional	Carrying amount
	contract			contract
	amount	Asset	Liability	amount	Asset	Liability
	£’million	£’million	£’million	£’million	£’million	£’million
Interest rate swaps	1,253	16	–	1,205	36	–
Total derivatives designated as fair value hedges	1,253	16	–	1,205	36	–

Summary of hedged items in designated hedge relationships

The items designated as hedged items in fair value hedge relationships to manage our exposure to interest rates are:

		31 December 2024			31 December 2023
			Accumulated			Accumulated
			amount of fair value			amount of fair value
			hedge adjustments			hedge adjustments
			included in the			included in the
			carrying amount of			carrying amount of
	Carrying amount		the hedged item	Carrying amount		the hedged item
	Assets	Liabilities		Assets	Liabilities
	£’million	£’million	£’million	£’million	£’million	£’million
Fixed rate debt issuance 2	–	(675)	(4)	–	(694)	(24)
Fixed rate investment securities at FVOCI 3	293	–	(8)	238	–	(7)
Fixed rate investment securities at amortised cost 4	271	–	–	271	–	1
Fixed rate loans 1	1	–	–	3	–	–
Total hedges designated as fair value hedges	565	(675)	(12)	512	(694)	(30)

1. Hedged item and the cumulative fair value changes are recorded in loans and advances to customers.

2. Hedged item and the cumulative fair value changes are recorded in debt securities in issue (see note 20).

3. Hedged item and the cumulative fair value changes are recorded in investment securities held at FVOCI.

4. Hedged item and the cumulative fair value changes are recorded in investment securities held at amortised cost.

Summary of ineffectiveness from designated hedge relationships

Total hedge ineffectiveness recognised in profit or loss for the designated fair value hedge relationships is a loss of £2.0 million (2023: gain of £5.6 million).

Notes to the consolidated financial statements continued

185Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

22. Leases

Accounting policy

At the inception of a contract we assess whether the contract contains a lease.

At the commencement of a lease we recognise a lease liability and right-of-use asset (see note 14

for further details). The lease liability is initially measured as the present value of the future lease

payments discounted at the rate implicit in the lease (where available) or our incremental cost of

borrowing. Generally we use our deemed incremental cost of borrowing as the discount rate.

Following initial recognition, the lease liability is measured using the effective interest method.

Where we are reasonably certain to exercise a break in the lease, only the lease payments up until

the date of the break are included.

We subsequently remeasure the lease liability when there is a change to an index or rate used or

when there is a change in expectation that we will exercise a purchase option or break clause or

if we extend the lease. When such an adjustment is made to the lease liability a corresponding

adjustment is made to the right-of-use asset.

Irrecoverable VAT on lease payments is excluded from the lease liability and is taken to the

income statement over the period which it is due. This is included within note 6, General operating

expenses, under ‘occupancy expense’.

We have elected not to recognise a lease liability and right-of-use assets for any leases that have a

term of less than 12 months, or are for an asset which is deemed to be of low value (item is worth

less than £5,000). For these leases, the lease payments are recognised as an expense in the income

statement on a straight-line basis over the life of the lease.

All of our leases within the scope of IFRS 16 (other than those of low value) relate to our stores and

head office properties.

Lease liabilities

	2024	2023
	£’million	£’million
1 January	234	248
Additions and modifications	1	–
Disposals	(20)	(4)
Lease payments made	(22)	(23)
Interest on lease liabilities	12	13
31 December	205	234
Current	19	22
Non-current	186	212

Right-of-use assets

All of our disclosures relating to right-of-use assets, including our accounting policy, can be found in

note 14.

Disposals

The disposals during the year relate to two stores (2023: one store) where we purchased the freehold

during the year. Following the purchase, both the lease liabilities and right-of-use assets relating to the

stores were derecognised. Additionally, we derecognised one of the leases relating to three stores we

closed during 2024 following the surrendering of this lease back to the landlord.

Minimum lease payments

Future undiscounted minimum payments under lease liabilities, exclusive of VAT, as at 31 December are as

follows:

	31 December	31 December
	2024	2023
	£’million	£’million
Within one year	20	22
Due in one to five years	74	83
Due in more than five years	101	145
Total	195	250

Low value and short leases

During the year ended 31 December 2024, £0.04 million (2023: £0.3 million) was recognised in the income

statement with respect to assets of low value or a lease of less than 12 months.

Notes to the consolidated financial statements continued

186

Metro Bank Holdings PLC Annual Report and Accounts 2024

22. Leases continued

Future income due under non-cancellable property leases

We lease out surplus space in some of our properties. The table below sets out the cash payments

expected over the remaining non-cancellable term of each lease, exclusive of VAT.

Receivable

	31 December	31 December
	2024	2023
	£’million	£’million
Within one year	1	1
Due in one to five years	2	3
Due in more than five years	3	3
Total	6	7

Finance lease receivables

Through our SME Asset Finance Limited and SME Invoice Finance Limited businesses we lease a variety of

assets to third parties, which typically consist of plant, machinery and vehicles. These rentals typically

cover the assets’ useful economic life and as such any residual value is minimal. Amounts receivable are

classified as loans and advances to customers and are categorised within our SME Asset Finance Limited

and SME Invoice Finance Limited businesses lending per the breakdown provided in note 12.

	31 December 2024			31 December 2023
	Total future	Unearned		Total future	Unearned
	minimum	finance	Present	minimum	finance	Present
	payments	income	value	payments	income	value
	£’million	£’million	£’million	£’million	£’million	£’million
Within one year	6	(1)	5	6	(1)	5
Due in one to five years	11	(1)	10	10	(1)	9
Due in more than five years	–	–	–	–	–	–
Total	17	(2)	15	16	(2)	14

23. Deferred grants

Accounting policy

Grants are recognised where there is reasonable assurance that we will both receive the grant and

will be able to comply with all the attached conditions. When the grant relates to an expense item,

it is recognised as income on a systematic basis over the periods that the related costs, for which it

is intended to compensate, are expensed. When the grant relates to the purchase of an asset, it is

recognised directly against the cost of the asset.

	2024	2023
	£’million	£’million
1 January	16	17
Released to the income statement	(3)	(1)
31 December	13	16

Our only deferred grant relates to amounts awarded in relation to the Capability and Innovation Fund

which formed part of the RBS alternative remedies programme. The programme was aimed to increase

competition in the UK business banking marketplace.

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

24. Provisions

Accounting policy

We recognise provisions when it is probable that an outflow of economic benefits will be required

to settle a present legal or constructive obligation that has arisen as a result of past events and for

which a reliable estimate can be made. The provision is measured at its current present value.

Provision	Description
Customer	We are committed to doing the right thing but occasionally we identify issues
remediation	that have caused detriment as a result of our actions.
	Where we have to refund costs to customers we provide for this at the point the
	obligation arises. The amounts recognised include any associated interest due.
Dilapidations	Dilapidations provisions are recognised in regard to certain properties we lease.
	The majority of our stores and offices have an automatic right to renewal at
	the end of the lease under the provisions of the Landlord and Tenant Act 1954.
	Where this is the case we do not provide for restorations on these sites since
	we have no intention of vacating at the end of the lease term. For sites that
	are outside the Landlord and Tenant Act 1954, or sites within the Landlord and
	Tenant Act 1954 where we think there is a chance we will vacate a site at the end
	of its lease, a provision is made for dilapidations. The provision is made in line
	with the underlying obligations contained within the lease.
Legal and	Provisions are made relating to the outcome of legal cases and regulatory
regulatory	investigations based on our best estimate of settlement following consultation
	with our lawyers and advisors. The inclusion of a provision does not constitute
	any admission of wrongdoing or legal liability. Details of individual cases are
	provided where these are material to our financial statements and disclosure
	would not be prejudicial to the outcome of the case.
Onerous	Onerous contract provisions are recognised when the unavoidable costs of
contracts	meeting the obligations under the contract exceed the economic benefits we
	expect to be received under it. The provision is recognised as the net cost of
	exiting from the contract, which is the lower of the cost of fulfilling it and any
	compensation or penalties arising from failure to fulfil it.
Restructuring	Restructuring provisions are recognised at the point we have developed
	a detailed formal plan and we have raised a valid expectation that it will
	be implemented. This is typically at the point the plan is announced to affected
	colleagues.
Other provisions	Other provisions consist of other sundry amounts that are provided for in the
	ordinary course of our business.

				2024
		Customer		Onerous	Legal and	Other
	Restructuring	remediation	Dilapidations	contracts	regulatory	provisions	Total
	£’million	£’million	£’million	£’million	£’million	£’million	£’million
1 January 2024	15	3	1	2	–	2	23
Additions	8	–	–	3	–	–	11
Released	(1)	(2)	–	–	–	–	(3)
Utilised	(20)	–	–	–	–	–	(20)
31 December 2024	2	1	1	5	–	2	11

				2023
	Customer		Legal and	Onerous		Other
	remediation	Dilapidations	regulatory	contracts	Restructuring	provisions	Total
	£’million	£’million	£’million	£’million	£’million	£’million	£’million
1 January 2023	1	1	–	2	–	3	7
Additions	2	–	–	–	15	–	17
Released	–	–	–	–	–	(1)	(1)
Utilised	–	–	–	–	–	–	–
31 December 2023	3	1	–	2	15	2	23

No provision has been recognised in relation to any of the contingent liabilities set out in note 32.

All additions for both the current and prior year have been recognised in the income statement, with the

exception of the £2 million provision for dilapidations in 2021 and a further £0.3 million provision for

dilapidations in 2024. This was recognised as an addition to the right-of-use assets (see note 14).

Dilapidations

The amounts provided in respect of dilapidations are calculated based on assessments by an independent

qualified valuer. They represent the best estimate of the present value to restore the site to the condition

required under the lease. As the date restoration is required may be up to 25 years in the future, there is

uncertainty in this estimation. Additionally, for sites that are outside the act, should we be successful in

renewing the lease at the end of its term, it is possible that the provision recognised may not be utilised.

Onerous contract

Onerous contracts primarily relate to the non-rental costs of fulfilling property contracts from which we

will no longer benefit, including closed stores and head office space. The provision is determined with

reference to the occupancy costs from the date of closure through to the next lease break. Rental costs

on these sites from which we will receive no future economic benefits are represented by an impairment

to the right of use asset. The which have either been surrendered back to the landlord or fully sublet for

the remainder of the lease term.

Notes to the consolidated financial statements continued

188

Metro Bank Holdings PLC Annual Report and Accounts 2024

25. Other liabilities

	31 December	31 December
	2024	2023
	£’million	£’million
Trade creditors	1	1
Taxation and social security costs	8	8
Accruals 1	107	146
Deferred income	24	37
Other liabilities	105	75
Total other liabilities	245	267
Current portion	211	253
Non-current portion	34	14

1. Includes accrued interest payable.

26. Called-up share capital

Accounting policy

On issue of new shares, incremental directly attributable costs are shown in equity as a deduction

from the proceeds.

As at 31 December 2024, we had 673.0 million ordinary shares of 0.0001p (31 December 2023:

672.7 million) authorised and in issue.

Called-up ordinary share capital, issued and fully paid

The called-up share capital reserve is used to record our nominal share capital. At 31 December 2024, our

called-up share capital was £672.98 (31 December 2023: £672.68).

	2024	2023
	£’million	£’million
1 January	–	–
Bonus issuance	–	965
Capital reduction	–	(965)
31 December	–	–

Share premium

The share premium reserve is used to record the excess consideration of any shares we have issued over

the nominal share value.

	2024	2023
	£’million	£’million
1 January	144	1,964
Cancellation of Metro Bank PLC share premium	–	(1,964)
Share issuance	–	150
Cost of share issuance	–	(6)
31 December	144	144

Redeemable preference shares

As at 31 December 2024, in addition to the share capital set out above, Metro Bank Holdings PLC has

£50,000 of redeemable preference shares which were issued to Robert Sharpe (Chair) and Daniel

Frumkin (Chief Executive Officer) upon the initial incorporation of the legal entity on 29 September 2022.

As at 31 December 2024, these shares have not yet been redeemed.

Notes to the consolidated financial statements continued

189Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

28. Other reserves

Merger reserve

	2024	2023
	£’million	£’million
1 January	–	–
Issuance of Metro Bank Holdings PLC share capital	–	965
Bonus issuance	–	(965)
31 December	–	–

Share option reserve

The share option reserve is used to record movements in relation to share options awarded under our

Deferred Variable Reward and LTIP.

	2024	2023
	£’million	£’million
1 January	23	20
Equity-settled share-based payment charges (note 7)	2	3
Transfer of b/f share option reserve	(1)	–
31 December	24	23

Fair value though other comprehensive income reserve

The FVOCI reserve is used to record changes in the fair value of investment securities designated at

FVOCI. When investment securities held at FVOCI are sold, any accumulated gains or losses are

transferred to the income statement.

	2024	2023
	£’million	£’million
1 January	(11)	(13)
Changes in fair value	5	3
Deferred tax movements	(1)	(1)
31 December	(7)	(11)

Treasury shares

We have a small number of shares held in treasury relating to awards originally granted to key members of

management in 2016 in recognition of their significant contribution to the successful listing on the London

Stock Exchange. The final tranche of these awards vested in April 2021 and the remaining balance

represents awards that did not vest owing to the original conditions of the grant not being fulfilled. These

are held by an employee benefit trust, which is consolidated within the Bank’s financial statements. The

balance on the reserve is less than £1 million (31 December 2023: less than £1 million) and therefore has

not been separately disclosed as a component of reserves due to its immaterial size.

