Metro Bank to axe 20% of jobs and review branch opening hours in push to cut costs
After its refinancing deal received the final approval of its shareholders earlier this week, Metro Bank has revealed it plans to review its branch opening hours and cut 20% of its workforce as part of a cost-cutting drive.
The job cuts form part of the bank’s cost reduction plan
The UK high-street bank says the cuts to its staff headcount are part of an effort to create cost savings of up to £50 million a year. It adds the “cost reduction plan” is “expected to complete during the first quarter of 2024”.
Despite the savings, it is also expected to incur a one-off restructuring fee of around £10-15 million, but says that the figure is “lower than previously anticipated”.
The job cuts are forecast to make around 800 roles at the bank redundant.
Metro Bank says it is now pursuing a “cost-efficient business model” and has also revealed its plans to invest in automation across its service and back-office functions.
It will also seek to develop its digital channels, circling the digitisation of deposits as a key priority.
Its latest investor update describes an operational strategy to “deploy liquidity into higher yielding corporate and commercial lending” through its risk-weighted capital.
The bank says it plans to “selectively streamline” its lending activities to “focus on relationship banking and maximise risk-adjusted returns on regulatory capital”.
While it looks to tap the convenience of digital, the bank is also reviewing the opening hours of its physical branches as it eyes up additional cost savings.
Metro Bank had previously sought to differentiate itself as a high-street bank with extended branch opening hours, ensuring heightened accessibility.
However, it says that it is now “reviewing seven day opening and extended store hours” across its network of 75 branches in the UK, adding it is “in discussions with the FCA about the customer implications of any such changes”.
While this review is being conducted, no official decision to change its opening hours has been reached yet.
The news comes after its shareholders cast a majority vote this month in favour of a new refinancing deal.
The £925 million deal, which has been brought together by Morgan Stanley and Moelis, includes £600 million in debt financing and an additional £325 million in equity capital.
CEO Daniel Frumkin says the deal will enable Metro Bank to “accelerate its growth plans, with the new capital allowing us to unlock the potential in the business and deliver sustainable profitable returns”.
