ADVFN UK Market News

Author: Fiona Craig

  • FTSE 100 rises on hopes of easing Middle East tensions; Vistry plunges on margin warning

    FTSE 100 rises on hopes of easing Middle East tensions; Vistry plunges on margin warning

    UK equities moved higher on Wednesday after earlier weakness this week triggered by the outbreak of war in the Middle East over the weekend. Broader European markets also advanced as investors bet that geopolitical tensions could begin to ease.

    According to officials familiar with the situation, Iranian representatives have approached the CIA to explore potential terms to end the conflict, in what The New York Times described as an attempt to open a negotiating channel. While the development suggests a possible diplomatic shift, details about the proposed discussions remain unclear.

    As of 12:23 GMT, the blue-chip FTSE 100 index was up 0.6%, while the British pound rose 0.1% against the U.S. dollar to 1.3373. Elsewhere in Europe, Germany’s DAX gained 1.4% and France’s CAC 40 climbed 0.8%.

    UK corporate round-up

    Shares of John Wood Group PLC (LSE:WG.) slipped 0.9% after the Financial Conduct Authority completed its investigation into historical financial reporting issues at the company.

    Vistry Group PLC (LSE:VTY) dropped more than 17% after the housebuilder warned that profit margins will come under pressure in 2026 as it introduces pricing incentives to stimulate Open Market sales, even though its full-year 2025 adjusted profit before tax broadly met guidance. The company reported adjusted profit before tax of £268.8 million for 2025, compared with £263.5 million in 2024. Revenue fell 4% to £4.15 billion from £4.33 billion a year earlier. Total housing completions declined 9% to 15,658 units from 17,225, partly offset by a 3% rise in the average selling price.

    Shares in Weir Group PLC (LSE:WEIR) fell more than 8% after the mining equipment manufacturer reported full-year results that were largely in line with expectations. The stock had already climbed around 38% over the past year. The Glasgow-based group reported adjusted operating profit of £518 million for 2025, matching analyst consensus forecasts. Revenue reached £2.57 billion, representing 6% growth in constant currency. Adjusted earnings per share totaled 123.8p, also in line with projections. For 2026, Weir expects mid-single-digit organic revenue growth and a 50-basis-point improvement in margins.

    Shares of SIG (LSE:SHI) declined even though the building materials distributor reported a 28% increase in full-year underlying operating profit, as difficult weather conditions weighed on trading at the start of 2026. SIG posted underlying operating profit of £32.1 million for the year ended Dec. 31, 2025, up from £25.1 million a year earlier and within its guidance range of £30-35 million. Revenue slipped 1% to £2.59 billion, while like-for-like sales were flat year-on-year. The company recorded a statutory pre-tax loss of £61.7 million, compared with £44.8 million in 2024, after £29.7 million in non-cash impairment charges and £9 million in restructuring costs.

    Beazley PLC (LSE:BEZ) reported profit before tax of $1,146.5 million for 2025, down 19% from $1,423.5 million the previous year, as the specialty insurer navigated softer pricing conditions in the insurance market. The company nonetheless delivered its third consecutive year with profit above $1 billion. Insurance written premiums totaled $6,100.7 million, missing analyst forecasts by 2.1% and declining 1% from $6,164.1 million in 2024.

    Quilter PLC (LSE:QLT) announced record net inflows and a 6% increase in adjusted profit before tax to £207 million for 2025. The wealth manager also unveiled a £100 million share buyback programme and a new distribution policy. Total assets under management and administration rose 18% to £141.2 billion during the year, supported by £8.7 billion of net inflows and positive market performance. Core net inflows reached £9.1 billion, equivalent to 8% of opening assets, up from 5% in 2024.

    Metro Bank Plc (LSE:MTRO) reported underlying profit before tax of £98 million for the year ended Dec. 31, 2025, marking the highest level in its 15-year history and exceeding its cost-reduction targets. Net interest income increased 22% to £460 million, driving a 16% rise in underlying revenue to £585 million. Net interest margin reached 2.98% for the year, up 107 basis points year-on-year, with an exit margin of 3.17% in line with guidance. Underlying operating costs fell 7% year-on-year to £473 million, surpassing the bank’s targeted reduction of 4–5%.