26. Called-up share capital continued

Insertion of Metro Bank Holdings Plc

As set out in note 1, on 19th May 2023, Metro Bank Holdings PLC became the listed entity and new holding

company of Metro Bank PLC. As part of the insertion of Metro Bank Holdings PLC, the existing listed share

capital and share premium of Metro Bank PLC was cancelled and the share capital and share premium

amounts transferred to retained earnings. Metro Bank PLC subsequently issued the same number of new

unlisted 0.0001p ordinary shares from retained earnings to Metro Bank Holdings PLC. Each existing holder

of Metro Bank PLC share was issued with an equivalent number of new shares in Metro Bank Holdings

PLC, with the nominal value of 0.0001p, as part of a share for share exchange.

The difference between the new nominal share capital in Metro Bank Holdings PLC and the net assets of

Metro Bank PLC was recognised in a merger reserve. This merger reserve was capitalised through the

allotment of 964,505,616 million special shares of 0.0001p each, which were then subsequently reduced

to provide the Metro Bank Holdings PLC with distributable reserves.

In November 2023, we issued 500.0 million of ordinary shares for consideration of £150 million.

Associated costs of £6 million have been offset against the amount raised.

27. Retained earnings

Retained earnings records our cumulative earnings since our formation, including the accumulated

earnings of our subsidiaries since they were acquired.

	2024	2023
	£’million	£’million
1 January	978	(1,015)
Profit for the year	43	29
Cancellation of Metro Bank PLC share capital and share premium	–	1,964
Issuance of Metro Bank Holdings PLC share capital	–	965
Capital reduction of Metro Bank Holdings PLC share capital	–	(965)
Transfer of b/f share option reserve	1	–
31 December	1,022	978

No dividends were paid or declared during the year (2023: none).

Notes to the consolidated financial statements continued

190

Metro Bank Holdings PLC Annual Report and Accounts 2024

29. Share-based payments

Accounting policy

The grant date fair value of options awarded to colleagues is recognised as an expense over

the period in which colleagues become unconditionally entitled to the options. The expense

(representing the value of the services received by us) is measured by reference to the fair value of

the awards granted on the date of the grant. The cost of the colleague services received in respect

of the awards granted is recognised in the consolidated income statement over the period that the

services are received, which is the vesting period. Graded vesting is applied where relevant.

Vesting conditions are limited to service and performance conditions. For performance-based

schemes, the relevant performance measures are projected to the end of the performance period

in order to determine the number of options expected to vest. This estimate of the performance

measures is used to determine the option fair value, discounted to present value. The Group revises

the number of options that are expected to vest, including an estimate of lapses at each reporting

date based on forecast performance measures. The impact of the revision to original estimates, if

any, is recognised in the income statement, with a corresponding adjustment to equity.

The fair value of colleague awards plans is calculated at the grant date using Black-Scholes and

Monte Carlo models. The resulting cost is charged to the income statement over the vesting period.

The value of the charge is adjusted to reflect expected and actual levels of vesting.

We provide share award schemes to colleagues as part of their remuneration packages, and we operate a

number of share-based compensation schemes, namely the DVRP and LTIP. The granting of awards is

designed to provide incentives to colleagues to deliver long-term returns. No individual has a contractual

right to participate in the plans or to receive any guaranteed benefits and the granting of awards remains

at the discretion of the People and Remuneration Committee. Standard share options are granted for no

consideration, are not pensionable and carry no voting rights.

Long Term Incentive Plan

The LTIP is the primary long-term incentive scheme for the members of our ExCo. It was approved by

shareholders at the 2021 AGM. Under the plan, annual awards, based on a percentage of salary, may be

offered. The extent to which an award vests is measured over a three-year period (four years for the initial

awards granted in 2021) against financial targets, which consist of return on tangible equity and relative

total shareholder return, as well as continued employment within the Group.

Deferred Variable Reward Plan

The DVRP was first introduced in 2010 and the latest plan was approved by shareholders at the 2021

AGM. Although originally designed for all colleagues, the plan is now operated for senior managers,

primarily consisting of members of the our ExCo and other Material Risk Takers. Under the current rules

participants are required to defer a proportion of any bonus paid into nominal price awards, a proportion

of which vest immediately and the remainder of which vest over seven years. There are no further

performance conditions on these shares, other than continued employment. All awards under the DVRP

are subject to a one-year holding period; once exercised and all awards have a life of 10 years from the

date of grant.

More information in relation to both the DVRP and LTIP is available within the Remuneration Report.

Awards outstanding

The table below summarises the movements in the number of options outstanding and their weighted

average exercise price:

	2024		2023
		Weighted		Weighted
		average		average
	Number	exercise	Number	exercise
	of options	price	of options	price
	‘000	£	‘000	£
Outstanding at 1 January	16,235	5.24	13,326	6.61
Granted	613	0.00	3,429	0.00 1
Exercised	(559)	0.00	(259)	0.03
Lapsed	(1,278)	7.54	(261)	10.46
Outstanding at 31 December	15,011	5.03	16,235	5.26
Exercisable at 31 December	7,608	9.92	7,931	10.54

1. Nominal price awards with exercise price of 0.0001p.

The average share price during 2024 was 52p (2023: 94p). For share options exercised during the

financial year, the weighted average share price at the date of exercise was 67p (2023: 118p).

All our options are equity settled and we have no legal or constructive obligation to repurchase the shares

or settle the options in cash. Exercises of awards granted are satisfied via the issuance of new shares.

Total share-based compensation charges totalled £2.0 million in the year ended 31 December 2024 (2023:

£3.2 million).

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

29. Share-based payments continued

Fair value of options granted

The number of options outstanding at year end was as follows:

	2024		2023
		Weighted		Weighted
		average		average
	Number	remaining	Number	remaining
	of options	contractual	of options	contractual
Exercise price	‘000	life years	‘000	life years
£0.00 1	9,174	7.7	10,255	8.7
£0.00 2	570	9.6	–	–
£0.93	1,972	5.3	2,011	6.3
£7.9 4	651	4.2	654	5.2
£12.00	–	0.0	–	0.0
£13.00	–	0.0	60	0.2
£13.50	–	0.0	616	0.8
£14.00	194	n/a	194	n/a
£16.00	615	n/a	611	n/a
£20.00	445	1.2	444	2.2
£32.73	633	2.2	633	3.2
£35.36	757	3.2	757	4.2
Total	15,011	6.2	16,235	7.3

1. Nominal price awards with exercise price of 0.0001p.

2. Nominal price awards with exercise price of 0.001p.

The total fair value of options granted in 2024 was £0.4 million (2023: £3.4 million), based on the following

assumptions:

	2024
	awards
Risk-free interest rate	4.19% to 4.77%
Expected life	1 to 7 years
Volatility	176%
Expected dividend yield	nil
Share price at grant date	£0.31
Exercise price	£0.00

Volatility has been estimated by taking our share price volatility since we listed in 2016.

An assumption is also made in respect of how many shares will lapse due to the vesting criteria not being

met. For the awards granted post 2023, as these were only made to members of the ExCo and other

Material Risk Takers, the lapse assumption has been set at 0%. The fair value charges recognised in the

income statement for these scheme are adjusted annually to reflect actual lapses. For all other schemes

the lapse assumption is updated annually.

Notes to the consolidated financial statements continued

192

Metro Bank Holdings PLC Annual Report and Accounts 2024

30. Expected credit losses

Accounting policy

We assess on a forward-looking basis the ECL associated with the assets carried at amortised cost and FVOCI and recognise a loss allowance for such losses at each reporting date.

Impairment provisions are driven by changes in the credit risk of loans and securities, with a provision for lifetime ECL recognised where the risk of default of an instrument has increased significantly. Risk of

default and ECL must incorporate forward-looking and macroeconomic information.

Loans and advances

Impairment models have been developed for our retail and commercial loan portfolios, with three core models: revolving products; fixed term loans; and mortgages. Expected credit losses are calculated for

drawn loans, and for committed lending.

The same broad calculation approach is applied for each core model. ECL are calculated by multiplying three main components, being the Probability of Default (PD), Loss Given Default (LGD) and the Exposure

at Default (EAD), discounted at the original effective interest rate.

Key model inputs, judgements and estimates include:

• consideration of when a SICR occurs

• PD, LGD and EAD as well as their modelled impact

• macroeconomic scenarios and weightings applied.

Significant increase in credit risk

IFRS 9 requires a higher level of ECL to be recognised for underperforming loans. This is considered based on a staging approach:

Stage	Description	ECL recognised
Stage 1	Financial assets that have had no significant increase in credit risk since initial recognition	12-month ECL
	or that have low credit risk (high quality investment securities only) at the reporting date.	Total losses expected on defaults which may occur within the next 12 months. Losses are
		adjusted for probability-weighted macroeconomic scenarios.
Stage 2	Financial assets that have had a significant increase in credit risk since initial recognition	Lifetime ECL
	but that do not have objective evidence of impairment.	Losses expected on defaults which may occur at any point in a loan’s lifetime. Losses are
		adjusted for probability-weighted macroeconomic scenarios.
Stage 3	Financial assets that are credit impaired at the reporting date.	Lifetime ECL
	A financial asset is credit impaired when it has met the definition of default. We define	Losses expected on defaults which may occur at any point in a loan’s lifetime. Losses are
	default to have occurred when a loan is greater than 90 days past due or where the	adjusted for probability-weighted macroeconomic scenarios.
	borrower is considered unlikely to pay.	Interest income is calculated on the carrying amount of the loan net of credit allowance.
POCI	Financial assets that have been purchased and had objective evidence of being non-	Lifetime ECL
	performing or credit impaired at the point of purchase.	At initial recognition, POCI assets do not carry an impairment allowance. Lifetime ECL
		are incorporated into the calculation of the asset’s effective interest rate. Subsequent
		changes to the estimate of lifetime ECL are recognised as a loss allowance.

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Accounting policy continued

A SICR may be identified in a number of ways:

• Quantitative criteria — where the numerically calculated PD on a loan has increased significantly since initial recognition. This is assessed using detailed models which assess whether the lifetime PD at

observation is greater than the lifetime PD at origination by a portfolio specific threshold. Given the different nature of the products and the dissimilar level of lifetime PDs at origination, we implement

different thresholds by sub-products within each portfolio (term loans, revolving loan facilities and mortgages). The threshold is set at three times the median PD of the portfolio at origination.

• Qualitative criteria — instruments that are 30 days past due or more are allocated to Stage 2, regardless of the results of the quantitative analysis. In addition, instruments classified on the Early Warning List as

higher risk are allocated to Stage 2, regardless of the results of the quantitative analysis.

A loan will be considered to be ‘non-performing’ or ‘credit impaired’ when it meets our definition of default — that is to say, the loan is 90 days past due, or the borrower is considered unlikely to pay without

realisation of collateral. Unlikeliness to pay is assessed through the presence of triggers including the loan being in repossession, the customer having been declared bankrupt, or evidence of financial distress

leading to forbearance.

A loan may also be considered to be non-performing when it is subject to forbearance measures, consisting of concessions in relation to either:

• a modification of the previous terms and conditions of the loan which the borrower is not considered able to comply with

• a total or partial refinancing of a troubled debt contract that would not have been granted had the borrower not been in financial difficulties.

It may not be possible to identify a single discrete event which defines an asset as ‘non-performing’ or ‘credit impaired’. Instead, the combined effect of several events may cause financial assets to become

credit impaired.

Where an asset which has been classified as Stage 3 is showing improving trends and is no longer considered non-performing or credit impaired, a probation period of at least three consecutive months during

which the instrument should meet the criteria for exiting default must elapse before it is transferred to Stage 2.

Probability of default

PD represents the likelihood of a borrower defaulting on its financial obligation either over the next 12 months (for Stage 1 accounts), or over the remaining lifetime of the loan (for Stage 2 and 3 accounts).

A PD is calculated for all loans based on historical data and incorporates:

• credit quality scores

• life cycle trends depending on a loan’s vintage

• factors indicating the quality of the vintage

• characteristics of the current and future economic environment.

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Accounting policy continued

Loss given default

LGD represents our expectation of the extent of a loss on a defaulted exposure and is expressed as a percentage considering expected recoveries on defaulted accounts. LGD rates have been modelled

considering a range of inputs, including:

• value of collateral on secured portfolios — a key driver of the expected recovery in the event of default

• expected haircut applied to the collateral value to reflect a forced sale discount

• price index forecasts applied to project collateral values into the future

• stress factors based on macroeconomic scenarios.

Exposure at default

This is the amount that we expect to be owed at the point of default. This is subject to judgement since a balance will not necessarily remain static between the balance sheet date and the point of expected

default. For example:

• interest should be accrued

• repayments may be received

• for a revolving product, further drawings may be taken between the current point in time and the point of default

• estimations of these factors will be incorporated into our estimate of EAD.

Retail PD, LGD and EAD are calculated and applied at an individual account level for secured lending. For unsecured lending, PD and EAD are calculated and applied at an individual account level, whilst LGD is

assessed at a portfolio level and applied to accounts on an individual basis.

Commercial PD and LGD for secured lending are calculated at a counterparty level, then applied at an account level. For commercial unsecured lending, LGD is assessed at a portfolio level and applied to

accounts on an individual basis. Commercial EAD is calculated and applied at account level.

