Traders wiped off more than £300 million from the value of Metro Bank after it warned of a squeeze from fierce competition in the mortgage market.
Profits at the lender surged to £10 million in the three months to September 30 – more than double a year earlier – and revenues climbed 34 per cent to £105 million.
But chief executive Craig Donaldson warned that a price war on mortgages is making it harder for Metro to earn money.
Traders wiped off more than £300 million from the value of Metro Bank after it warned of a squeeze from fierce competition in the mortgage market
The Bank of England hiked interest rates in August but Donaldson said that, in a highly unusual move, rates on fixed-rate mortgages actually fell the following month.
Normally, if rates rise they would be expected to follow, boosting lenders’ profits. Though this may be good news for borrowers, it pushed Metro’s shares down by 12.3 per cent, or 316p, to 2258p.
Russ Mould, investment director at AJ Bell, said: ‘Margins are being squeezed as it fights for business, which explains why its share price got a hammering.’
Its net interest margin, which measures the difference between how much interest it earns from lending compared to how much it pays out, fell to 1.77 per cent in the third quarter of the year from 1.85 per cent in the previous three months.
Aston Martin, the James Bond car maker which hit the public markets earlier this month, continued to stall, sliding 2.6 per cent, or 37p, to 1375p. Originally worth 1900p when it floated, the shares have now lost 27.6 per cent of their value
Aston Martin, the James Bond car maker which hit the public markets earlier this month, continued to stall, sliding 2.6 per cent, or 37p, to 1375p. Originally worth 1900p when it floated, the shares have now lost 27.6 per cent of their value.
Aston Martin is worth £1.2 billion less than when it debuted, which has left critics saying the host of bankers who worked on its float pushed up its value to rake in more fees.
Travel agent Thomas Cook provided some good news for the FTSE 250 as its shares climbed 8.5 per cent, or 3.42p, to 43.52p amid a broader industry uptick as traders took a punt ahead of its full-year results in November.
STOCK WATCH: Yu Group
Energy firm Yu Group, which supplies electricity and gas to UK businesses, has plummeted after warning its profits have gone up in smoke.
The business said a review into accounting practice had revealed some problems, and that profits would be hit by £10 million. It made £8 million last year, and will now swing to a loss.
The issues related to how Yu Group accounted for services it had provided to customers but hadn’t yet been paid for.
Shares plummeted by 80.3 per cent, or 477.5p, to 117.5p.
Its shares have plummeted by 67.8 per cent so far this year, meaning a relatively small rise in its price has a significant effect.
Deutsche Bank analysts gave the European airline sector a hand as they said the recent sell-off of airline stocks looked overdone.
Rising oil prices and lacklustre results from companies such as Ryanair had caused investors to take flight. The hesitant vote of confidence caused EasyJet to rise 0.8 per cent, or 8.5p, to 1141p, Wizz Air was up 2.6 per cent, or 61p, to 2430p, and British Airways owner IAG climbed 0.8 per cent, or 4.4p, to 565.8p.
The FTSE 100 recovered slightly from Tuesday’s tremors, ending the day 0.1 per cent higher, or 7.77 points, at 6962.98.
BT climbed 4.1 per cent, or 9.75p, to 250.2p as investors backed the telecoms giant to up its game against competitors such as City Fibre. The younger rival, backed by Goldman Sachs and private equity firm Antin, is to spend £2.5 billion on rolling out fibre networks for faster broadband.
Precious metals miner Fresnillo slipped, as it released disappointing third-quarter production results and cut its outlook for silver production. The Mexico-focused firm blamed low-quality ore grades at two mines, though it did say gold production should be stronger than previously thought. Shares fell 4 per cent, or 39.2p, to 938p.
Packaging company DS Smith dealt a blow to hedge fund billionaire Crispin Odey, whose firm took a £28.5 million short position last week.
Short sellers, most often hedge funds, bet the price of a particular stock will fall. Though DS Smith has been on the decline, it showed a glimmer of hope as its shares rose 1 per cent, or 3.8p, to 367.7p. Odey is still in the money, though, as its shares are 17.4p lower than last Friday when he took his stake.