Analyzing Metro Bank's Performance and Changes in the Banking Sector

MODERN
BANKING

Table of Contents
INTRODUCTION...........................................................................................................................3
Overview..........................................................................................................................................3
Critically analyze how bank’s income statement and balance sheet changed over time.................4
Critically analyze the bank’s performance over the selected period using ratios............................6
Evaluate how the banking sector changes have impacted Metro Bank performance......................9
a. Changes in bank regulation....................................................................................................10
b. Increase impact of FinTech developments on banking business...........................................10
c. Consolidation in the banking sector of the particular country...............................................11
d. Other issues occur changes in the global banking markets...................................................11
Assessment of the expected future performance of Metro Bank...................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
APPENDICES...............................................................................................................................14

INTRODUCTION
This project consists of project report of commercial bank which is Metro Bank; having
international business all over the world. This project report starts with overview of Metro Bank
in terms of its nature and business activities. Assessment of changes in bank’s asset and liability
and income structure will show variance in the structure of bank through analysis of past 9 years
report of selected bank. Metro Bank financial performance has been analyzed through financial
key performance indicators such as profitability, efficiency, asset quality and capital adequacy
ratios. Also changes of banking sector like in bank regulation, impact of FinTech developments
on banking business, etc. on performance of Metro Bank has been evaluated.
Overview
Metro Bank. is an American multinational investment bank and financial services company
headquartered in New York City. It comes under one of the top 50 valuable bank all over the
world by market capitalization (MTRO METRO BANK PLC ORD 0.0001P, 2020).
Metro Bank is considered a universal bank and custodian bank. The Metro Bank brand, is used
by the departments of investment banking, asset management, private banking, private asset
management, and treasury and securities services.
Nature of business and activities: It is a major provider of various investment banking and
financial services. Trustworthy activity within private banking and private asset management is
carried out under Metro Bank. The brand is used for credit card services in the United States and
Canada, the bank's retail banking activities in the United States, and commercial banking. Both
the retail and commercial bank and the bank's corporate headquarters are located at 270 Park
Avenue in Midtown Manhattan, New York City.

Critically analyze how bank’s income statement and balance sheet
changed over time
Income Trends: Here income trends show changes in components of income statement like
revenue, cost of goods sold (COGS), gross profit and net profit (Vogel, 2016). The income trend
graph has been shown below:
2019 2018 2017 2016 2015 2014 2013 2012 2011
$0
$20,000
$40,000
$60,000
$80,000
$1,00,000
$1,20,000
$1,40,000
$1,60,000
Income Trends
Revenue
COGS
Gross Profit
Net Profit
Interpretation: Graph shows continuous growth in revenue bar from 2015 onwards; before this
Metro Bank has shown declining trend from 2011 to 2015. But due to good strategy and impact
of technological changes; company has taken advantage of this and increases its market share
from 2015 onwards to $140,000 from $125,000 in 2011. With the growth in revenue; COGS is
also increasing but with lower pace which helps company in achieving more gross profit
(Myšková & Hájek, 2017).
The gap between green and blue line indicates COGS; minimum gap indicates less contribution
towards expenses. But on the other hand; the huge gap between Gross profit bar and net profit
bar shows large proportion of operating expenses by Metro Bank. As Bank doesn’t have
manufacturing activities; it only deals providing services. Due to which; large amount of money
is invested towards paying salaries, office expenses and other operating expenses.