Macroeconomic scenarios

The ECL recognised in the financial statements reflects the effect on ECL of a range of possible outcomes, calculated on a probability-weighted basis, based on a number of economic scenarios and

including management overlays where required. These scenarios are representative of our view of forecast economic conditions, sufficient to calculate unbiased ECL, and are designed to capture material

‘non-linearities’ (i.e. where the increase in credit losses if conditions deteriorate exceeds the decrease in credit losses if conditions improve).

In the normal course of business, we use four scenarios. These represent a ‘most likely outcome’, the ‘Baseline’ scenario, and three, less likely, ‘Outer’ scenarios, referred to as an ‘Upside’, a ‘Downside’ and a

‘Severe Downside’ scenario respectively. The Baseline scenario captures the most likely economic future; the Downside and Severe Downside scenarios reflect adverse economic conditions; and the Upside

scenario presents more favourable economic conditions.

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Accounting policy continued

Key scenario assumptions are set using data sourced from independent external economists. This helps ensure that the IFRS 9 scenarios are unbiased and maximise the use of independent information.

The following assumptions, considered to be the key drivers of ECL, have been used for the scenarios applied as at 31 December 2024 and 31 December 2023:

• UK interest rates (Bank of England base rate and five-year mortgage rate)

• UK unemployment rates

• UK HPI changes, year on year

• UK GDP changes, year on year

• UK commercial real estate index, year on year.

Macroeconomic scenarios impact the ECL calculation through varying PDs and LGDs. We use UK HPI to index mortgage collateral which has a direct impact on LGDs. Other metrics are considered to have a

direct impact on PDs and were selected following a search and data calibration exercise of possible drivers. A list of around fifteen potential drivers were initially considered, representing drivers which capture

trends in the economy at large, and may indicate economic trends which will impact UK borrowers. The list included variables which impact economic output, interest rates, inflation, share prices, borrower

income and the UK housing market. An algorithm was then used to choose the subset of drivers which had the greatest significance and predictive fit to our data.

Each scenario was determined by flexing the Baseline scenario, taking into account a number of factors in the global and UK economy such as commodity prices, global interest rates, UK investment spend and

exchange rates, as well as the possible impact of recessionary conditions or financial shocks. A simulation process was designed to determine the weighting to apply to each scenario based on its severity and

the range of possible scenarios for which that scenario was representative. A summary of each scenario and weighting used at 31 December 2024 is as follows:

• Baseline scenario: Reflects the projection of the median, or ‘50%’ scenario, meaning that in the assessment there is an equal probability that the economy might perform better or worse than the baseline

forecast

• Upside scenario: This above-baseline scenario is designed so there is a 10% probability the economy will perform better than in this scenario, and a 90% probability it will perform worse

• Downside scenario: In this recession scenario, in which a deep downturn develops, there is a 90% probability the economy will perform better, and a 10% probability it will perform worse

• Severe Downside scenario: In this recession scenario, in which a deep downturn develops, there is a 96% probability the economy will perform better, and a 4% probability it will perform worse.

These assumptions are considered sufficient to capture any material non-linearities.

The weightings applied to each scenario at 31 December 2024 were Baseline – 50%, Upside – 20%, Downside – 25% and Severe Downside scenario – 5% (31 December 2023: Baseline – 50%, Upside – 20%,

Downside – 25% and Severe Downside scenario – 5%).

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Accounting policy continued

Economic variable assumptions

The year-end assumptions used for the ECL estimate as at 31 December 2024 and 31 December 2023 are as follows:

			31 December 2024				31 December 2023
		2025	2026	2027	2028	2024	2025	2026	2027
Interest rates (%) –	Baseline	4.5%	4.2%	3.9%	4.0%	5.1%	4.7%	4.3%	4.2%
five-year mortgage rate	Upside	4.7%	4.3%	4.0%	4.0%	5.3%	4.7%	4.3%	4.2%
	Downside	3.5%	2.4%	2.4%	3.1%	3.7%	2.7%	2.6%	2.6%
	Severe downside	2.8%	2.1%	2.0%	2.4%	3.3%	2.2%	2.2%	2.2%
UK unemployment (%)	Baseline	4.4%	4.5%	4.6%	4.7%	4.6%	4.7%	4.7%	4.8%
	Upside	3.8%	3.6%	3.8%	4.1%	4.1%	3.8%	3.9%	4.2%
	Downside	6.3%	7. 2%	7. 3%	6.9%	6.5%	7.4%	7.4%	7.0%
	Severe downside	7.5%	8.3%	8.2%	8.0%	7.7 %	8.5%	8.4%	8.1%
UK HPI –	Baseline	2.2%	3.9%	2.6%	1.5%	(6.2%)	3.1%	4.7%	2.6%
% change year-on-year	Upside	16.6%	7.0%	0.1%	(2.6%)	7.0%	6.3%	2.1%	(1.5%)
	Downside	(9.0%)	(5.6%)	1.9%	4.2%	(16.5%)	(6.3%)	4.0%	5.4%
	Severe downside	(15.2%)	(9.6%)	2.3%	2.9%	(22.2%)	(10.3%)	4.4%	4.1%
UK GDP –	Baseline	2.1%	1.2%	2.1%	1.4%	0.4%	1.0%	1.3%	1.4%
% change year-on-year	Upside	5.6%	1.4%	2.0%	1.5%	3.9%	1.2%	1.3%	1.4%
	Downside	(3.5%)	1.5%	3.3%	1.4%	(5.6%)	1.3%	2.6%	1.4%
	Severe downside	(4.6%)	0.1%	4.6%	2.3%	( 7.1%)	(0.2%)	4.2%	2.4%
UK commercial real estate index,	Baseline	(0.9%)	0.4%	(0.3%)	(1.3%)	(4.2%)	0.8%	1.7%	(0.4%)
year-on-year – % change	Upside	14.4%	2.3%	(3.3%)	(5.2%)	10.1%	3.3%	(1.3%)	(4.3%)
	Downside	(16.0%)	(5.6%)	0.8%	2.0%	(18.7%)	(5.3%)	3.0%	3.4%
	Severe downside	(25.1%)	(8.5%)	2.6%	1.2%	(26.9%)	( 7.4%)	4.9%	2.6%
BoE Interest Rate (%)	Baseline	4.1%	2.8%	2.5%	2.5%	4.6%	2.7%	2.3%	2.3%
	Upside	4.3%	3.0%	2.6%	2.5%	4.8%	2.7%	2.3%	2.3%
	Downside	2.7%	1.1%	1.4%	1.7%	3.2%	1.0%	1.2%	1.5%
	Severe downside	2.1%	0.8%	0.8%	0.9%	2.6%	0.7%	0.5%	0.7%

Following the initial four-year projection period, the Upside, Downside and Severe Downside scenarios converge to the Baseline scenario. The rate of convergence varies based on the macroeconomic factor,

but at a minimum convergence takes place three years from the initial four-year projection period. We recognise that applying the above scenarios will not always be sufficient to determine an appropriate ECL

in all economic environments. The scenarios applied comprise our best estimate of economic impacts on the ECL, and the actual outcome may be significantly different.

Investment securities and other financial assets

Impairment provisions have been calculated based on our best estimate of ECL on other assets classified and measured at amortised cost and fair value through other comprehensive income. These include

investment securities, cash held at banks and other financial assets. These impairment provisions are not material.

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Critical accounting judgement

Measurement of the expected credit loss allowance

The measurement of ECL is complex and involves the use of significant judgements. We consider that the following represent key judgements in respect of the measurement of the ECL.

Significant increase in credit risk

IFRS 9 requires a higher level of ECL to be recognised for under-performing loans as a lifetime ECL is recognised compared to a 12-month ECL for performing loans. This is considered based on a staging

approach. Financial assets that have had no SICR since initial recognition, or that have low credit risk at the reporting date, are considered to be performing loans and are classified as ‘Stage 1’. Losses are

calculated based on our expectation of defaults which may occur within the next 12 months. Assets which are considered to have experienced a SICR since initial recognition, but that do not have objective

evidence of impairment, are classified as ‘Stage 2’. Losses are calculated based on defaults which may occur at any point in the asset’s lifetime.

Judgement is required to determine when a SICR has occurred. An assessment of whether credit risk has increased significantly since initial recognition, resulting in transfer to Stage 2, is performed at each

reporting period by considering the change in the PD expected over the remaining life of the financial instrument. The assessment explicitly or implicitly compares the PD occurring at the reporting date

compared to that at initial recognition, taking into account reasonable and supportable information, including information about past events, current conditions and future economic conditions.

Use of Post Model Adjustments and Overlays

We have applied expert judgement to the measurement of the ECL in the form of Post Model Adjustments (PMAs) and Management Overlays (MOs).

Post Model Adjustments

PMAs refer to increases/decreases in ECL to address known model limitations, either in model methodology or model inputs. These rely on analysis of model inputs and parameters to determine the change

required to improve model accuracy. These may be applied at an aggregated level, however they will usually be applied at account level.

Model Overlays

MOs reflect management judgement. These rely more heavily on expert judgement and will usually be applied at an aggregated level. For example, where recent changes in market and economic conditions

have not yet been captured in the macroeconomic factor inputs to models (e.g., industry – specific stress event).

The appropriateness of PMAs and MOs is subject to rigorous review and challenge, including review by the Audit Committee (see page 66).

ECL assessment

We have applied PMAs in the assessment of ECL. PMAs supplement the models to account for where there are limitations in model methodology or data inputs and/or to mitigate downsides risks which are not

fully captured through the economic scenarios. The appropriateness of PMAs has been subject to rigorous review and challenge, including review by our Model Governance Committee, Impairment Committee

and Audit Committee.

The level of PMAs has reduced in 2024 with the total percentage of ECL stock standing at 10% as at 31 December 2024 (31 December 2023: 12%). There are no MOs being used as at 31 December 2024.

PMAs have been reassessed during the financial year to ensure an appropriate level of ECL to account for the high level of macroeconomic uncertainty, following the cost of living pressures, higher interest

rates, and potential property price falls.

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Critical accounting judgement continued

PMAs make up £18.7 million of the ECL stock as at 31 December 2024 (31 December 2023: £23.4 million) and comprise:

• Macroeconomic correlation uncertainty — This PMA was raised in Q4 2024 to reflect the uncertainty risk and the potential adverse effects of significant government support that was in place during and

following the Covid period and the subsequent growth in SME debt which may not be fully reflected in model outputs (31 December 2024: £11.5 million; 31 December 2023: nil).

• Significant increase in credit risk (SICR) adjustment overlay — The SICR model for the RateSetter portfolio is resulting in an overstatement of Stage 2 assets and a negative PMA is in place to account for this.

These overlays will be removed once the IFRS9 PD Annual Model Review is validated and implemented into production. The value of the PMA has reduced significantly during 2024 as a result of the rundown

of the portfolio (31 December 2024: £2.2 million; 31 December 2023: £7.4 million).

• CRE adjustment — Reflects potential downside risk in property price indices beyond the latest scenarios for the commercial property portfolios (31 December 2024: £0.7 million; 31 December 2023:

£3.4 million).

• Climate change impact — This adjustment was originally raised in 2021 has been revised for FY 2024 and reflects the impact of climate change on property values for the mortgage and commercial portfolios

(31 December 2024: £2.8 million; 31 December 2023: £3.2 million). The slight reduction in the overlay since December 2023 is due to the updated balance movements for all portfolios across the year.

• Mortgage model enhancements — A PMA reflects the new IFRS9 Mortgage PD and Staging models. This overlay will be removed once the IFRS9 PD Annual Model Reviews are validated and implemented into

production (31 December 2024: £2.9 million; 31 December 2023: £4.7 million).

• Commercial model enhancements — An overlay is held in anticipation of remaining model adjustments for the commercial portfolio (31 December 2024: £4.6 million; 31 December 2023: £3.5 million).

The increase in the overlay over the period is to reflect the impact from the Business Overdrafts portfolio growth which utilises the IFRS9 commercial models as a proxy for ECL assessment.

• Government guaranteed loans LGD adjustment — a £1.6m negative PMA was raised for December 2024 month end (31 December 2023: Nil) in anticipation of changes to the LGD model.

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Expected credit loss expense

	2024	2023
	£’million	£’million
Retail mortgages 1	(4)	(1)
Consumer lending 1	–	33
Commercial lending 1	(4)	(20)
Investment securities	–	1
Write-offs and other movements	15	20
Total expected credit loss expense	7	33

1. Represents the movement in ECL allowance during the year and therefore excludes write-offs which are shown separately.

Investment securities

All investment securities held at FVOCI are deemed to be in Stage 1. Any credit loss allowance is, however, included as part of the revaluation amount in the FVOCI reserve. At 31 December 2024, the loss allowance

included within the FVOCI reserve is £0.1 million (31 December 2023: £0.1 million).

All investment securities held at amortised cost are deemed to be in Stage 1. The total ECL expense recognised for these assets at 31 December 2024 is £0.6 million (31 December 2023: £0.9 million).

Collateral

Collateral is usually held in the form of real estate, guarantees, debentures and other loans that we can call upon in the event of the borrower defaulting. At 31 December 2024, 80% (31 December 2023: 80%) of our

loans consisted of retail mortgages and commercial term loans secured on collateral, with average debt-to-value of 59% (31 December 2023: 58%) and 56% (31 December 2023: 55%) respectively. A further 4% (31

December 2023: 4%) of our lending portfolio consists of BBLS, which although they do not have any collateral are 100% guaranteed by the Government. Further details on the collateral of our loans can be found in the

Risk report.

