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Metro Bank is an intriguing opportunity for investors in the UK banking sector. As a relatively new entrant in the industry, Metro Bank has captured attention for its focus on high-touch customer service and technological innovation. With expansion plans across the UK, Metro Bank aims to capture a more significant market share in the coming years.

In this article, we’ll explore why Metro Bank stands out from legacy banks, its share price forecast and price factors, as well as how to invest in the company.

 

Why is Metro Bank Better than Other Banks?

Metro Bank aimed to revolutionize banking in the UK. Frustrated by poor service from incumbent banks, founder Vernon Hill introduced a model focused on customer convenience. The bank offers extended hours, with some branches open as late as midnight, seven days a week. It also provides drive-through lanes and safe deposit boxes – uncommon among UK lenders.

This high-touch approach aims to build lasting relationships with clients. Metro Bank’s efforts have paid off, as its net promoter score – a measure of customer satisfaction – reached 79 in 2021 compared to -20 to +5 for large UK banks. The company attracted loyal, engaged customers by focusing on service alongside technology.

Additionally, the bank’s branch-centric strategy sets it apart in an industry shifting digital. It now operates 67 retail stores and plans to increase to 120 by 2025. The physical expansion allows Metro Bank to acquire customers across new geographies. Branches also support more complex banking needs while enabling vital community engagement.

The company has an app and online portal to provide customers with accessible, digital self-service options for basic transactions. The bank has also introduced application programming interfaces (APIs) to link its systems with popular financial apps. This combination of high technology and touch makes Metro Bank convenient for digital and in–person customers.

 

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Metro Bank Share Price Outlook

 

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When assessing the investment prospects for Metro Bank, it’s instructive to review recent share price performance. The Metro Bank share price traded between £36 and £149 over the past year, demonstrating continued volatility.

After opening 2022 near £130 per share, the Metro Bank share price slid to below £40 by year’s end – a drop of over 70%. This reflected broader economic uncertainty weighing on UK banking equities.

However, zooming into the numbers reveals cause for tempered optimism. The Metro Bank share price rebounded over 30% from December lows in early 2023 before pulling back again. This may suggest the selloff overshot fundamentals, with the shares oversold.

Many analysts covering Metro Bank stock now see stabilization on the horizon. As the bank delivers on expansion plans, earnings could recover by 2024-2025 – potentially lifting valuation metrics.

If Metro meets growth targets and limits further execution setbacks, improving profitability may shift sentiment. And with the stock trading at extreme discounts to book value, the upside could follow.

Metro Bank's turnaround hopes rely on flawless execution across technology, service quality, risk management, and cost control. Slip-ups in any area may lead investors to reassess the investment case.

Predictions come loaded with uncertainty, and the path forward is unlikely linear. Risks around execution, lending practices, and market conditions could easily disrupt the bull case.

 

How to Invest in Metro Bank Stocks?

 

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Several channels exist for investors inspired by Metro Bank’s vision to gain exposure to its shares. Like purchasing other public equities, investors can trade Metro Bank stock through online brokerages and trading platforms.

Leading web and investment apps like markets.com offer access to UK-listed companies like Metro Bank. Investors can buy and sell shares through these mobile and web-based platforms.

The platform allows setting buy and sell orders, establishing price alerts, and reviewing real-time pricing data and financial statements. This enables investors to make informed decisions and react to news flow impacting the stock.

At markets.com, we also give access to futures, forex, and CFDs for advanced traders. But for general investing purposes, most retail investors stick to simple stock trading functionality.

Notably, associated trading fees, minimum investments, and leverage options differ across platforms. So, investors should research brokerages to find one fitting their strategies and experience levels.

Learn how to open a trading account: How to open and close a trade in your markets.com account

 

What Influences the Metro Bank Share Price?

Metro Bank’s financial results remain the primary lens for shareholders valuing the stock. Metrics like customer growth, deposits, lending activity, revenue, margins, profitability, and asset quality indicate operating momentum.

Top-line gains seem probable as the bank delivers on expansion plans and brings new branches online. And if Metro Banks translates customer acquisition into earnings growth while limiting risk, an upside for the stock would follow.

However, financial markets often over-emphasize short-term results, extrapolating near-term trends into the future. This dynamic explains the high volatility for Metro Bank share prices as quarterly metrics prompt knee-jerk reactions.

Instead, long-term investors might focus more on management execution against strategic aims. Progress on technology platforms, new branching, branding efforts, and talent recruitment ultimately drive customer loyalty and sustainable profits.

Additionally, prevailing economic conditions sway sentiment across banking shares, impacting the Metro Bank share price. Variables like interest rates, inflation, regulation, and credit conditions systemically affect financial institutions.

Since these factors remain outside managerial control, they inject uncertainty into financial forecasting and stock performance for banks like Metro. Yet for buy-and-hold investors, changing macro conditions tend to average out over long periods.

You might also like to read: 5 common trading mistakes to avoid

 

To Wrap Things Up

The Metro Bank share price offers an exciting opportunity but comes loaded with uncertainty. Its vision for high-touch, tech-enabled banking aims to capture market share from incumbent UK lenders. 

If this strategy succeeds, profits and Metro’s valuation may recover from current lows. However, risks around execution, regulations, and broader economic shifts could disrupt the investment case.

Given the many variables impacting performance, traders should carefully research Metro’s business model, financials, and stock price drivers before buying its volatile shares. Take time to analyze the risks and growth prospects before deciding if Metro Bank stock fits your investment objectives.

Learn and trade with Markets.com: The ultimate trading community!

“When considering “CFDs” for trading and price predictions, remember that trading CFDs involves a significant risk and could result in capital loss. Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be considered investment advice.’’

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