(Reuters) - Metro Bank (L:MTRO) posted a 131 million pounds pretax loss on Wednesday, capping a year dominated by an accounting scandal that sent its stock into a tailspin, forced top bosses to quit and led some customers to shut accounts.
The British lender was set up a decade ago as one of a handful of customer-friendly operations hoping to challenge the country's dominant high street banks.
Separately, the company also said it will return 50 million pounds of the original 120 million pounds it was awarded last year by the Banking Competition Remedies' Capability & Innovation Fund, after revising some ambitious growth targets.
Metro said it would now open a total of 15 rather than 30 stores in the north of England by 2025.
The lender's market value shrank nearly 90% over the course of 2019 as it faced up to an investigation by regulators, after it admitted it had under-reported exposure to higher-risk loans by almost a billion pounds.
Its founder and Chairman Vernon Hill, as well as Chief Executive Craig Donaldson, have since left the company.
The bank, which named interim CEO Frumkin to the role permanently last week, reported an underlying pretax loss of 11.7 million pounds for the 12 months ended Dec. 31 from a profit of 50 million pounds a year earlier.
Deposits fell by 8% to 14.48 billion pounds as an increase in deposits from retail customers failed to offset hundreds of millions of pounds of withdrawals by business customers spooked by the accounting error.
Metro's net interest margin - a key measure of profitability - dipped to 1.51% from 1.81%.
The company said it would maintain tight control on its costs by revising its growth plans, adding that it would consider asset disposals.
Known for its glossy branch network and customer perks such as pet treats and weekend opening hours, Metro was the first bank to be granted a high street banking licence in Britain in 150 years in a bid to foster more competition.
"Our financial performance reflects a very challenging year for Metro Bank," Chief Executive Officer Dan Frumkin said.