Citi initiates Metro Bank at Neutral with 183p target

Investing.com·5 Oct 2026·

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Summary · why it matters

Citi initiated coverage of Metro Bank with a neutral rating and a 183 pence target price on Monday, implying about 11% upside from the bank's reference price of 165 pence. The brokerage said Metro's shift from restructuring to growth offers upside but execution risks remain in newer lending segments, and it is more cautious than management on the pace of growth, forecasting a 6% loan compound annual growth rate through 2028 against management's 8%-11% target. Citi expects non-interest-bearing deposits to rise to around 50% by 2029 and the cost of deposits to fall below 1%, and sees the net interest margin reaching 4.1% in 2028. The bank is repositioning its balance sheet toward corporate lending, asset finance and specialist mortgages, with corporate loans expected to account for more than 70% of total loans by 2029 versus 44% in 2025. Citi forecasts attributable profit rising from £52 million in 2025 to £115 million in 2027 and £151 million in 2028, with dividends resuming in 2027 at a 20% payout ratio, while the cost-income ratio improves from 75.4% to 61.6% by 2028 but stays above management's 50%-55% target.