    Meanwhile, the UK services sector recorded its tenth consecutive month of expansion in February, although the pace of new orders softened and job cuts continued, according to data from S&P Global. The S&P Global UK Services PMI Business Activity Index registered 53.9 in February, slightly below January’s five-month high of 54.0. A reading above 50 signals expansion. Service providers reported higher activity levels supported by gradually improving demand, with anecdotal evidence suggesting that improving client confidence this year helped release previously delayed demand.

  • Wood Group shares slip after FCA completes probe into past financial reporting

    Wood Group shares slip after FCA completes probe into past financial reporting

    Shares of John Wood Group PLC (LSE:WG.) declined 0.9% on Wednesday after the Financial Conduct Authority finalized its investigation into the company’s historical financial reporting.

    The regulator’s review examined the period from January 1, 2023, to November 7, 2024. Its conclusions were consistent with those of an independent assessment commissioned by Wood’s board following discussions with the company’s auditor in November 2024.

    Wood said it cooperated fully with the FCA throughout the course of the investigation.

    According to the regulator’s findings, the company has introduced a remediation and governance improvement plan to address the issues identified in the independent review and has already begun implementing the necessary measures.

    The inquiry centered on past financial reporting practices, although the company did not disclose detailed information regarding the specific issues identified.

  • Airbus chosen to enhance drone technology under European Defence Agency program

    Airbus chosen to enhance drone technology under European Defence Agency program

    Airbus SE (EU:AIR) has been awarded a contract by the European Defence Agency to further develop the capabilities of its CAPA-X unmanned aerial system, the company said on Wednesday.

    The initiative forms part of a broader set of projects scheduled to run over a 48-month period, with a combined budget of around €1.1 million.

    Airbus subsidiary Survey Copter has been selected to participate in the M2UAS project under the agreement with the European Defence Agency.

  • Oil extends rally as Middle East tensions threaten supply; Goldman revises forecasts upward

    Oil extends rally as Middle East tensions threaten supply; Goldman revises forecasts upward

    Oil prices moved sharply higher on Wednesday, building on strong gains from the previous two sessions as escalating hostilities between the United States, Israel and Iran intensified concerns about possible disruptions to global crude supplies.

    At 03:40 ET (08:40 GMT), Brent crude futures for May delivery rose 3.5% to $84.25 per barrel, while U.S. West Texas Intermediate crude futures climbed 3.4% to $77.10 per barrel.

    Both benchmarks had already finished nearly 5% higher on Tuesday, following roughly 7% gains earlier in the week. Brent prices also touched their highest level since July 2024.

    Markets focus on supply risks

    The conflict in the Middle East, which began over the weekend after coordinated U.S. and Israeli strikes on Iranian military targets killed Supreme Leader Ayatollah Ali Khamenei, continued to escalate on Wednesday. U.S. Admiral Brad Cooper, who commands American forces in the region, said more than 2,000 Iranian targets have been struck.

    Iran has retaliated by launching missiles and drones toward neighboring Arab countries that host U.S. military bases. Tehran has also issued warnings to global shipping operators and targeted oil tankers moving through the Strait of Hormuz, a narrow passage that carries roughly one-fifth of global oil shipments.

    The risk to traffic through Hormuz — a vital export route for crude from major producers such as Saudi Arabia, Iraq and the United Arab Emirates — has introduced a significant geopolitical risk premium into oil markets.

    “The disruption to oil flows through the Strait is starting to affect oil flows further upstream,” ING analysts said in a note.

    They also referenced reports indicating that Iraq has begun curtailing production at the Rumaila field, the country’s largest, as well as at West Qurna 2, with around 1.2 million barrels per day reportedly taken offline.

    Goldman upgrades crude outlook for 2026

    Goldman Sachs on Wednesday increased its second-quarter 2026 price forecasts, raising its expected Brent average by $10 to $76 per barrel and its WTI projection by $9 to $71.

    The bank said its projections assume that reduced flows through the Strait of Hormuz could lead to sharp declines in OECD inventories and Middle Eastern oil production during March.

    Goldman noted that risks around its forecast remain skewed to the upside, citing the possibility of prolonged export disruptions through the Strait and potential damage to oil production infrastructure.

    “If Hormuz volumes were to remain flat for 5 additional weeks, Brent prices would likely reach $100, a level associated with larger demand destruction to prevent inventories from falling to critically low levels,” the bank said in a note.

