Metro Bank admits capital relief delayed

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UK challenger bank Metro has conceded it will not get capital relief from the Bank of England until at least 2024, in the latest of a series of blows to its efforts to employ the kind of internal models used by larger banks to cut capital charges.

“The [Prudential Regulation Authority] has indicated that at this stage more work is required by the company which means approval will not be attained during 2023,” the bank said on Tuesday. “Whilst Metro Bank continues to engage with the PRA on its application, there is no certainty that approval will be obtained.”

Metro has spent five years pursuing its bid to use internal models, which allow banks to use their own history to calculate the riskiness of loans rather than relying on more punitive standardised approaches.

Other challenger banks, such as Close Brothers and Paragon, have also faced years of delays to approvals that could save them hundreds of millions of pounds.

The PRA did not immediately reply to requests for comment.