Metro Bank is reducing its workforce by 1,000 employees and discontinuing its signature seven-day branch schedule, as it expands its cost-cutting initiatives following its autumn rescue agreement. 

The bank announced on Wednesday that it has increased its original £30 million cost-saving target, initially disclosed in October, to £50 million. This decision follows the elimination of approximately 200 more positions than originally anticipated, reported The Guardian. 

Additionally, Metro Bank now plans to achieve an additional £30 million in cost reductions by the end of the year, resulting in total savings of £80 million. Daniel Frumkin, the bank's CEO, mentioned that further job cuts are being considered, building upon the £44 million in cost savings achieved by reducing its workforce by 22% from 4,000 to 3,120 employees. 

Starting in April, Metro Bank will also revise its branch operating hours, including the closure of branches on Sundays, reducing hours in some locations, and transitioning certain branches to operate five days a week. 

"Based on the modelling we've conducted, we'll still maintain longer operating hours compared to any of our competitors on the high street. These adjustments are aligned with actual customer activity," Frumkin remarked. 

The reduction in operating hours has contributed to Metro's workforce reductions, primarily impacting staff in branches, as well as its risk, finance, and human resources teams, revealed the same report. 

Frumkin underscored that Metro had also downsized its board and executive team in the process. "This was a comprehensive effort from the top down, and no one was exempt from the need to identify savings," he stated. 

The expanded restructuring follows months after Metro, co-founded by the US billionaire Vernon Hill and established as the UK's first new high street lender in 150 years in 2010, secured a £925 million rescue package in October. 

This deal included significant investment from Colombian billionaire Jaime Gilinski Bacal, who acquired a 53% stake in Metro. The arrangement averted a potential breakup or acquisition of the UK high street lender, which faced upheaval after failing to persuade regulators to relax its capital requirements and permit it to hold less capital against mortgage risks. 

This decision left Metro with a balance sheet shortfall, leading to market uncertainty that prompted the emergency agreement. Benjamin Toms, an analyst at RBC Capital Markets, commented, "We believe there is a long road ahead, and execution will be key, but the refinancing package has provided management with the time to reshape the bank." 

Metro's cost-cutting measures coincided with the bank reporting a pre-tax profit of £30.5 million for 2023, a significant improvement from the £70.7 million loss recorded the previous year, marking its first statutory pre-tax profit since 2018. 

While Metro has not disclosed the exact amount of withdrawals during the autumn crisis, concerns over outflows prompted the bank to launch an attractive campaign to attract fresh funds. However, the campaign's success resulted in unexpected costs, leading Metro to aim for a reduction in its deposit base in 2024. 

Acknowledging that the bank is entering a transitional period, Metro's management anticipates further economic challenges and increased competition, which could impact revenue and profitability. 

Ed Firth, an analyst at KBW, remarked, "It remains unclear to us whether the franchise will be profitable in full-year 2024." Despite uncertainties, Metro remains committed to a strategy focusing on lending to businesses, particularly small- and medium-sized enterprises (SMEs), where it sees significant growth opportunities. The bank has significantly increased its approval of business loans, reflecting its ability to adapt to evolving priorities. 

Additionally, Metro plans to expand its branch network, particularly in areas identified as "SME hotspots," with 11 new branches set to open in the north of England. "I'm confident we are now a stronger business with stronger foundations," said Frumkin. 

"The path ahead is clear for us to become a structurally profitable business while remaining the number one community bank." Following the announcement, Metro Bank shares initially rose by as much as 0.6% but later declined, trading 4.7% lower by mid-afternoon.