May 26, 2020 / 1:24 PM / a month ago

Britain's Metro Bank faces 'significantly higher' bad loans due to pandemic

LONDON, May 26 (Reuters) - Metro Bank has warned it faces “significantly higher” volumes of bad loans due to the economic crunch caused by the COVID-19 pandemic, in a statement at its annual investor meeting on Tuesday.

The British challenger lender said the level of impairments would depend on the magnitude and length of the slowdown and it had seen a reduction in customer transaction volumes, which it said may result in lower than expected fee income.

Chief Financial Officer David Arden reiterated the company would consider asset sales to bolster its balance sheet if necessary.

Metro Bank entered the crisis in bad shape after a loan book error last year decimated its stock market value, forced out its top bosses, and triggered an ongoing regulatory investigation.

In a brief trading update earlier this month, Metro said it would disclose detail on how the COVID-19 pandemic was affecting its customers in its half-year results but said its capital buffers remained above regulatory minimums.

Metro Bank faced a backlash at its investor meeting last year when a significant minority of shareholders opposed several resolutions including its pay report and the re-election of several board members, although all the resolutions passed.

Voting results from this year’s AGM will be published later on Tuesday. (Reporting by Iain Withers, editing by Sinead Cruise)

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