Metro Bank confirms Sale of GBP2.5 billion Residential Mortgage Portfolio to NatWest Group PLC

DJ Metro Bank confirms Sale of GBP2.5 billion Residential Mortgage Portfolio to NatWest Group PLC

Metro Bank Holdings PLC (MTRO) 
Metro Bank confirms Sale of GBP2.5 billion Residential Mortgage Portfolio to NatWest Group PLC 
26-Jul-2024 / 07:00 GMT/BST 
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      Metro Bank Holdings PLC (LSE: MTRO LN) 
26 July 2024 
 
 
Metro Bank Holdings PLC 
 
Legal Entity Identifier: 984500CDDEAD6C2EDQ64 
 
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF REGULATION (EU) NO. 
596/2014 ON MARKET ABUSE, AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. 
FOR IMMEDIATE RELEASE 
 
Metro Bank confirms Sale of GBP2.5 billion[1] Residential Mortgage Portfolio to NatWest Group PLC 
Highlights 
   -- Sale allows acceleration of asset rotation 
   -- Earnings are improved in 2024 and 2025 from this sale 
   -- NIM increases post transaction completion 
   -- TFSME[2] to be repaid from proceeds 
   -- Pro forma MREL ratio improves by c114bps upon transaction completion 
   -- Mortgages being sold were originated in a lower rate environment, meaning the mortgage sale results in a 
  day one loss of cGBP105m at completion 
Summary 
Metro Bank today confirms entering into an agreement to sell a portfolio of approximately GBP2.5 billion prime 
residential mortgages (the "Portfolio") to NatWest Group PLC ("NatWest") for a cash consideration[3] of up to GBP2.4 
billion. On completion[4] of the transaction, the sale is expected to reduce risk weighted assets by cGBP824m, and result 
in a 31 December 2023 pro-forma improvement in Metro Bank's total capital plus MREL ratio of c114bps from 22.0% to 
23.1% and CET1 ratio by c5bps. 
The sale of the Portfolio is in line with Metro Bank's strategy to reposition its balance sheet and enhance 
risk-adjusted returns on capital. The transaction is earnings, NIM and capital ratio accretive, and the sale creates 
additional lending capacity to enable Metro Bank to continue its asset rotation towards higher yielding commercial, 
corporate, SME lending and specialist mortgages. 
The Portfolio has a gross book value of GBP2.5 billion with a weighted average rate of c3.79%. It consists of primarily 
repayment mortgages with an average remaining fixed-rate term of c2.3 years. The Portfolio has a similar geographic 
distribution to Metro Bank's wider mortgage portfolio and has a weighted average current loan to value of c62%. 
The 4.2% discount on gross book value results in an estimated cGBP105 million loss on sale because the loans were 
originated in a lower rate environment. 
Commenting on the disposal, Daniel Frumkin, Metro Bank's Chief Executive Officer, said: 
"The sale of part of our residential mortgage portfolio is earnings, NIM and capital ratio accretive. The sale is 
in-line with Metro Bank's strategy to reposition its balance sheet for higher risk adjusted returns on regulatory 
capital. The additional lending capacity provided by this sale will enable us to continue our shift into high yielding 
assets in niche and underserved markets and become a specialist lender of choice." 
 1. Cut-off as at 31-March-24 
 2. Bank of England Term Funding Scheme with additional incentives for SMEs 
 3. The final purchase price will include adjustments and reconciliations to reflect certain limited 
  exclusions, costs and collections in the run up to completion of the transaction 
 4. Completion of the transaction is conditional on a satisfactory response from the Competition & Markets 
  Authority 
 
Enquiries: 
Metro Bank PLC Investor Relations 
[e-mail] 
Metro Bank Media Relations 
Mona Patel 
[phone] 
[e-mail] 
Teneo 
Haya Herbert-Burns/Anthony DiNatale 
[phone]/ [phone] 
[e-mail] 
Important notices 
This announcement is not intended to, and does not, constitute or form part of any offer, invitation or solicitation of 
any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the 
solicitation of any vote or approval in any jurisdiction, whether pursuant to this announcement or otherwise. 
This announcement is for information purposes only and is not intended to and does not constitute or form part of any 
offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for any securities in 
any jurisdiction. 
 
 
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Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse 
Regulation (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
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ISIN:      GB00BMX3W479 
Category Code: DIS 
TIDM:      MTRO 
LEI Code:    984500CDDEAD6C2EDQ64 
OAM Categories: 2.2. Inside information 
Sequence No.:  336602 
EQS News ID:  1954663 
 
End of Announcement EQS News Service 
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July 26, 2024 02:00 ET (06:00 GMT)