    That said, “the supply disruption tailwind could quickly turn into a demand destruction headwind. A prolonged conflict and sustained high prices may fuel oil-driven inflation and amplify economic risks stemming from renewed tariff uncertainty. That combination could weigh on consumption and ultimately pressure oil prices,” said Nikos Tzabouras, Senior Market Analyst at Tradu.com.

    Trump signals support for tanker transit through Hormuz

    Traders are also monitoring comments from U.S. President Donald Trump, who said the U.S. Navy could escort commercial vessels if required and promised government backing to help guarantee safe passage.

    “The promise of such guarantees comes as insurers are cancelling war risk coverage for vessels moving through the Strait of Hormuz,” ING analysts wrote.

    “This is welcome news, but clearly it won’t happen overnight,” they added.

    Although the military escalation has provided strong support for oil prices, signs that governments are working to secure shipping routes could limit further gains in the short term.

  • Gold rebounds after steep slide as Iran tensions revive safe-haven demand

    Gold rebounds after steep slide as Iran tensions revive safe-haven demand

    Gold prices rose during Asian trading on Wednesday, recovering part of the sharp losses seen in the previous session as investors reassessed demand for safe-haven assets amid escalating tensions between the United States and Iran and a strong rally in the U.S. dollar.

    Spot gold gained 1.2% to $5,150.63 per ounce by 01:45 ET (06:45 GMT), while U.S. gold futures advanced 0.8% to $5,166.40.

    The precious metal had dropped 4.5% on Tuesday as a surge in the dollar and higher U.S. Treasury yields weighed heavily on bullion prices.

    Strong dollar curbs gold’s upside

    The US Dollar Index held steady after climbing nearly 1.5% over the previous two trading sessions, reaching a six-week high overnight as investors sought safety and scaled back expectations for Federal Reserve rate cuts in the near term.

    A stronger dollar typically limits gains in gold because it makes the metal more expensive for buyers using other currencies, which can reduce global demand.

    At the same time, geopolitical risks in the Middle East helped provide some support to bullion. The conflict between the United States and Iran intensified after coordinated U.S. strikes on targets tied to Tehran triggered threats of retaliation from Iranian officials, raising fears of broader instability across the region.

    Investors are increasingly concerned that the confrontation could disrupt energy flows and potentially involve additional regional players.

    Rising oil prices complicate central bank outlook

    Oil prices remained elevated as markets evaluated the risk of supply disruptions, particularly along major shipping routes in the Gulf. Higher crude prices have added to inflation concerns, complicating the policy outlook for central banks worldwide.

    Analysts noted that gold is currently being pulled in two directions: safe-haven demand driven by geopolitical uncertainty on one side, and macroeconomic pressure from a stronger dollar and higher bond yields on the other.

    Among other precious metals, silver rose 3% to $84.44 per ounce after dropping more than 8% in the previous session.

    Platinum climbed 2.8% to $2,148.50 per ounce following a roughly 10% plunge on Tuesday.

    Benchmark copper futures on the London Metal Exchange edged up 0.8% to $13,049.33 per ton, while U.S. copper futures rose 1.1% to $5.89 per pound.

    In China, official PMI figures indicated that manufacturing activity remained in contraction territory, while private-sector surveys from RatingDog PMI pointed to stronger-than-expected expansion, highlighting mixed signals about the pace of economic activity in the country.

  • Bitcoin Holds Around $68K as Trump Backs Crypto Regulation While Iran Risks Weigh on Sentiment

    Bitcoin Holds Around $68K as Trump Backs Crypto Regulation While Iran Risks Weigh on Sentiment

    Bitcoin (COIN:BTCUSD) traded broadly steady on Wednesday, finding modest support after U.S. President Donald Trump called for stronger regulatory backing for the cryptocurrency sector.

    Still, lingering concerns about the ongoing U.S.–Iran conflict and its potential inflationary impact continued to pressure digital assets, limiting gains after a brief recovery earlier in the week.

    Bitcoin was little changed at $68,147.8 as of 01:30 ET. The world’s largest cryptocurrency had climbed toward the $69,000 level earlier in the week before surrendering part of those gains.