Write-off policy

We write off financial assets (either partially or fully) when there is no realistic expectation of receiving further payment from the customer. Indicators that there is no reasonable expectation of recovery include debt

sale to a third party and ceasing enforcement activity. We may write off financial assets that are still subject to enforcement activity.

Modification of financial assets

We sometimes renegotiate the terms of loans provided to customers with a view to maximising recovery. The modifications have not led to any material modification gains or losses being recognised.

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The following tables explain the changes in both the gross carrying amount and loss allowances of our loans and advances during the year.

		Gross carrying amount						Loss allowance					Net carrying amount
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total		Stage 1	Stage 2	Stage 3	POCI	Total
1 January 2024	10,596	1,511	389	–	12,496	(63)	(43)	(93)	–	(199)		10,533	1,468	296	–	12,297
Transfers to/(from) Stage 1 1	385	(368)	(17)	–	–	(11)	10	1	–	–		374	(358)	(16)	–	–
Transfers to/(from) Stage 2	(409)	416	(7)	–	–	2	(2)	–	–	–		(407)	414	(7)	–	–
Transfers to/(from) Stage 3	(192)	(100)	292	–	–	4	7	(11)	–	–		(188)	(93)	281	–	–
Net remeasurement due to transfers 2	–	–	–	–	–	9	(14)	(40)	–	(45)		9	(14)	(40)	–	(45)
New lending 3	1,716	147	1	–	1,864	(11)	(3)	(1)	–	(15)		1,705	144	–	–	1,849
Repayments, additional drawdowns and interest accrued	(618)	(121)	(33)	(1)	(773)	–	–	–	–	–		(618)	(121)	(33)	(1)	(773)
Derecognitions 4	(3,755)	(507)	(121)	–	(4,383)	11	11	20	–	42		(3,744)	(496)	(101)	–	(4,341)
Changes to model assumptions 5	–	–	–	–	–	20	5	–	1	26		20	5	–	1	26
31 December 2024	7,723	978	504	(1)	9,204	(39)	(29)	(124)	1	(191)	7,68	4	949	380	–	9,013
Off-balance sheet items
Commitments and guarantees 6					718					–						718

		Gross carrying amount						Loss allowance				Net carrying amount
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total
1 January 2023	10,849	2,088	352	–	13,289	(66)	(51)	(70)	–	(187)	10,783	2,037	282	–	13,102
Transfers to/(from) Stage 1 1	872	(857)	(15)	–	–	(15)	15	–	–	–	857	(842)	(15)	–	–
Transfers to/(from) Stage 2	(581)	589	(8)	–	–	4	(6)	2	–	–	(577)	583	(6)	–	–
Transfers to/(from) Stage 3	(170)	(71)	241	–	–	3	4	(7)	–	–	(167)	(67)	234	–	–
Net remeasurement due to transfers 2	–	–	–	–	–	12	(13)	(38)	–	(39)	12	(13)	(38)	–	(39)
New lending 3	2,060	239	16	–	2,315	(18)	(6)	(6)	–	(30)	2,042	233	10	–	2,285
Repayments, additional drawdowns and interest accrued	(685)	(172)	(40)	–	(897)	–	–	–	–	–	(685)	(172)	(40)	–	(897)
Derecognitions 4	(1,749)	(305)	(157)	–	(2,211)	13	10	26	–	49	(1,736)	(295)	(131)	–	(2,162)
Changes to model assumptions 5	–	–	–	–	–	4	4	–	–	8	4	4	–	–	8
31 December 2023	10,596	1,511	389	–	12,496	(63)	(43)	(93)	–	(199)	10,533	1,468	296	–	12,297
Off-balance sheet items
Commitments and guarantees 6					718					–					718

1. Represents stage transfers prior to any ECL remeasurements.

2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer. In addition it includes any ECL change resulting from model assumptions and forward-looking information on these loans.

3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed as well as any ECL that has been recognised in relation to these loans during the year.

4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, sold or written off.

5. Represents the change in ECL to those loans that remain within the same stage through the year.

6. Represents undrawn lending facilities. Further details can be found in note 31.

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Retail mortgages

		Gross carrying amount						Loss allowance				Net carrying amount
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total
1 January 2024	6,887	784	146	–	7,817	(7)	(6)	(6)	–	(19)	6,880	778	140	–	7,798
Transfers to/(from) Stage 1	146	(138)	(8)	–	–	(1)	1	–	–	–	145	(137)	(8)	–	–
Transfers to/(from) Stage 2	(171)	173	(2)	–	–	–	–	–	–	–	(171)	173	(2)	–	–
Transfers to/(from) Stage 3	(53)	(46)	99	–	–	–	1	(1)	–	–	(53)	(45)	98	–	–
Net remeasurement due to transfers	–	–	–	–	–	1	(1)	(2)	–	(2)	1	(1)	(2)	–	(2)
New lending	728	126	–	–	854	(1)	(2)	–	–	(3)	727	124	–	–	851
Repayments, additional drawdowns and interest accrued	(113)	(12)	1	–	(124)	–	–	–	–	–	(113)	(12)	1	–	(124)
Derecognitions	(3,066)	(303)	(33)	–	(3,402)	3	2	2	–	7	(3,063)	(301)	(31)	–	(3,395)
Changes to model assumptions	–	–	–	–	–	1	1	–	–	2	1	1	–	–	2
31 December 2024	4,358	584	203	–	5,145	(4)	(4)	(7)	–	(15)	4,354	580	196	–	5,130

		Gross carrying amount						Loss allowance				Net carrying amount
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total
1 January 2023	6,195	1,343	111	–	7,649	(6)	(11)	(3)	–	(20)	6,189	1,332	108	–	7,629
Transfers to/(from) Stage 1	745	(737)	(8)	–	–	(6)	6	–	–	–	739	(731)	(8)	–	–
Transfers to/(from) Stage 2	(193)	199	(6)	–	–	–	–	–	–	–	(193)	199	(6)	–	–
Transfers to/(from) Stage 3	(38)	(29)	67	–	–	–	–	–	–	–	(38)	(29)	67	–	–
Net remeasurement due to transfers	–	–	–	–	–	5	(2)	(2)	–	1	5	(2)	(2)	–	1
New lending	1,195	147	1	–	1,343	(1)	(1)	–	–	(2)	1,194	146	1	–	1,341
Repayments, additional drawdowns and interest accrued	(177)	(18)	–	–	(195)	–	–	–	–	–	(177)	(18)	–	–	(195)
Derecognitions	(840)	(121)	(19)	–	(980)	1	1	–	–	2	(839)	(120)	(19)	–	(978)
Changes to model assumptions	–	–	–	–	–	–	1	(1)	–	–	–	1	(1)	–	–
31 December 2023	6,887	784	146	–	7,817	(7)	(6)	(6)	–	(19)	6,880	778	140	–	7,798

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

30. Expected credit losses continued

Consumer lending

		Gross carrying amount						Loss allowance				Net carrying amount
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total
1 January 2024	906	314	77	–	1,297	(26)	(16)	(66)	–	(108)	880	298	11	–	1,189
Transfers to/(from) Stage 1	80	(79)	(1)	–	–	(3)	3	–	–	–	77	(76)	(1)	–	–
Transfers to/(from) Stage 2	(74)	74	–	–	–	1	(1)	–	–	–	(73)	73	–	–	–
Transfers to/(from) Stage 3	(27)	(14)	41	–	–	1	4	(5)	–	–	(26)	(10)	36	–	–
Net remeasurement due to transfers	–	–	–	–	–	2	(4)	(25)	–	(27)	2	(4)	(25)	–	(27)
New lending	4	–	–	–	4	–	–	–	–	–	4	–	–	–	4
Repayments, additional drawdowns and interest accrued	(226)	(83)	(10)	(1)	(320)	–	–	–	–	–	(226)	(83)	(10)	(1)	(320)
Derecognitions	(167)	(59)	(10)	–	(236)	4	2	9	–	15	(163)	(57)	(1)	–	(221)
Changes to model assumptions	–	–	–	–	–	9	3	(1)	1	12	9	3	(1)	1	12
31 December 2024	496	153	97	(1)	745	(12)	(9)	(88)	1	(108)	484	144	9	–	637

		Gross carrying amount						Loss allowance				Net carrying amount
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total
1 January 2023	1,180	250	50	–	1,480	(21)	(12)	(42)	–	(75)	1,159	238	8	–	1,405
Transfers to/(from) Stage 1	34	(34)	–	–	–	(2)	2	–	–	–	32	(32)	–	–	–
Transfers to/(from) Stage 2	(182)	182	–	–	–	2	(2)	–	–	–	(180)	180	–	–	–
Transfers to/(from) Stage 3	(35)	(9)	44	–	–	1	2	(3)	–	–	(34)	(7)	41	–	–
Net remeasurement due to transfers	–	–	–	–	–	2	(6)	(28)	–	(32)	2	(6)	(28)	–	(32)
New lending	311	78	7	–	396	(9)	(4)	(6)	–	(19)	302	74	1	–	377
Repayments, additional drawdowns and interest accrued	(217)	(111)	(10)	–	(338)	–	–	–	–	–	(217)	(111)	(10)	–	(338)
Derecognitions	(185)	(42)	(14)	–	(241)	3	2	12	–	17	(182)	(40)	(2)	–	(224)
Changes to model assumptions	–	–	–	–	–	(2)	2	1	–	1	(2)	2	1	–	1
31 December 2023	906	314	77	–	1,297	(26)	(16)	(66)	–	(108)	880	298	11	–	1,189

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

30. Expected credit losses continued

Commercial lending

		Gross carrying amount						Loss allowance				Net carrying amount
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total
1 January 2024	2,803	413	166	–	3,382	(30)	(21)	(21)	–	(72)	2,773	392	145	–	3,310
Transfers to/(from) Stage 1	159	(151)	(8)	–	–	(7)	6	1	–	–	152	(145)	(7)	–	–
Transfers to/(from) Stage 2	(164)	169	(5)	–	–	1	(1)	–	–	–	(163)	168	(5)	–	–
Transfers to/(from) Stage 3	(112)	(40)	152	–	–	3	2	(5)	–	–	(109)	(38)	147	–	–
Net remeasurement due to transfers	–	–	–	–	–	6	(9)	(13)	–	(16)	6	(9)	(13)	–	(16)
New lending	984	21	1	–	1,006	(10)	(1)	(1)	–	(12)	974	20	–	–	994
Repayments, additional drawdowns and interest accrued	(279)	(26)	(24)	–	(329)	–	–	–	–	–	(279)	(26)	(24)	–	(329)
Derecognitions	(522)	(145)	(78)	–	(745)	4	7	9	–	20	(518)	(138)	(69)	–	(725)
Changes to model assumptions	–	–	–	–	–	10	1	1	–	12	10	1	1	–	12
31 December 2024	2,869	241	204	–	3,314	(23)	(16)	(29)	–	(68)	2,846	225	175	–	3,246

		Gross carrying amount						Loss allowance				Net carrying amount
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total
1 January 2023	3,474	495	191	–	4,160	(39)	(28)	(25)	–	(92)	3,435	467	166	–	4,068
Transfers to/(from) Stage 1	93	(86)	(7)	–	–	(7)	7	–	–	–	86	(79)	(7)	–	–
Transfers to/(from) Stage 2	(206)	208	(2)	–	–	2	(4)	2	–	–	(204)	204	–	–	–
Transfers to/(from) Stage 3	(97)	(33)	130	–	–	2	2	(4)	–	–	(95)	(31)	126	–	–
Net remeasurement due to transfers	–	–	–	–	–	5	(5)	(8)	–	(8)	5	(5)	(8)	–	(8)
New lending	554	14	8	–	576	(8)	(1)	–	–	(9)	546	13	8	–	567
Repayments, additional drawdowns and interest accrued	(291)	(43)	(30)	–	(364)	–	–	–	–	–	(291)	(43)	(30)	–	(364)
Derecognitions	(724)	(142)	(124)	–	(990)	9	7	14	–	30	(715)	(135)	(110)	–	(960)
Changes to model assumptions	–	–	–	–	–	6	1	–	–	7	6	1	–	–	7
31 December 2023	2,803	413	166	–	3,382	(30)	(21)	(21)	–	(72)	2,773	392	145	–	3,310

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

30. Expected credit losses continued

Credit risk exposures

Total lending

		31 December 2024					31 December 2023
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	Total
Up to date	7,694	849	145	(1)	8,687	10,553	1,342	123	12,018
1 to 29 days past due	29	39	14	–	82	43	54	15	112
30 to 89 days past due	–	90	86	–	176	–	115	43	158
90+ days past due	–	–	259	–	259	–	–	208	208
Gross carrying amount	7,723	978	504	(1)	9,204	10,596	1,511	389	12,496

Retail mortgages

		31 December 2024					31 December 2023
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	Total
Up to date	4,356	504	57	–	4,917	6,885	695	37	7,617
1 to 29 days past due	2	21	11	–	34	2	28	10	40
30 to 89 days past due	–	59	21	–	80	–	61	16	77
90+ days past due	–	–	114	–	114	–	–	83	83
Gross carrying amount	4,358	584	203	–	5,145	6,887	784	146	7,817

Consumer lending

		31 December 2024					31 December 2023
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	Total
Up to date	496	141	2	(1)	638	900	297	3	1,200
1 to 29 days past due	–	2	1	–	3	6	2	–	8
30 to 89 days past due	–	10	5	–	15	–	15	7	22
90+ days past due	–	–	89	–	89	–	–	67	67
Gross carrying amount	496	153	97	(1)	745	906	314	77	1,297

Commercial lending

		31 December 2024					31 December 2023
£’million	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	Total
Up to date	2,842	204	86	–	3,132	2,768	350	83	3,201
1 to 29 days past due	27	16	2	–	45	35	24	5	64
30 to 89 days past due	–	21	60	–	81	–	39	20	59
90+ days past due	–	–	56	–	56	–	–	58	58
Gross carrying amount	2,869	241	204	–	3,314	2,803	413	166	3,382

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

31. Financial commitments

Accounting policy

To meet the financial needs of our customers, we enter into various irrevocable commitments.

