Metro Bank, the investor-backed British bank started by former Commerce Bancorp chief Vernon Hill of Moorestown, N.J., has more than doubled in size over the past year, to $5.5 billion in loans and investment assets at its 31 "stores" in greater London. Deposits total $4.4 billion, loans total $2.4 billion, nearly half of that to small businesses.
With its high expansion and marketing costs -- the company plans up to 10 more branches this year -- Metro lost nearly $15 million in the last quarter, but still has a fat pile of capital, which Metro says totals 28% of risk-weighted assets, well within U.K. targets. Losses have dropped for "six straight quarters," the bank says.
Hill had planned to sell shares to investors before now. But with interest rates chronically low and bank profits elusive, he instead raised capital from U.K. and U.S. real estate investors and other private backers and has plowed it into boosting market share. Hill told me this morning he hopes to take Metro public next year. He has also been an investor in Philadelphia's Republic Bank and Harrisburg-based Metro Bank of Pa., two banks that have struggled to grow in the slow lending environment of the past few years.