Metro Bank reported that its specialist mortgage lending jumped by greater than three-quarters in the primary six months of the 12 months, though its total house mortgage numbers have been flat.
The agency mentioned that its gross retail mortgage lending got here in at £5.2bn in the half-year to the top of June in a buying and selling assertion, broadly flat from the top of final 12 months.
However, the enterprise added that its specialist mortgage lending jumped by 78% in the interval to £1.2bn. Its prime house mortgage underwriting fell 12% to £4bn.
The agency has shifted in the direction of landlord lending and residential underwriting to debtors with sub-prime credit score histories over the previous three years, or so.
Metro Bank chief government Daniel Frumkin mentioned: “We proceed our strategic shift to company, business, and SME lending, and specialist mortgages at tempo.
Frumkin added: “We proceed to improve our specialist proposition and launched two additional merchandise, homes in a number of occupancy and multi-unit freehold blocks in July.
“New lending, along with attrition of legacy portfolios at decrease yields, has led to a 49 foundation factors year-on-year enchancment in total yield.”
The financial institution added that its “mortgage portfolio is concentrated inside London and the South East, which is consultant of our unique buyer base and retailer footprint.
“We are increasing our footprint, which can scale back the geographical focus of lending over time.”
The financial institution, which has a turbulent historical past of writedowns and mergers, is reported to have been approached a couple of takeover by funding agency Pollen Street Capital in June. Neither agency has commented.
Also, final September, the financial institution bought a portfolio of round £2.5bn of prime residential mortgages to NatWest.
Frumkin mentioned: “We proceed to run off low-yielding legacy portfolios, and exchange them with high-yielding company, business and SME lending and specialist mortgages.”
The financial institution posted an underlying pre-tax revenue of £45.1m, greater than tripling the £12.8m it reported in the earlier six-month interval.