These generally consist of financial guarantees, letters of credit and other undrawn commitments

to lend.

Even though these obligations are not recognised on the balance sheet, they do contain credit risk

and an ECL is calculated and recognised for them (see note 30).

When these commitments are drawn down or called upon, and meet the recognition criteria as

detailed in note 12, these are recognised within our loans and advances to customers.

At 31 December 2024, we had undrawn facilities granted to retail and commercial customers of

£881 million (31 December 2023: £718 million).

As part of our retail and commercial operations, this includes commitments of £241 million (31 December

2023: £327 million) for credit card and overdraft facilities. These commitments represent agreements to

lend in the future, subject to certain conditions. Such commitments are cancellable, subject to notice

requirements, and given their nature are not expected to be drawn down to the full level of exposure.

32. Contingent Liabilities

As part of the normal course of business we are subject to legal, taxation and regulatory matters.

The matters outlined below represent material contingent liabilities and as such at the reporting date no

provision has been made for any of these cases within the financial statements. This is because, based on

the facts currently known, it is not practicable to predict the outcome, if any, of these matters or reliably

estimate any financial impact. Their inclusion does not constitute any admission of wrongdoing or legal

liability.

Magic Money Machine litigation

In 2022 Arkeyo LLC, a software company based in the United States, filed a civil suit with a stated value of

over £24 million against us in the English High Court alleging, among other matters, that we infringed their

Money Machines).

We believe Arkeyo LLC’s claims are without merit and are vigorously defending the claim.

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

33. Offsetting of financial assets and liabilities

Accounting policy

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net

basis or realise the asset and settle the liability simultaneously.

		31 December 2024			31 December 2023
		Effects of offsetting			Effects of offsetting
		on the balance sheet			on the balance sheet
			Net amounts			Net amounts
		Gross amounts	presented		Gross amounts	presented
	Gross	offset in the	in the balance	Gross	offset in the	in the balance
	amount	balance sheet	sheet	amount	balance sheet	sheet
Assets	£’million	£’million	£’million	£’million	£’million	£’million
Loans and advances to customers	9,013	–	9,013	12,297	–	12,297
Investment securities 1	4,490	–	4,490	4,879	–	4,879
Derivative financial assets	23	(7)	16	67	(31)	36
Deferred tax assets	271	(31)	240	17	(17)	–
Other assets 2	82	–	82	108	–	108
Liabilities
Derivative financial liabilities	8	(7)	1	31	(31)	–
Repurchase agreements 1	391	–	391	1,191	–	1,191
Deposits from central banks 1	400	–	400	3,050	–	3,050
Deferred tax liabilities	31	(31)	–	30	(17)	13

1. We have pledged £1,034 million (2023: £6,110 million) against repos, deposits from central banks and other assets as encumbered collateral which can be called upon in the event of default.

2. Includes £53 million (2023: £50 million) pledged as cash collateral. None of the cash collateral has been offset in the balance sheet.

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

34. Fair value of financial instruments

Accounting policy

Determination of fair value

‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the

most advantageous market to which we have access at that date. The fair value of a liability reflects its non-performance risk.

In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as summarised below:

• Level 1 financial instruments – Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that we have access to at the measurement

date. We consider markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price

quotes available on the balance sheet date.

• Level 2 financial instruments – Those where the inputs that are used for valuation are significant, and are derived from directly or indirectly observable market data available over the entire period of the

instrument’s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices,

such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that

are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, we will classify the instruments as Level 3.

• Level 3 financial instruments – Those that include one or more unobservable inputs that are significant to the measurement as whole.

			31 December 2024					31 December 2023
				With					With
		Quoted	Using	significant			Quoted	Using	significant
		market	observable	unobservable			market	observable	unobservable
	Carrying	price	inputs	inputs	Total fair	Carrying	price	inputs	inputs	Total fair
	value	Level 1	Level 2	Level 3	value	value	Level 1	Level 2	Level 3	value
	£’million	£’million	£’million	£’million	£’million	£’million	£’million	£’million	£’million	£’million
Assets
Loans and advances to customers	9,013	–	–	8,981	8,981	12,297	–	–	12,156	12,156
Investment securities held at fair value through other comprehensive income	377	377	–	–	377	476	476	–	–	476
Investment securities held at amortised cost	4,113	2,857	1,122	–	3,979	4,403	3,143	1,072	–	4,215
Derivative financial assets	16	–	16	–	16	36	–	36	–	36
Liabilities
Deposits from customers	14,458	–	–	14,458	14,458	15,623	–	–	15,622	15,622
Deposits from central bank	400	–	–	400	400	3,050	–	–	3,050	3,050
Debt securities	675	–	711	–	711	694	–	585	–	585
Derivative financial liabilities	1	–	1	–	1	–	–	–	–	–
Repurchase agreements	391	–	–	391	391	1,191	–	–	1,191	1,191

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

34. Fair value of financial instruments continued

Cash and balances with other banks, trade and other receivables, trade and other payables and other

assets and liabilities which meet the definition of financial instruments are not included in the tables. Their

carrying amount is a reasonable approximation of fair value.

Information on how fair values are calculated are explained below:

Loans and advances to customers

Fair value is calculated based on the present value of future principal and interest cash flows, discounted

at the market rate of interest at the balance sheet date, adjusted for future credit losses and prepayments,

if considered material.

Investment securities

The fair value of investment securities is based on either observed market prices for those securities that

have an active trading market (fair value Level 1 assets), or using observable inputs (in the case of fair value

Level 2 assets).

Financial assets held at fair value through profit and loss

The financial assets at fair value through profit and loss relate to the loans and advances previously

assumed by the RateSetter provision fund. They are measured at the fair value of the amounts that we

expect to recover on these loans.

Deposits from customers

Fair values are estimated using discounted cash flows, applying current rates offered for deposits of

similar remaining maturities. The fair value of a deposit repayable on demand is approximated by its

carrying value.

Debt securities

Fair values are determined using the quoted market price at the balance sheet date.

Deposits from central banks/repurchase agreements

Fair values are estimated using discounted cash flows, applying current rates. Fair values approximate

carrying amounts as their balances are either short-dated or are on a variable rate which aligns to the

current market rate.

Derivative financial assets and liabilities

The fair values of derivatives are obtained from discounted cash flow models as appropriate.

35. Related parties

Related persons

Key management personnel

Our key management personnel, and persons connected with them, are considered to be related parties.

Key management personnel are defined as those persons having authority and responsibility for planning,

directing and controlling the activities of the Group. The Directors and members of the ExCo are

considered to be the key management personnel for disclosure purposes.

Controlling shareholder

Following the completion of our capital raise in November 2023, Jaime Gilinski Bacal, via Spaldy

Investments Limited, a company of which he is the sole director and shareholder, became the controlling

shareholder of Metro Bank Holdings PLC (see note 7 to the Company financial statements for further

details). Given his control over the Group, Jaime Gilinski Bacal, Spaldy Investments Limited and persons

connected to them are also considered to be related parties as at 31 December 2024. We have a

relationship agreement with our controlling shareholder which may be viewed on our website

(www.metrobankonline.co.uk/globalassets/documents/customer_documents/personal/relationship-

agreement-metro-bank-holdings-plc-spaldy-investments-ltd-jaime-gilinski-bacal.pdf). More information

on the independence of our controlling shareholder can be found on page 119.

Key management compensation

Total compensation cost for key management personnel for the year by category of benefit was as

follows:

	2024	2023
	£’million	£’million
Short-term benefits	5.5	5.4
Post-employment benefits	0.1	0.1
Share-based payment costs	1.1	0.9
Termination benefits	0.4	0.9
Total compensation for key management personnel	7.1	7.3

Short-term employee benefits include salary, medical insurance, bonuses and cash allowances paid to key

management personnel. The share-based payment cost represents the IFRS 2 charge for the year which

includes awards granted in prior years that have not yet vested.

During the year as part of the organisational restructure announced, exit agreements were agreed with

certain key management personnel who subsequently left the business in January 2024.

Banking transactions with key management personnel

We provide banking services to Directors and other key management personnel and persons connected

to them.

Notes to the consolidated financial statements continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Notes to the consolidated financial statements continued

35. Related parties continued

Deposit transactions during the year and the balances outstanding as at 31 December 2024 and

31 December 2023 were as follows:

	2024	2023
	£’million	£’million
Deposits held at 1 January	1.0	1.5
Deposits relating to persons and companies newly considered
related parties	0.1	–
Deposits relating to persons and companies no longer considered related parties	(0.3)	(0.5)
Net amounts deposited/(withdrawn)	–	–
Deposits held as at 31 December	0.8	1.0

Loan transactions during the year and the balances outstanding as at 31 December 2024 and

31 December 2023 were as follows:

	2024	2023
	£’million	£’million
Loans outstanding at 1 January	2.0	2.1
Loans relating to persons and companies newly considered related parties	0.4	–
Loans issued during the year	0.2	–
Net repayments during the year	–	–
Loans outstanding as at 31 December	2.6	2.1
Interest received on loans (£’000)	62	35

There were two (31 December 2023: two) loans outstanding at 31 December 2024 totalling £2.6 million

(31 December 2023: £2.1 million). Both are residential mortgages secured on property; all loans were

provided on our standard commercial terms.

In addition to the loans detailed above, we have issued credit cards and granted overdraft facilities on

current accounts to Directors and key management personnel.

Credit card balances outstanding as at 31 December 2024 and 31 December 2023 were as follows:

	2024	2023
	£’000	£’000
Credit cards outstanding as at 31 December	–	3

As with all of our lending we recognise an ECL on loans and credit card balances outstanding with key

management personnel. As at 31 December 2024, the only ECL recognised on the balances above was

our standard modelled ECL with no individual impairments recognised (31 December 2023: £nil). We have

not written off any balances to key management personnel in either 2023 or 2024.

36. Earnings per share

Basic earnings per share is calculated by dividing the profit/(loss) attributable to our ordinary equity

holders by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share has been calculated by dividing the profit/(loss) attributable to our ordinary

equity holders by the weighted average number of ordinary shares in issue during the year plus the

weighted average number of ordinary shares that would be issued on the conversion to shares of options

granted to colleagues.

In the year ended 31 December 2024, 2.5 million share options were excluded from the weighted average

number of shares due to these being antidilutative.

	2024	2023
Profit attributable to ordinary equity holders (£’million)	42.5	29.5
Weighted average number of ordinary shares in issue (thousands)		–
Basic	672,784	214,297
Adjustment for share awards	2,466	6,459
Diluted	675.250	220,756
Earnings per share (pence)
Basic	6.3	13.8
Diluted	6.3	13.4

There have been no transactions involving ordinary shares or potential ordinary shares between the

reporting date and the date of the completion of these financial statements which would require the

restatement of loss per share.

In Q4 2023, shareholders approved a £925 million capital package that included £150 million of new

equity made up of 500,000 shares. The new shares increased the weighted average number of ordinary

shares in issue from 214,297 thousand in 2023 to 672,784 thousand in 2024.

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Metro Bank Holdings PLC Annual Report and Accounts 2024

Notes to the consolidated financial statements continued

37. Non-cash items

The table below sets out the non-cash items included in profit/(loss) before tax. These have been adjusted

for in the cash flow statements on page 164.

	2024	2023
	£’million	£’million
Interest receivable	(935)	(856)
Interest paid	558	444
Depreciation and amortisation	77	78
Impairment and write-offs of property, plant, equipment
and intangible assets	44	5
Expected credit loss expense	7	33
Share option charge	2	3
Grant income recognised in the income statement	(3)	(2)
Amounts provided for (net of amounts released)	(8)	16
Haircut on Tier 2 debt	–	(100)
(Loss)/gain on sale of assets	(101)	3
Total adjustments for non-cash items	(359)	(376)

38. Post balance sheet events

On 26th February 2025, the Bank confirmed entering into an agreement to sell a portfolio of

approximately £584 million of unsecured personal loans. The sale of the portfolio is in line with the Bank’s

strategy to reposition its balance sheet and enhance risk-adjusted returns on capital. The transaction is

capital accretive and creates additional lending capacity to enable the Bank to continue its asset rotation

towards higher yielding corporate, commercial and SME lending and specialist mortgages. The sale was

completed on 31st March 2025.

On 26th March 2025, the Bank issued £250 million 13.875 per cent fixed rate reset perpetual subordinated

contingent convertible capital securities (Additional Tier 1 securities). These securities constitute direct,

unsecured, unguaranteed and subordinated obligations of the Bank and rank pari passu without

preference among themselves. The issuance is in line with Metro Bank’s capital management framework

and strategy and is aimed at optimising the capital structure and providing further flexibility for growth.

On 31st March 2025, £50,000 of redeemable preference shares associated with the original

incorporation of MB Group PLC, subsequently Metro Bank Holdings PLC, were redeemed. This transaction

occurred between the period end and publication date of the Annual Report and Accounts and is

therefore an immaterial yet noteworthy event.

