Metro Bank (MTRO) - what’s the relevance of revenue per square foot!
A lender that stole the headlines this week was Metro Bank (MTRO), one of the so-called ‘challenger banks’ which arrived on the stock market via an ‘introduction’ and market cap of £1.6bn. The concept is delightful, we just aren’t clear how it’s going to deliver for shareholders
Metro is still loss making, which isn’t a great reference for a bank, but it’s early days and the newcomer has plenty of capital and some rich institutional backers in Blackrock and Fidelity, among others. Analysts at Jefferies praised Metro’s “unique model”, highlighting that revenue per square foot of £750, already places it among the UK’s top three retailers. We don’t see how revenue per square foot is a relevant measure for a bank, where the key is surely return on capital – we don’t know many retailers that have to carry heaps of regulatory capital! This little extract from…