Impact of Banking Sector Changes on Metro Bank's Performance

Modern banking

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Introduction of Metro bank along with its nature and business activities...................................1
Critically analysis of the bank’s assets & liability and income structure that has changed over
the time........................................................................................................................................1
Critically evaluating bank’s performance over the period by using ratio analysis......................3
Critically evaluating the ways in which banking sector changes impacts the Metro bank’s
performance.................................................................................................................................8
Assessment of an expected future performance of Metro bank..................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The concept of modern banking is referred as the banking activities which are conducted
using electronic modes. This banking approach no longer follows the traditional way and is
highly based upon the technology (Begenau and Landvoigt, 2018). The main aim of this report is
to build an understanding regarding traditional and modern financial intermediary theories along
with analysing financial performance of a bank and how it can be managed. For this purpose, a
large scale listed bank has been selected which is the Metro bank. This bank is a commercial
financial intermediary that is listed on the London stock exchange.
In this report, detail information of the selected bank is discussed along with its nature and
business activities. Furthermore, in this report assets and liabilities along with income structure
of Metro bank are also critically analysed that are supported by graphs and tables. The method of
ratio analysis is used for analysing the bank’s performance on the basis of four distinct ratios.
Lastly, in this report an analysis have been made regarding the factors which impact on the
selected bank’s performance.
MAIN BODY
Introduction of Metro bank along with its nature and business activities
Metro bank is a public limited company which operates in United Kingdom. The nature of
this bank is that it is a retail and commercial bank which sells its banking products and services
to earn profit and ensure growth and survival. The headquarters of this bank is in London, United
Kingdom and is operating in total 70 locations. The business activities of Metro bank include
accepting deposits, granting loans and the products of this bank include credit cards, consumer
banking and corporate banking (Annual reports of Metro Bank Plc. 2020).
This bank is a high revenue generating organisation which is listed at London stock
exchange.
Critically analysis of the bank’s assets & liability and income structure that has changed over the
time
Metro Bank is a large scale bank which is currently facing record revenues. The income
structure of this company is analysed below by considering their net sales from previous years.
Year 2015 2016 2017 2018 2019
1

Turnove
r
120.2 195.11 293.7 404.1 415.6
Net
profit
-49.2 -16.75 10.8 27.1 -182.6
The income which Metro Bank plc. has acquired is presented in a graph above which this
company has earned from their sales revenue. It can be seen from above graph that the sales
revenue of this company is continuously increasing every year which implies that this bank is
continuously associating with new clients. The pattern of increasing revenue is not followed by
the net profit of Metro Bank Plc. as the till 2018, the profit of this company was increasing but in
year 2019, Metro Plc. faced immense loss of 182 thousand pounds. The income of Metro Plc. has
changed over time and the biggest reason behind the losses of this company is the BREXIT
impact which declines the income of this company in year 2019.
Assets and liabilities of Metro Bank Plc. are gathered from the annual reports of this
company. This information is presented below using a graph and table.
2019 2018 2017 2016
Total assets 21,400,00
0
21,647,00
0
16,355,35
5
10,057,28
8
Total
liabilities
19,817,00
0
20,244,00
0
15,259,46
6 9,252,753
2