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Years ended 31 December

Notes

2024

£’million

2023

£’million

Cash and balances with other banks – 2

Financial assets held at fair value through profit and loss 2 711 585

Investment in subsidiaries 3 1,112 682

Prepayments and accrued income 15 7

Deferred tax asset 1 –

Total assets 1,839 1,276

Debt securities 4 671 670

Other liabilities 43 33

Total liabilities 714 703

Share premium 5 144 144

Retained earnings 957 406

Other reserves 24 23

Total equity 1,125 573

Total equity and liabilities 1,839 1,276

1. The Company profit for the year was £55 0.4 million (2023: loss of £536.5 million).

The accompanying notes on pages 215 to 218 form an integral part of these financial statements. The financial statements and accompanying notes were approved by the Board of Directors on 22 April 2025 and

signed on its behalf by:

Robert Sharpe Daniel Frumkin

Chair Chief Executive Officer

Company balance sheet

As at 31 December 2024

212

Metro Bank Holdings PLC Annual Report and Accounts 2024

Company statement of changes in equity

For the year ended 31 December 2024

Company

Called-up

capital

£’million

premium

£’million

Retained

earnings

£’million

FVOCI

reserve

£’million

option

reserve

£’million

Merger

reserve

£’million

Total

equity

£’million

Balance as at 1 January 2024 – 144 406 – 23 – 573

Profit for the year – – 550 – – – 550

Total comprehensive income – – 550 – – – 550

Equity-settled share-based payment charges – – – – 2 – 2

Transfer of share option reserve – – 1 – (1) – –

Balance as at 31 December 2024 – 144 957 – 24 – 1,125

Balance as at 1 January 2023 – – – – – – –

Loss for the year – – (537) – – – (537)

Other comprehensive income (net of tax) relating to investment securities designated at fair value through

other comprehensive income – – – – – – –

Total comprehensive profit – – (537) – – – (537)

Net share option movements 1 1

Transfer of share option reserve – – (22) – 22 – –

Issuance of Metro Bank Holdings PLC share capital – – – – – 965 965

Bonus issuance 965 – – – – (965) –

Capital reduction of Metro Bank Holdings PLC share capital (965) – 965 – – – –

Shares issued – 150 – – – – 150

Cost of shares issued – (6) – – – – (6)

Balance as at 31 December 2023 – 144 406 – 23 – 573

Notes 26 26 27 28 28 28

The accompanying notes on pages 215 to 218 form an integral part of these financial statements.

213Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Years ended 31 December

2024

£’million

2023

£’million

Reconciliation of loss before tax to net cash flows from operating activities:

Profit/(loss) before tax 549 (537)

Adjustments for non-cash items

Interest receivable (84) (24)

Interest paid 85 25

Fair value movements (126) 88

Interest received 70 17

Interest paid (70) (16)

Impairment (loss)/gain on subsidiary (428) 428

Changes in other operating assets (10) (7)

Changes in other operating liabilities 12 33

Net cash (outflows)/inflows from operating activities (2) 7

Cash flows from investing activities

Issuance of equity to subsidiary – (144)

Issuance of debt to subsidiaries – (175)

Net cash outflows from investing activities – (319)

Cash flows from financing activities

Share issuance – 150

Cost of share issuance – (6)

Debt issuance – 175

Cost of debt issuance – (5)

Net cash inflows from financing activities – 314

Net (decrease)/increase in cash and cash equivalents (2) 2

Cash and cash equivalents at start of year 2 –

Cash and cash equivalents at end of year – 2

The accompanying notes on pages 215 to 218 form an integral part of these financial statements.

Company cash flow statement

For the year ended 31 December 2024

214

Metro Bank Holdings PLC Annual Report and Accounts 2024

Notes to the company financial statements

1. Basis of preparation and significant accounting policies

1.1 General information

The separate financial statements of the Company are presented as required by the Companies Act

2006. The basis of preparation and principal accounting policies adopted are the same as those set out

in within the Group’s consolidated financial statements, aside from the accounting policy in relation to

share-based payments. For the Company, the cost of the awards are recognised on a straight-line basis

to investment in subsidiaries (with a corresponding increase in the share-based payment reserve within

equity) over the vesting period in which the employees become unconditionally entitled to the awards.

Incorporation of Metro Bank Holdings PLC

The Company was incorporated on 29 September 2022 as MB Group TopCo PLC with £50,000 of

redeemable preference shares and £2 of ordinary shares, which were issued to Robert Sharpe (Chair)

and Daniel Frumkin (Chief Executive Officer). On 12 December 2022, the Company changed its name to

Metro Bank Holdings PLC. The Company remained a dormant company with no trading activities until the

19 May 2023, when it was inserted as the new ultimate holding company and listed entity of the Group.

As at 31 December 2024, the redeemable shares had not yet been redeemed.

The Company’s main activity consists of holding the Group’s external regulatory debt and share capital

which is then downstreamed to Metro Bank PLC to meet the Bank of England’s resolution requirements.

The Company adopted the predecessor value method with an investment in subsidiary of Metro Bank PLC

being the book value of the balance sheet in Metro Bank PLC at the date of insertion. As part of this, the

share option reserve was transferred from Metro Bank PLC to the Company at its carrying amount on

the same day.

1.2 Critical accounting estimates

The preparation of financial statements in conformity with IFRS requires us to make both material

judgements as well as estimates which, although based on our best assessment, by definition will

seldom equal the actual results. Management believes that the underlying assumptions applied at

31 December 2024 are appropriate and that these financial statements therefore present our financial

position and results fairly. The areas involving a higher degree of complexity, judgement or where

estimates have a significant risk of resulting in a material adjustment to the carrying amounts within

the next financial year are:

Area Estimates Judgements Further details

Impairment of

investments in

subsidiaries

Key assumptions used for

VIU calculations

n/a Note 3

2. Financial assets held at fair value through profit and loss

The financial assets held at fair value through profit and loss consist solely of intercompany loans used for

downstreaming regulatory debt issued by the Company to Metro Bank PLC.

In line with resolution requirements, these internal agreements incorporate the Bank of England’s

Statement of Policy giving the Bank of England power to write down the par value of the loans or convert

the loans into equity. As such, the intercompany loans fail the ‘solely payments of principal and interest’

test under IFRS 9 and have a mandatory classification of fair value through profit and loss. Key terms of

the loans are identical to the debt securities issued (see note 20 to the consolidated financial statements).

The measurement of these assets is consistent with the measurement approach used to determine the

fair value of the debt securities as set out in note 34 to the Group’s consolidated financial statements.

215Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Notes to the company financial statements continued

3. Investment in subsidiaries

Accounting policy

The Company’s only directly held subsidiary is that of Metro Bank PLC, which was recognised on

19 May 2023. The value of the subsidiary was recognised using the predecessor value method as

set out in note 1.

At the end of each reporting period, the investment in the subsidiary is tested for impairment when

there is an indication that the investment may be impaired. An impairment is recognised when the

carrying amount exceeds the recoverable amount for that investment. The recoverable amount is

the higher of the investment’s fair value less costs of disposal and its VIU, in accordance with the

requirements of IAS 36. The VIU is calculated by discounting management’s cash flow projections

for the investment. The cash flows represent the free cash flows based on the subsidiary’s binding

capital requirements.

Critical accounting estimate

Impairment of investment in subsidiary

The review identified that the VIU exceeded the carrying amount. Consequently, the impairment

in the investment in Metro Bank PLC, the Company’s only directly held subsidiary, of £428 million,

recognised in FY 2023 was reversed. This increased the carrying value of the investment to

£1,112 million including the net share option movements.

Key assumptions used for VIU calculations

The rate used to discount the cash flows is based on the cost of capital related to the investment,

which is derived using a capital asset pricing model and market implied cost of equity. A pre-tax

discount rate of 22.4% has been used in the VIU. In determining the discount rate, management has

used judgement and applied the Group’s cost of equity, as this represents a proxy for the

subsidiary’s cost of equity given it represents substantially all of the Group.

A 2% increase in the discount rate would lead to a reduction in the VIU by £182m and an impairment

of £133m. A 2% decrease in the discount rate would lead to an increase in the VIU by £243m.

The profitability and growth rates applied are consistent with those used in the Group’s impairment

assessment as set out in note 15 to the Group’s consolidated financial statements.

A 10% decrease in the forecast free cash flows each year would lead to reduction in the VIU by

£180m and an impairment of £131m. A 10% increase in the forecast free cash flows each year would

lead to increase in the VIU by £214m.

As the investment is eliminated upon consolidation within the Group’s financial statements, it has no

impact on the Group’s capital position or regulatory ratios.

216

Metro Bank Holdings PLC Annual Report and Accounts 2024

Notes to the company financial statements continued

3. Investment in subsidiaries continued

The Company had the following subsidiaries at 31 December 2024:

Name

Country of

incorporation

and place of

business Nature of business

Proportion

of ordinary

shares directly

held by the

Parent (%)

Proportion

of ordinary

shares directly

held by the

Group (%)

Metro Bank PLC

UK Retail and commercial

banking services 100% –

SME Invoice Finance Limited

UK Invoice financing – 100%

SME Asset Finance Limited

UK Asset financing – 100%

1. All of the Company’s subsidiaries have their registered address at One Southampton Row, London, WC1B 5HA.

The proportion of the voting rights in the subsidiary undertakings held directly by the Company do not

differ from the proportion of ordinary shares held.

In May 2023, Metro Bank Holdings PLC was inserted as the new ultimate holding company and listed entity

of the Group. In June 2023, Metro Bank PLC issued £964.6 million shares to Metro Bank Holdings PLC.

Prior to this date Metro Bank PLC was both a banking entity and the ultimate parent company of the

Group, but has subsequently become a 100% subsidiary of Metro Bank Holdings PLC.

In November 2023, the Company issued 500.0 million ordinary shares for consideration of £150 million,

with associated costs of £6 million having been offset against the amount raised. In line with the resolution

requirements, Metro Bank PLC issued 500.0 million new shares for consideration of £144 million to the

Company to allow the proceeds of the capital raised to be downstreamed. An impairment of £428 million

was recognised at year end.

Company

2024

£’million

Company

2023

£’million

1 January 682 –

Net book value of Metro Bank PLC on 19 May 2023 – 965

Deemed capital contribution 2 1

Capital injections into subsidiaries – 144

Reversal/(Impairment) of subsidiaries 428 (428)

31 December 1,112 682

The investment in subsidiary gain has been recognised in Total comprehensive income.

Transactions between the Company and Group subsidiaries

In addition to the intercompany loans used for downstreaming regulatory debt set out in note 2, Metro

Bank PLC provides the Company with a small amount of operational funding. The amounts outstanding as

at 31 December 2024, primarily relate to the costs of the capital raise in November 2023 which were paid

by Metro Bank PLC on the Company’s behalf.

As at 31 December 2024, Metro Bank PLC had £14 million of accrued interest payable to the Company

on the internal debt instruments used for downstreaming the regulatory debt. The timing of interest

payments on these internal instruments is aligned to the interest payment dates on the external debt

securities (see note 4).

2024

£’million

2023

£’million

Amounts owed by Metro Bank PLC 14 7

Amounts owed to Metro Bank PLC 29 24

The transactions above are eliminated upon consolidation within the Group’s financial statements.

217Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Notes to the company financial statements continued

4. Debt securities

Details of the Company’s debt securities in issue can be found in note 20 to the Group’s consolidated

financial statements.

Hedge accounting is not applicable to the debt securities in issue at the Company level.

5. Called-up share capital

As set out in note 1 the Company was incorporated on 29 September 2022 with £50,000 of redeemable

preference shares and £2 of ordinary shares. As at 31 December 2024, the redeemable preference

shares had not yet been redeemed.

As at 31 December 2024, the Company had 673.0 million ordinary shares of 0.0001p authorised and in

issue. Further details on the Company’s called-up share capital can be found in note 26 to the Group’s

consolidated financial statements.

6. Directors and employees

The Company has no employees. Metro Bank PLC provides the Company with employee services and

bears the costs, associated with the Directors of the Company. These costs are not recharged to the

Company.

7. Controlling party

As at 31 December 2024, the controlling party of Metro Bank Holdings PLC was Jaime Gilinski Bacal,

through Spaldy Investments Limited, a company registered in the British Virgin Islands and of which he is

the sole director and shareholder.

The registered office of Spaldy Investments Limited is at the offices of Aleman, Cordero,

Galindo & Lee Trust (BVI) Limited, 3rd Floor, Yamraj Building, Market Square, P.O. Box 3175, Road Town,

Tortola, British Virgin Islands.

218

Metro Bank Holdings PLC Annual Report and Accounts 2024

In this section

220 Country-by-country report

221 Independent auditors’ report to the Directors of Metro

Bank Holdings PLC (on country-by-country information)

223 Other disclosures

224 Alternative performance measures

229 Abbreviations

230 Shareholder information

Additional

information

219Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Country-by-Country report

The reporting obligations set out in the Capital Requirements Directive IV (CRD IV) have been

implemented in the UK by the Capital Requirements (Country-by-Country Reporting) Regulations.

The purpose of the regulations is to provide clarity on the source of the Group’s income and the

locations of its operations.

The Group is a credit institution for the purposes of CRD IV and is therefore within the scope of

Country-by-Country Reporting. Our activities are disclosed within note 1 to the financial statements.