    Trump criticizes banks over stablecoin legislation, CLARITY Act delays

    In a social media post late Tuesday, Trump accused major U.S. banks of attempting to weaken the GENIUS Act — legislation aimed at regulating stablecoins — by slowing the progress of another key crypto bill, the CLARITY Act, in the U.S. Senate.

    “Banks are hitting record profits, and we are not going to allow them to undermine our powerful Crypto Agenda that will end up going to China, and other Countries if we don’t get The Clarity Act taken care of,” Trump said.

    “The Banks should not be trying to undercut The Genius Act, or hold The Clarity Act hostage. They need to make a good deal with the Crypto Industry,” the president said.

    According to a Politico report, Trump had privately met Coinbase Global Inc (NASDAQ:COIN) Chief Executive Officer Brian Armstrong shortly before publishing the post. Armstrong has been a vocal opponent of banning yield payments on stablecoins.

    The GENIUS Act, passed by Congress in June 2025, established a regulatory framework for stablecoins and prohibits issuers such as Tether from directly paying yields to token holders.

    However, third-party platforms — including cryptocurrency exchanges — remain able to offer yield products tied to stablecoins, something major banking groups argue creates a regulatory loophole.

    Banking lobby groups have been pushing to include a comprehensive ban on stablecoin yield payments in the CLARITY Act, a separate piece of legislation intended to define the broader market structure for the crypto industry.

    The House of Representatives approved the bill in July, but it has yet to pass the Senate. Disagreements over the treatment of yield payments have played a central role in the delay, with major banks arguing that returns generated from stablecoins should be regulated similarly to interest payments offered by traditional banks.

    Crypto prices today: altcoins trade narrowly as Iran tensions persist

    The wider cryptocurrency market moved within a tight range on Wednesday. Although hopes for clearer regulation in the United States provided some support, risk appetite remained subdued due to ongoing geopolitical tensions in the Middle East.

    Reports indicated that hostilities involving the United States, Israel and Iran entered a fifth consecutive day on Wednesday, with military actions against Tehran continuing.

    Concerns about the inflationary implications of the conflict — particularly if disruptions to global oil supply intensify — have weighed on markets, increasing fears that stubborn inflation could push major central banks toward more hawkish policy positions.

    As a result, risk-sensitive assets such as cryptocurrencies saw only limited upward momentum.

    Ether, the world’s second-largest cryptocurrency, declined 1% to $1,979.99, while XRP slipped 0.2% to $1.3594.

    Solana and BNB showed little movement, while Cardano underperformed with a decline of around 3%.

    Among meme tokens, Dogecoin dropped 2.6%, while the $TRUMP token fell 3.4%.

  • U.S. Futures Slip as Oil Advances with Iran Conflict Escalation — Key Market Drivers: Dow Jones, S&P, Nasdaq, Wall Street

    U.S. Futures Slip as Oil Advances with Iran Conflict Escalation — Key Market Drivers: Dow Jones, S&P, Nasdaq, Wall Street

    Futures tied to major U.S. equity benchmarks moved slightly lower on Wednesday as Iranian forces continued exchanging air strikes with the United States and Israel in a deepening Middle East conflict. Oil prices climbed as attention remained focused on the near halt of oil and gas shipping through the Strait of Hormuz off Iran’s southern coast. Gold rebounded after a stronger U.S. dollar had previously weakened the precious metal’s safe-haven appeal. CrowdStrike (NASDAQ:CRWD) issued annual guidance broadly in line with expectations, while reports suggest OpenAI may be evaluating a new agreement with NATO.

    Futures move lower

    U.S. stock futures pointed to a modest decline early Wednesday following volatile swings in the prior session, as investors tracked the widening conflict in the Middle East that could threaten global energy supplies.

    At 02:58 ET, Dow futures were down 109 points, or 0.2%. S&P 500 futures slipped 15 points, or 0.2%, while Nasdaq 100 futures fell 91 points, or 0.4%.

    Wall Street’s main indices ended Tuesday in negative territory, although they recovered some of the heavier losses seen earlier in the day. Rising U.S. Treasury yields contributed to the volatility, driven by expectations that surging oil prices could fuel inflation and push back potential interest rate cuts from the Federal Reserve.

