Metro Bank is all set to slash approximately 800 jobs before the end of March and revaluate its distinctive seven-days-a-week branch structure following an intensified drive to curtail expenses following a recent multimillion-pound rescue deal.
This decision to reduce a fifth of its 4,000-member workforce comes after a comprehensive reassessment of the cost structure, revealing potential annual savings of up to £50 million, reported The Guardian.
The bank aims to achieve these savings by exploring automation opportunities and potentially scaling back operating hours across its 76 branches, a move initially estimated to save £30 million before the recent rescue deal of £925 million.
The rescue deal, secured in early October, prevented a potential breakup or acquisition by another UK bank. Instead, the Colombian billionaire Jaime Gilinski Bacal, now owning a 53% stake, assumed control of Metro Bank from its co-founder, the US billionaire Vernon Hill, who established the bank in 2010.
Bacal's reputation for rejuvenating struggling financial institutions, particularly in Latin America, aligns with Metro Bank's heightened cost-cutting drive. Staff costs presently contribute to about 45% of the bank's total expenditures, a significant factor for the first new UK high street lender in 150 years, initially known for its emphasis on in-person banking.
Daniel Frumkin, the CEO, emphasised the bank's commitment to maintaining its presence in stores and the high street while transitioning toward a more cost-effective business model. Frumkin highlighted that these strategic shifts, combined with other cost-saving initiatives, are anticipated to generate savings of up to £50 million annually.
Metro Bank plans to streamline its operations, investing in service and back-office automation while enhancing digital channels, particularly for deposit-related services. Despite a projected 20% reduction in headcount, the bank reaffirms its commitment to areas of growth, including plans to extend its branch network into northern England.
The bank intends to review its current seven-day opening and extended store hours, engaging in discussions with the Financial Conduct Authority to address potential impacts on customers arising from reduced operational hours.
Anticipated to result in a one-off charge ranging from £10 million to £15 million, the cost-cutting initiative is slated for completion by March.