For the purposes of Country-by-Country Reporting, the appropriate disclosures required are

summarised below:

Number of employees (average full-time equivalent) 3,4 55

Turnover (£’million) 405

Loss before tax (£’million) (212)

Tax credit (£’million) 255

Corporation tax paid (£’million) –

No public subsidies were received during the year.

Basis of preparation

Country

Metro Bank Holdings PLC and its subsidiaries only operate within the UK and are all UK registered entities.

Full-time equivalent employees

FTE employees are allocated to the country in which they are primarily based for the performance of their

employment duties. The figures disclosed represent the average number of FTE employee, all of which

were employed in the UK.

Turnover and loss before tax

Turnover and loss before tax are compiled from the Metro Bank Holdings PLC consolidated financial

statements for the year ended 31 December 2024, which are prepared in accordance with IFRS. Turnover

represents the sum of the Group’s net interest income, net fee and commission income, net gains on sale

of assets and other income.

Tax credit and corporation tax paid

Corporation tax paid represents the net cash taxes paid to the tax authority, HMRC, during 2024.

Corporation tax paid is reported on a cash basis and will normally differ from the tax expense recorded for

accounting purposes due to:

• timing differences in the accrual of the tax charge

• brought forward losses from previous years that were used to extinguish a portion of the

Company’s taxable profits

• other differences between when income and expenses are accounted for under IFRS and when they

become taxable.

220

Metro Bank Holdings PLC Annual Report and Accounts 2024

Independent auditors’ report to the directors of Metro Bank Holdings PLC

Report on the audit of the country-by-country information

Opinion

In our opinion, Metro Bank Holdings plc’s country-by-country information for the year ended 31 December

2024 has been properly prepared, in all material respects, in accordance with the requirements of the

Capital Requirements (Country-by-Country Reporting) Regulations 2013.

We have audited the country-by-country information for the year ended 31 December 2024 in the

Country-by-Country Report.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”),

including ISA (UK) 800 and ISA (UK) 805, and applicable law. Our responsibilities under ISAs (UK) are

further described in the Auditors’ responsibilities for the audit of the country-by-country information

section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate

to provide a basis for our opinion.

Independence

We remained independent of the Group in accordance with the ethical requirements that are relevant

to our audit of the country-by-country information in the UK, which includes the FRC’s Ethical Standard,

as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in

accordance with these requirements.

Emphasis of matter – Basis of preparation

In forming our opinion on the country-by-country information, which is not modified, we draw attention to

note 1 of the country-by-country information which describes the basis of preparation. The country-by-

country information is prepared for the directors for the purpose of complying with the requirements of

the Capital Requirements (Country-by-Country Reporting) Regulations 2013. The country-by-country

information has therefore been prepared in accordance with a special purpose framework and, as a

result, the country-by-country information may not be suitable for another purpose.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going

concern basis of accounting included:

• Understanding the Directors’ going concern assessment process, including the preparation and

approval of the budget. We obtained management’s Board approved forecast covering the going

concern period of assessment of 15 months from the date of these financial statements. We evaluated

the forecasting method adopted by the Directors in assessing going concern;

• Evaluation of management’s financial and regulatory capital forecasts. We checked the mathematical

accuracy of the model and evaluated the key assumptions using our understanding of the Group and

external evidence where appropriate. We used our Prudential Regulatory experts to review the Bank’s

risk weighted assets and forecast capital requirement assumptions. We also performed a comparison

of the 2024 budget and the actual results to assess the accuracy of the budgeting process;

• Evaluation of the appropriateness of management’s severe but plausible scenarios using our

understanding of the group and the external environment. We considered the mitigating actions that

management identified, including the reduction of costs and slowing down the origination of new loans

and advances, and assessed whether these were in the control of management and possible in the

going concern period of assessment;

• Reviewing management’s stress testing of liquidity and evaluation of the impact on liquidity of past

stress events. We substantiated the liquid resources held, and liquidity facilities available to the group,

for example, with the Bank of England;

• Reviewing correspondence between the Bank and its regulators and we met with the PRA during the

audit and understood the PRA’s perspectives on the Bank’s risks and its capital and liquidity position; and

• Assessing the adequacy of disclosures in the Going Concern statement in note 1 of the Consolidated

and Company Financial Statements and within the within the Viability statement and going concern

section on pages 46 and 47 and found these appropriately reflect the key areas of uncertainty

identified.

Based on the work we have performed, we have not identified any material uncertainties relating to events

or conditions that, individually or collectively, may cast significant doubt on the company’s ability to

continue as a going concern for a period of at least twelve months from the date on which the country-by-

country information is authorised for issue.

In auditing the country-by-country information, we have concluded that the directors’ use of the going

concern basis of accounting in the preparation of the country-by-country information is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee

as to the company’s ability to continue as a going concern.

Our responsibilities and the responsibilities of the directors with respect to going concern are described

in the relevant sections of this report

221Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Independent auditors’ report to the directors of Metro Bank Holdings PLC continued

Responsibilities for the country-by-country information and the audit

Responsibilities of the directors for the country-by-country information

The directors are responsible for the preparation of the country-by-country information in accordance

with the requirements of the Capital Requirements (Country-by-Country Reporting) Regulations 2013 as

explained in the basis of preparation in note 1 of the Country-by-Country Report and the accounting

policies in the Consolidated and Company financial statements, and for determining that the basis of

preparation and accounting policies are acceptable in the circumstances. The directors are also

responsible for such internal control as they determine is necessary to enable the preparation of

country-by-country information that is free from material misstatement, whether due to fraud or error.

In preparing the country-by-country information, the directors are responsible for assessing the Group’s

ability to continue as a going concern, disclosing as applicable, matters related to going concern and using

the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease

operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the country-by-country information

It is our responsibility to report on whether the country-by-country information has been properly

prepared in accordance with the relevant requirements of the Capital Requirements (Country-by-Country

Reporting) Regulations 2013.

Our objectives are to obtain reasonable assurance about whether the country-by-country information as

a whole is free from material misstatement, whether due to fraud or error, and to issue an auditors’ report

that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an

audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the

basis of this country-by-country information.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-

compliance with laws and regulations related to breaches of the rules of the Financial Conduct Authority

(FCA) and Prudential Regulatory Authority (PRA) and we considered the extent to which non-compliance

might have a material effect on the country-by-country information. We also considered those laws and

regulations that have a direct impact on the country-by-country information such as UK tax legislation and

the Capital Requirements (Country-by-Country Reporting) Regulations 2013. We evaluated management’s

incentives and opportunities for fraudulent manipulation of the country-by-country information (including

the risk of override of controls), and determined that the principal risks were related to posting manual

journal entries to manipulate financial performance and management bias in accounting estimates. Audit

procedures performed included:

• Enquiries of the Audit Committee, management, internal audit and the group’s legal counsel, including

consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

• Evaluation of the design and implementation of controls designed to prevent and detect irregularities

relevant to financial reporting;

• Reviewing key correspondence and holding discussions with regulators, such as the FCA and the PRA,

in relation to the group’s compliance with banking regulations;

• Incorporating unpredictability into the nature, timing and/or extent of our testing;

• Challenging assumptions and judgements made by management in respect of the determination of

allowance for expected credit losses on loans and advances to customers, the carrying value of

non-financial assets, the carrying value of the investment in subsidiary and the recognition of a deferred

tax asset in relation to past trading losses;

• Identifying and testing journal entries including those posted by infrequent or unexpected users, posted

to certain account combinations and those posted late in the financial reporting process; and

• Identifying and testing significant and unusual transactions and material non-recurring items such as

impairments and write-offs.

There are inherent limitations in the audit procedures described above. We are less likely to become

aware of instances of non-compliance with laws and regulations that are not closely related to events and

transactions reflected in the country-by-country information. Also, the risk of not detecting a material

misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may

involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through

collusion.

A further description of our responsibilities for the audit of the country-by-country information is located

on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our

auditors’ report.

Use of this report

This report, including the opinion, has been prepared for and only for the Group’s directors in accordance

with the Capital Requirements (Country-by-Country Reporting) Regulations 2013 and for no other

purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any

other person to whom this report is shown or into whose hands it may come, save where expressly

agreed by our prior consent in writing.

The engagement partner responsible for this audit is Jonathan Holloway.

PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

22 April 2025

222

Metro Bank Holdings PLC Annual Report and Accounts 2024

Other disclosures (unaudited)

Reconciliation of statutory balance sheet to risk-weighted asset

31 December 2024 31 December 2023

Financial

statements

£’million

Average risk

density

Risk-

weighted

assets

£’million

Financial

statements

£’million

Average risk

density

Risk-

weighted

assets

£’million

Cash and balances with the Bank of England 2,811 1% 18 3,903 1% 44

Loans and advances to customers 9,013 50% 4,529 12,286 46% 5,597

Investment securities held at FVOCI 377 2% 8 476 2% 11

Investment securities held at amortised cost 4,113 4% 171 4,403 4% 187

Financial assets held at fair value through profit and loss – – – – – –

Derivative financial assets 16 – – 36 – –

Property, plant and equipment 711 100% 711 723 100% 723

Intangible assets 126 0% – 193 – –

Prepayments and accrued income 93 45% 42 118 43% 51

Deferred tax assets

240 n/a 7 3 267% 8

Other assets 82 104% 85 108 96% 104

Total assets 17,582 32% 5,571 22,248 30% 6,725

Off-balance sheet assets 132 79

Credit risk (excluding counterparty credit risk) 5,703 6,804

Counterparty credit risk 19 26

Market risk – –

Operational risk 720 703

Total risk-weighted assets 6,442 7,533

1. In the consolidated balance sheet per the financial statements, deferred tax is shown as a net figure with the deferred tax liability, however, from a regulatory perspective the deferred tax asset and liability are treated separately.

223Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Alternative performance measures (unaudited)

In the reporting of financial information, we use certain measures that are not required under IFRS, the Generally Accepted Accounting Principles under which we report. These measures are consistent with those

used by management to assess performance.

These alternative performance measures have been defined below:

Metric KPI

Scorecard

measure LTIP Definition

Cost of deposits Yes No No

Interest expense on customer deposits divided by the average deposits

from customers for the year.

2024

£’million

2023

£’million

Interest on customer deposits (note 2) 303.6 147.8

Average deposits from customer 15,530 15,237

Cost of deposits 1.95% 0.97%

Cost of risk Yes Yes No Expected credit loss expense divided by average gross loans.

2024

£’million

2023

£’million

Expected credit loss expense (note 30) 7.1 33.2

Average gross lending 11,223 12,778

Cost of risk 0.06% 0.26%

Coverage ratio

No No No Expected credit losses as a percentage of gross loans.

2024

£’million

2023

£’million

Expected credit losses (note 12) 191 199

Gross loans and advances to customers (note 12) 9,204 12,496

Coverage ratio 2.07% 1.59%

Retail mortgages

2024

£’million

2023

£’million

Expected credit losses – retail mortgages (note 12) 15 19

Gross retail mortgage lending (note 12) 5,145 7,817

Coverage ratio 0.29% 0.24%

Consumer

2024

£’million

2023

£’million

Expected credit losses – consumer (note 12) 108 108

Gross consumer lending (note 12) 745 1,297

Coverage ratio 14.43% 8.33%

Commercial

2024

£’million

2023

£’million

Expected credit losses – commercial (note 12) 68 72

Gross commercial lending (note 12) 3,314 3,382

Coverage ratio 2.05% 2.13%

1. Coverage ratio calculated using underlying figures.

224

Metro Bank Holdings PLC Annual Report and Accounts 2024

Metric KPI

Scorecard

measure LTIP Definition

Loan-to-deposit ratio Yes No No Net loans and advances to customers expressed as a percentage of total deposits as at the year end. It is a commonly

used ratio within the banking industry to assess liquidity.

2024

£’million

2023

£’million

Net loans and advances to customers (note 12) 9,013 12,297

Deposits from customers (note 18) 14,458 15,623

Loan-to-deposit ratio 62% 79%

Net interest margin No No No Net interest income as a percentage of average interest-earning assets.

2024

£’million

2023

£’million

Net interest income (note 2) 37 7.9 411.9

Average interest-earning assets 19,800 20,786

Net interest margin 1.91% 1.98%

Non-performing loan ratio No No No

Gross balance of loans in stage 3 (non-performing loans) as a percentage of gross loans as at year end.

Total book

2024

£’million

2023

£’million

Stage 3 loans (note 30) 504 389

Loans and advances to customers (note 12) 9,200 12,496

Non-performing loan ratio 5.48% 3.11%

Retail mortgages

2024

£’million

2023

£’million

Stage 3 loans – retail mortgages (note 30) 203 146

Gross retail mortgage lending (note 12) 5.145 7.8 17

Non-performing loan ratio – retail mortgages 3.95% 1.87%

Consumer

2024

£’million

2023

£’million

Stage 3 loans – consumer (note 30) 97 77

Gross consumer lending (note 12) 745 1,297

Non-performing loan ratio – consumer 13.02% 5.94%

Commercial

2024

£’million

2023

£’million

Stage 3 loans – commercial (note 30) 204 166

Gross commercial lending (note 12) 3,314 3,382

Non-performing loan ratio – commercial 6.16% 4.91%

Alternative performance measures (unaudited) continued

225

Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Metric KPI

Scorecard

measure LTIP Definition

Return on tangible equity Yes No Yes Statutory profit after tax as a percentage of average tangible equity

(average total equity less intangible assets).

2024

£’million

2023

£’million

Statutory profit after tax (Consolidated statement of comprehensive income) (211) 29.5

Average tangible equity 901 795

Return on tangible equity (23%) 4%

Statutory cost:income ratio Yes Yes No

Statutory total operating expenses as a percentage of statutory total income.