    “While other government bond yields have shown similar patterns, the effect is particularly strong in the U.S. where a greater number of cuts had been priced in,” Bradley Saunders, North America Economist at Capital Economics, told Investing.com.

    The confrontation between Iran and U.S.–Israeli forces has now entered its fifth day, with Iranian missile attacks targeting U.S. military installations across the Middle East and in several Gulf states. Although a senior American military commander said the campaign against Tehran is progressing ahead of the “game plan,” concerns are mounting that the fighting could evolve into a prolonged regional conflict.

    Aside from the geopolitical tensions, investors were also watching developments in private credit markets following a sharp increase in withdrawals from Blackstone’s flagship private credit fund.

    Oil continues to rise

    A major concern for financial markets is the possibility that hostilities in the Middle East could cause lasting disruptions to tanker traffic through the Strait of Hormuz, a strategic shipping route responsible for moving a significant share of the world’s oil and gas supplies.

    Brent crude, which had been trading near $73 per barrel before the attacks on Iran began, has surged sharply. Brent futures were last up 2.6% at $83.48 per barrel, while U.S. West Texas Intermediate crude futures rose 2.5% to $76.41 per barrel.

    Earlier on Tuesday, oil prices briefly jumped as much as 8%, before retreating from those highs after President Donald Trump indicated that the United States could begin escorting commercial vessels through the Strait of Hormuz.

    Natural gas prices have also surged in both Europe and Asia. Iranian strikes on a Qatari gas facility disrupted exports from the major supplier, tightening supply conditions in several countries dependent on these shipments.

    Meanwhile, diesel prices have also increased, potentially pushing transportation costs higher — a key factor in inflation calculations.

    Rising energy prices have weighed particularly heavily on Asian stock markets. Economies in East Asia, including South Korea and Japan, depend heavily on oil and gas imports that pass through the Strait of Hormuz, leaving them especially vulnerable to disruptions along the narrow maritime corridor south of Iran. South Korea’s Kospi index fell so sharply on Wednesday that trading had to be temporarily halted.

    Gold rebounds

    Gold prices climbed on Wednesday in the latest swing of volatile trading for the precious metal.

    Spot gold rose 1.7% to $5,176.75 after dropping nearly 5% during the previous session. Gold futures also advanced by 1.3%.

    The U.S. dollar index traded largely unchanged after climbing nearly 1.5% over the past two days.

    While gold is typically viewed as a safe-haven asset during times of geopolitical stress or rising inflation, its appeal had recently been weakened by the stronger dollar. Investors also appeared cautious after the metal reached record highs in recent sessions.

    CrowdStrike reports results

    In corporate news, CrowdStrike (NASDAQ:CRWD) reported fourth-quarter earnings that exceeded Wall Street expectations and provided fiscal 2027 guidance broadly in line with forecasts, at a time when investors are assessing the impact of artificial intelligence on the software industry.

    Shares of the cybersecurity firm declined slightly in extended trading on Wednesday.

    The Austin, Texas-based company reported quarterly earnings of $1.12 per share, beating analyst estimates of $1.10. Revenue reached $1.31 billion, slightly ahead of the $1.30 billion consensus forecast.

    Company executives said that rising adoption of artificial intelligence across enterprises is generating increased demand for security solutions, positioning CrowdStrike to benefit as businesses look to safeguard AI-driven workloads and sensitive data.

    OpenAI exploring possible NATO contract — reports

    OpenAI is reportedly evaluating a potential contract with the North Atlantic Treaty Organization, according to several media reports published on Tuesday. The development comes after the ChatGPT developer recently announced an agreement with the U.S. Department of Defense.

    The Wall Street Journal initially reported comments from OpenAI CEO Sam Altman indicating that the company was considering a deal to deploy its technology across NATO’s classified networks. However, the newspaper later clarified that an OpenAI spokesperson said Altman had misspoken and that the potential deployment would involve unclassified networks.

    Reuters also reported that the artificial intelligence company is considering an agreement to implement its technology across NATO’s unclassified systems.

    Last week, OpenAI announced a separate agreement that will deploy its AI technology on the Pentagon’s classified network. The deal followed a breakdown in cooperation between U.S. authorities and Anthropic, after Washington labeled the developer of the Claude AI model a “supply-chain risk.” Anthropic had refused to allow its AI systems to be used for domestic mass surveillance or to power fully autonomous lethal weapons.