2024

£’million

2023

£’million

Total operating expenses (Consolidated statement of comprehensive income) 610.3 585.2

Total income (Consolidated statement of comprehensive income) 405.3 648.9

Statutory cost:income ratio 151% 90%

Total shareholder return Yes No Yes

Total capital gains and dividends returned to investors over a one-year period.

2024 2023

Share price at the start of the period 37p 126p

Share price at the end of the period 94p 37p

Total shareholder return 155% (71%)

1. No dividends were paid in either period

Underlying cost:income ratio No No No

Underlying total operating expenses as a percentage of underlying total income.

2024

£’million

2023

£’million

Total underlying operating expenses (page 228) 510.4 530.2

Total underlying income (page 228) 503.5 546.5

Underlying cost:income ratio 101% 97%

Underlying loss Yes Yes No Underlying loss represents an adjusted measure, excluding the effect of certain items that are considered to distort

year-on-year comparisons, in order to provide readers with a better and more relevant understanding of the underlying

trends in the business.

Details of the calculation of underlying loss can be found on page 228.

We also disclose a number of capital and liquidity metrics which are required by the PRA and FCA. The basis of calculation of those metrics is defined within the relevant legislation.

Alternative performance measures (unaudited) continued

226

Metro Bank Holdings PLC Annual Report and Accounts 2024

Non-underlying item Description Reason for exclusion

Impairment and

write-offs of property,

plant, equipment

and intangible assets

The costs associated with non-current assets that are either no longer being used

by or are no longer generating future economic benefit for the business.

The impairments and write-offs relating to property, plant, equipment and intangible

assets are removed as they distort comparison between years. This is on the basis that

the write-offs and impairments relate to specific events and triggers which are not

consistent between years.

Net C&I costs These costs and income relate to the delivering the commitments associated with

the Capability and Innovation Fund. Further details on this grant can be found in

note 23.

The commitments under the Capability and Innovation Fund continue through to 2025.

The costs associated with fulfilling the commitments and associated income are felt

to distort year-on-year comparison. Given the offsetting nature of the income and

expenditure, there is no net impact on our profitability from this adjustment.

Remediation costs Remediation costs consists of money spent including the conclusion of the FCA

enquiry into legacy issues relating to transaction monitoring systems and controls

as well as work undertaken in relation to financial crime.

The remediation costs are felt to be time limited and will disappear once the

investigations have concluded, as such these are removed to allow greater comparability

between periods.

Transformation costs Transformation costs primarily consist of the costs associated with redundancy

programmes during the year as part of our approach to right-sizing teams as well as

the costs of work undertaken to establish our cost reduction programme.

The transformation costs are seen as a nonrecurring cost stream aimed at addressing

the challenges the business faces. These are therefore removed in order to prevent

year-on-year distortion.

Mortgage portfolio sale

(2024 only)

On 30 September 2024, we sold a portfolio of approximately £2.5 billion of prime

residential mortgages to NatWest Group plc. We recognised a loss on the sale of

£101.6 million.

During 2024, we took proactive steps to strengthen the balance sheet and enable

positive asset rotation. The sale of this portfolio was one of those proactive steps. The

sale of loan portfolios is generally not considered in line with our business model. Given

the infrequency of sales and the quantum of the gain it has been removed in order to

prevent year-on-year distortion.

Cost of capital raise In November 2023, shareholders approved a £925 million capital package which

consisted of £150 million of new equity, £175 million of new MREL-eligible debt

and £600 million of debt refinancing. Costs associated with the refinancing were

expensed to the income statement, including the impact of discontinuing the

previous hedge relationships. Alongside this a £100 million gain was recognised on

the haircut agreed by Tier 2 bondholders.

The nature of the capital package meant it was both significant and one-off. The expense

recognised in 2024 was near zero and as such item is expected to be removed in 2025.

Alternative performance measures (unaudited) continued

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Metro Bank Holdings PLC Annual Report and Accounts 2024

A reconciliation from statutory profit/(loss) before tax to underlying loss before tax is set out below.

Year ended 31 December 2024

Statutory

basis

£’million

Impairment

and write-off of

property, plant,

equipment

and intangible

assets

£’million

Net C&I

costs

£’million

Transformation

costs

£’million

Remediation

costs

£’million

Mortgage

portfolio sale

£’million

Cost associated

with capital raise

£’million

Underlying

basis

£’million

Net interest income 37 7.9 – – – – – – 37 7.9

Net fee and commission income 93.2 – – – – – – 93.2

Net gains on sale of assets (101.4) – – – – 101.4 – –

Other income 35.6 – (3.4) – – 0.2 – 32.4

Total income 405.3 – (3.4) – – 101.6 – 503.5

General operating expenses (489.0) – 3.4 31.1 21.3 – 0.1 (433.1)

Depreciation and amortisation (7 7. 3) – – – – – – ( 7 7.3 )

Impairment and write-offs of property, plant, equipment and intangible assets (44.0) 44.0 – – – – – –

Total operating expenses (610.3) 44.0 3.4 31.1 21.3 – 0.1 (510.4)

Expected credit loss expense ( 7.1) – – – – – – (7.1)

Loss before tax (212.1) 44.0 – 31.1 21.3 101.6 0.1 (14.0)

Year ended 31 December 2023

Statutory

basis

£’million

Impairment

and write-off of

property, plant,

equipment

and intangible

assets

£’million

Net C&I

costs

£’million

Transformation

costs

£’million

Remediation

costs

£’million

Holding

company

insertion costs

£’million

Capital

raise and

refinancing

£’million

Underlying

basis

£’million

Net interest income 411.9 – – – – – – 411.9

Net fee and commission income 90.4 – – – – – – 90.4

Net gains on sale of assets 2.7 – – – – – – 2.7

Other income 143.9 – (2.4) – – – (100.0) 41.5

Total income 648.9 – (2.4) – – – (100.0) 546.5

General operating expenses (502.9) – 2.4 20.2 – 1.8 26.0 (452.5)

Depreciation and amortisation ( 7 7.7 ) – – – – – – ( 7 7.7 )

Impairment and write-offs of property, plant, equipment and intangible assets (4.6) 4.6 – – – – – –

Total operating expenses (585.2) 4.6 2.4 20.2 – 1.8 26.0 (530.2)

Expected credit loss expense (33.2) – – – – – – (33.2)

Profit/(loss) before tax 30.5 4.6 – 20.2 – 1.8 (74.0) (16.9)

1. Relates to the capital raise in Q4 2023.

Alternative performance measures (unaudited) continued

228

Metro Bank Holdings PLC Annual Report and Accounts 2024

Abbreviations

AGM Annual General Meeting

ALCO Asset and Liability Committee

ATM Automated teller machine

BAME Black, Asian and Minority Ethnic

BBLS Bounce Back Loan Scheme

BEIS Department of Business, Energy and Industrial Strategy

bps Basis points

C&I Capability and Innovation Fund

CEO Chief Executive Officer

CET1 Common Equity Tier 1 Capital

CFO Chief Financial Officer

CMA Competition and Markets Authority

CoF Cost of Funds

CRD Capital Requirements Directive

CRO Chief Risk Officer

D&I Diversity and inclusion

DNED Designated Non-Executive Director for Colleague Engagement

DTR Disclosure Guidance and Transparency Rules

DTV Debt-to-value

DVRP Deferred Variable Reward Plan

EAD Exposure at default

ECL Expected credit losses

EPC Energy Performance Certificate

ERC Executive Risk Committee

ESG Environmental, social, and governance

ExCo Executive Committee

FCA Financial Conduct Authority

FRC Financial Reporting Council

FSQS Financial Services Qualification System

FTE Full time equivalent

FVOCI Fair value through other comprehensive income

GDP Gross domestic product

GHG Greenhouse gases

HMO House in multiple occupation

HMRC His Majesty’s Revenue and Customs

HPI House price index

IAS International Accounting Standards Board

ICAAP Internal Capital Adequacy Assessment Process

IFRS International Financial Reporting Standards

ILAAP Internal Liquidity Adequacy Assessment Process

IRB Internal ratings-based

KPI Key performance indicator

LGBTQ+ Lesbian, gay, bisexual, transgender, queer plus

LGD Loss given default

LIBOR London Inter-Bank Offered Rate

LTI Loan-to-income

LTIP Long-Term Incentive Plan

LTV Loan-to-value

MOs Model Overlays

MPs Members of Parliament

MREL Minimum requirement for own funds and eligible liabilities

MSc Master of Science

NED Non-Executive Director

NICs National insurance contributions

NIM Net Interest Margin

NPL Non-performing loan

OFAC Office of Foreign Assets Control

PAYE Pay as you earn

PCAF Partnership for Carbon Accounting Financials

PD Probability of default

PMA Post model adjustments

POCI Purchased or originated credit impaired

PRA Prudential Regulation Authority

PwC PricewaterhouseCoopers LLP

REGO Renewable Energy Guarantee of Origin

RLS Recovery Loan Scheme

ROC Risk Oversight Committee

RoTE Return on Tangible Equity

RWAs Risk-weighted assets

SBTi Science-Based Targets Initiative

SICR Significant increase in credit risk

SME Small or medium-sized enterprise

SONIA. Sterling Overnight Index Average.

SVAP Shareholder Value Alignment Plan

TCFD Task Force on Climate-related Financial Disclosures

TFSME Term Funding Scheme with additional incentives for SMEs

UK United Kingdom

VAT Value added tax

VIU Value in use

229

Additional informationFinancial statementsStrategic report Risk reportGovernance

Metro Bank Holdings PLC Annual Report and Accounts 2024

Shareholder information

Annual General Meeting

Our 2025 AGM will be held on 20 May 2025. Full details for the arrangements for the AGM and details of

the resolutions to be proposed, together with explanatory notes, will be set out in the Notice of AGM to be

published on our website.

Shareholder profile

Shareholder profile by size of holding as at 31 December 2024

Range

Total

number of

holdings

Percentage

of holders

Total number

of shares held

at 31 December

2024

Percentage

of total

0 – 100 222 25.58% 8,638 0.00%

101 – 500 135 15.55% 35,536 0.01%

501 – 5,000 235 27.07% 439,509 0.07%

5,001 – 100,000 157 18.09% 4,47 7,925 0.67%

100,001 – 500,000 59 6.80% 14,890,682 2.21%

500,000+ 60 6.91% 653,127,333 97.05%

Total 868 100.00% 672,979,623 100.00%

Shareholder profile by category as at 31 December 2024

Category

Number of

holders

Percentage

of holders

within type

Shares held at

31 December

2024

Percentage

of issued

share capital

Private shareholders 569 65.55% 1,208,491 0.18%

Banks 2 0.23% 44,929 0.01%

Nominees and other institutional investors 297 34.22% 671,726,203 99.81%

Total 868 100% 672,979,623 100.00%

Forward-looking statements

This Annual Report and Accounts contains statements that are, or may be deemed to be, forward-looking

statements. Forward-looking statements typically use terms such as ‘believes’, ‘projects’, ‘anticipates’,

‘expects’, ‘intends’, ‘plans’, ‘may’, ‘will’, ‘would’, ‘could’ or ‘should’ or similar terminology. Any forward-looking

statements in this Annual Report and Accounts are based on our current expectations and, by their nature,

forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond

our control, that could cause our actual results and performance to differ materially from any expected

future results or performance expressed or implied by any forward-looking statements. As a result, you

are cautioned not to place undue reliance on such forward-looking statements. Past performance should

not be taken as an indication or guarantee of future results, and no representation or warranty, expressed

or implied, is made regarding future performance. No assurances can be given that the forward-looking

statements in this Annual Report and Accounts will be realised. We undertake no obligation to release the

results of any revisions to any forward-looking statements in this Annual Report and Accounts that may

occur due to any change in its expectations or to reflect events or circumstances after the date of this

announcement and we disclaim any such obligation.

Registrars

We have appointed Equiniti Limited to maintain our register of members. Shareholders should contact

Equiniti using the details below in relation to all general enquiries concerning their shareholding:

Equiniti Limited

1,2

Aspect House

Spencer Road

Lancing

West Sussex

BN99 6DA

Telephone: 0371 384 2311

International callers: +44 (0) 371 384 2311

1. Equiniti Limited and Equiniti Financial Services Limited are part of the Equiniti group of companies. Company share

registration, employee scheme and pension administration services are provided through Equiniti Limited, which is registered

in England and Wales with No. 6226088. Investment and general insurance services are provided through Equiniti Financial

Services Limited, which is registered in England and Wales with No. 6208699 and is authorised and regulated by the UK

Financial Conduct Authority.

2 Lines are open from 8.30am to 5.30pm (UK time) Monday to Friday, excluding public holidays in England and Wales.

Registered and other offices

Our registered office and head office is:

One Southampton Row

London

WC1B 5HA

Telephone: 0345 08 08 500/0345 08 08 508

Website: metrobankonline.co.uk

Unsolicited mail

We are required by law to make our share register available on request to unconnected organisations.

As a consequence, shareholders may receive unsolicited mail, including mail from unauthorised

investment firms. If you wish to limit the amount of unsolicited mail received, please contact the

Mailing Preference Service, an independent organisation whose services are free for consumers.

Further details can be obtained from:

Mailing Preference Service

MPS Freepost LON 20771

London

W1E 0ZT

Website: mpsonline.org.uk

230

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Metro Bank Holdings PLC

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