  • European Stocks Rise Slightly as Middle East Tensions Persist; Bayer Weighs on Sentiment: DAX, CAC, FTSE100

    European Stocks Rise Slightly as Middle East Tensions Persist; Bayer Weighs on Sentiment: DAX, CAC, FTSE100

    European equity markets traded modestly higher on Wednesday as investors continued to monitor developments in the Middle East while digesting a fresh wave of corporate earnings.

    At around 08:05 GMT, Germany’s DAX advanced 0.6%, France’s CAC 40 gained 0.5%, and the U.K.’s FTSE 100 edged up 0.1%.

    Conflict in the Middle East remains in focus

    Military activity involving the United States, Israel and Iran continued overnight. U.S. Admiral Brad Cooper, commander of American forces in the region, said Iran’s air defence capabilities had been significantly weakened and that its navy had lost operational control of key waterways after 17 vessels were destroyed. He also stated that more than 2,000 Iranian targets had been struck.

    At the same time, Israel continued strikes against the Iran-backed Hezbollah group in neighbouring Lebanon after militants launched attacks in retaliation for the death of Supreme Leader Ayatollah Ali Khamenei during the initial strikes on Saturday.

    Iran has also launched missiles and drones toward neighbouring Arab countries hosting U.S. military bases, widening the scope of the conflict across the region.

    “Energy prices have soared over the last couple of days, especially European gas, and this is preventing bonds/yields from acting as circuit breakers,” said analysts at Vital Knowledge. “If energy holds at present levels, it will create a major headwind for consumers globally.”

    “Looking beyond the immediate term, lurking in the background is the potential for the Iran campaign to yield a medium and long-term positive outcome for equities by finally ending a war” that began back in 2023.

    Corporate results in focus

    Alongside geopolitical developments, investors were also focused on corporate earnings from several major European companies.

    Bayer (TG:BAYN) disappointed the market after issuing a 2026 profit outlook below expectations, as the German pharmaceutical group continues to face expensive litigation and a heavy debt burden.

    German automotive supplier Continental (TG:CON) said it expects largely stable sales and profitability in its core tyre division in 2026, citing ongoing volatility in demand.

    Sportswear company Adidas (TG:ADS) forecast operating profit of around €2.3 billion this year, despite anticipating roughly €400 million in negative effects from U.S. tariffs and adverse currency movements.

    French reinsurer SCOR (EU:SCR) reported stronger-than-expected fourth-quarter net income, supported by solid underwriting results in both property and casualty as well as life and health operations.

    In the U.K., Metro Bank (LSE:MTRO) announced underlying pre-tax profit of £98 million for 2025, marking the highest level in the lender’s 15-year history and surpassing its cost-cutting targets.

    Meanwhile, Traton (BIT:18TRA) proposed a dividend for fiscal year 2025 at roughly half the level paid the previous year after the Volkswagen-owned truckmaker reported a steep decline in earnings tied to a sharp downturn in its North American business and the impact of U.S. tariffs.

    Eurozone data awaited

    On the macroeconomic front, investors are watching for the release of February services PMI data as well as the latest unemployment figures for the eurozone.

    However, the data may have limited impact on European Central Bank policy expectations, particularly after figures released Tuesday showed eurozone inflation unexpectedly accelerated last month.

    Inflation across the 21 countries using the euro rose to 1.9% from 1.7% the previous month, exceeding forecasts of 1.7%. Price pressures could intensify further if the Middle East conflict continues to drive energy prices higher.

    Financial markets currently expect the ECB to keep its deposit rate unchanged at 2% for the time being, though the possibility of a rate increase later in the year is beginning to emerge.

    Oil prices extend rally

    Oil prices continued to climb on Wednesday as escalating tensions in the Middle East raised fears of supply disruptions.

    Brent crude futures jumped 2.9% to $83.78 per barrel, while U.S. West Texas Intermediate crude gained 2.6% to $76.51 per barrel.

    Both benchmarks had already risen nearly 5% in the previous session after gaining about 7% on Monday. The Brent contract has now reached its highest level since July 2024.

    According to Reuters, Iraq—the second-largest producer within the Organization of the Petroleum Exporting Countries—has reduced production by roughly 1.5 million barrels per day due to storage constraints and limited export routes.

    Meanwhile, Iran has targeted tankers passing through the Strait of Hormuz, a critical route that handles about one-fifth of global oil and liquefied natural gas shipments, effectively halting traffic for a fourth consecutive day.

  • Metro Bank Reports Record Profit While Beating Cost Reduction Targets

    Metro Bank Reports Record Profit While Beating Cost Reduction Targets

    Metro Bank (LSE:MTRO) reported underlying profit before tax of £98 million for the year ended 31 December 2025, marking the highest annual profit in the bank’s 15-year history and surpassing its cost reduction targets.

    The lender recorded a 22% increase in net interest income to £460 million, which helped drive a 16% rise in underlying revenue to £585 million. Net interest margin for the year reached 2.98%, an increase of 107 basis points year-on-year, while the exit net interest margin stood at 3.17%, in line with management guidance.

    Operating efficiency also improved during the period. Underlying operating costs declined 7% year-on-year to £473 million, exceeding the bank’s previous cost reduction target of 4–5%.

    Total loans fell slightly by 2% to £8,823 million as the bank continued repositioning its lending portfolio toward higher-yielding segments. Corporate and commercial lending grew strongly, rising 34% to £3,570 million after the bank completed record gross new lending of £2 billion during the year.

    Specialist mortgage lending also expanded rapidly, increasing 137% to £1,657 million. Meanwhile, customer deposits declined 7% to £13,445 million as Metro Bank deliberately reduced excess liquidity. The cost of deposits improved significantly, falling to 1.06% from 1.95% in the previous year.

    The bank’s capital position strengthened, with its Common Equity Tier 1 ratio reaching 12.5%. Its total capital plus Minimum Requirement for Own Funds and Eligible Liabilities (MREL) ratio increased to 26.1%, compared with 23.0% previously. From 1 January 2026, Metro Bank was reclassified as a Transfer firm under the MREL regime, meaning its requirements will now align with minimum capital thresholds.

    “Through focused execution of our strategy and pivot to higher margin business, we have boosted underlying profits to £98 million, the highest in our 15-year history, whilst reducing operating costs ahead of target,” said Daniel Frumkin, Chief Executive Officer.

    Looking ahead, Metro Bank expects return on tangible equity to exceed 13% by the fourth quarter of 2026, rise above 15% in 2027 and surpass 18% by 2028. The bank forecasts exit net interest margins of between 3.40% and 4.00% for 2026 and between 3.75% and 4.50% for 2027, while operating costs are expected to remain broadly flat in 2026 compared with 2025.

  • Gresham House Energy Storage Fund Reports 2% Fourth-Quarter NAV Decline

    Gresham House Energy Storage Fund Reports 2% Fourth-Quarter NAV Decline

    Gresham House Energy Storage Fund PLC (LSE:GRID) reported a net asset value (NAV) of 113.3 pence per share as of 31 December 2025, representing a 2.0% decline during the fourth quarter.

    The reduction in NAV was primarily driven by revised revenue assumptions, which lowered the September valuation by around 5.3%. This impact was partly offset by positive operational developments that added approximately 2% to the valuation, alongside cash generation contributing a further 1%.

    During the quarter, the fund’s portfolio generated £15.4 million in revenue and £9.5 million in EBITDA, reflecting continued operational performance across its energy storage assets.

    Gresham House also noted progress on the final phase of its three-year strategic plan focused on developing alternative revenue streams. Initial trials began in December 2025, with further details expected to be disclosed when the fund publishes its full-year results.

    The portfolio’s weighted-average discount rate stood at 10.33% at the end of December 2025, slightly lower than 10.46% recorded at the end of the third quarter. Underlying asset discount rates remained unchanged.

    In terms of development activity, the fund signed acquisition agreements in December 2025 for three new projects—Cockenzie, Monet’s Garden and Elland 2—which are currently held at cost in the portfolio. Construction on these assets is expected to begin in the first half of 2026, subject to securing grid connection offers.

    The fund is also progressing negotiations for two additional projects, with agreements expected to be completed before construction begins in early 2027.

    Among the new developments, Cockenzie is a 240MW project with a confirmed grid connection date of June 2027. The remaining four projects currently hold protected status while awaiting grid connection offers expected between now and May 2026.