How to buy Metro Bank Shares (MTRO)

By:

James Knight

James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.

Updated: Jul 6, 2023

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This guide tells you everything you need to know about Metro’s eventful recent history. Discover what to look for in a recovery and the best places to find its shares.

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You can use one of the brokers below to get started on the market straight away. These are some of the best options that have been assessed and approved by our team of financial experts. If you want to learn more about Metro first, scroll down to keep reading.

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How to buy Metro Bank stock, a step-by-step guide

It’s relatively simple to buy shares in Metro bank, so don’t worry even if you’re new to stock investing. These are the steps to follow in order to complete your investment:

1. Choose a broker. You need to find an online brokerage platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
2. Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
3. Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Metro Bank shares.
4. Place an order for MTRO stock. Search for Metro Bank’s ticker symbol (MTRO) and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you wish to own and place your order.
5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Metro Bank shares will be listed in your account. Congratulations, you’ve just bought shares in Metro Bank!

What is Metro Bank? And should I invest?

Metro is a financial institution that became the UK’s first new high street bank in 150 years when it was formed in 2010. After being very successful in its early years, Metro ran into big trouble in 2018 and has been trying to recover ever since. 

That year, Metro revealed an ‘accounting error’ that meant it significantly underestimated the risk of its loans. The announcement set off a chain reaction which ultimately led to the downfall of the chairman and CEO, an investigation by the Financial Conduct Authority, and a 90% collapse in the share price.

Investing now means buying into the early stages of a turnaround plan. Metro is a relatively small bank that has been forced to radically change its service, away from what made it successful at first. Its shares are cheap as a result, but the discount comes with higher risk than most banking stocks.

How has the company performed in recent years?

The results of its first two years as a traded company between 2016 and 2018 were extremely good. Since then, things have been extremely bad. After hitting its all time share price high of £40 in mid-2018 it slid downhill fast, until it was below £1 less than two years later.

The collapse came on the back of its accounting difficulties and was exacerbated by the same forces that have affected many UK banks: Brexit uncertainty, low interest rates that cut margins to the bone, and then the coronavirus pandemic.

Metro posted losses of more than £300m in 2020, double the previous year. Although the numbers have recovered since, it’s been a steep fall for a company that was more used to doubling its share price just a few years ago.

Is it a good time to buy Metro Bank shares now?

If you understand the risks and believe in Metro’s turnaround plan then the shares are trading very cheaply compared to its heyday. The new strategy is a long way from the splashy expenditure of its early years, however. Now it’s all about cost-cutting and slow, incremental growth.

The challenge is whether it now offers anything different to the competition. Its success was built on spending big to attract new customers, then bucking the trend by focusing on customer service, opening new branches and extending opening hours. Without a niche, Metro is just a much smaller version of banks like NatWest and Barclays.

As part of its new plan, Metro recently sold off some of its expensive debt obligations and bought RateSetter, a lender that opens up more profitable loan opportunities. If you do bet on a recovery, look out for more news like that. Our market analysis is a good place to start:

Buying, selling and trading Metro Bank shares for beginners

What to do before buying shares

You should always take the time to research a stock fully before investing your money, especially if you haven’t owned shares before. The more knowledge you have, the better your chances of making a wise investment. 

With that in mind, here’s a checklist to run through first.

1. Research the company. You should always examine the fundamentals of a company. What is Metro Bank? How did the company get its start? How did it grow? Is Metro Bank’s revenue and profit growth picking up? Is the company innovating? The more you know about Metro Bank, the better positioned you’ll be to make smart investment decisions.
2. Make sure you understand the basics of stock investing. Make sure you have an understanding of how the stock market works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
3. Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
4. Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
5. Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our platform reviews can help you find the right broker for you.
6. Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bullish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news section can help you keep on top of movements in the financial markets.

What is the difference between buying, selling, and trading shares?

If you’re new to stock investing, then it’s important to understand the basics of what you can do with Metro Bank shares. Here’s a quick run-through of what’s involved in each.

Buying Metro Bank

This process involves finding a broker and placing an order for Metro Bank stock, as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.

Selling Metro Bank

When you sell any Metro Bank shares, you’ll want to do so at a higher price than the one at which you bought to earn a profit. 

When you sell is up to you. You might decide to hold for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that Metro Bank’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.

Trading Metro Bank

Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.

You can trade Metro Bank shares through making lots of moves, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.

Share dealing vs CFD trading

When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing 

Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.

When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.

Pros

• Can build wealth over time to achieve financial goals
• Don’t need to be very reactive to short-term market movements
• Some stocks will give you an income through regular dividend payments

Cons

• Takes a long time to realise any profits
• Your capital is tied up in stocks and cannot be used for other investments

CFD Trading 

If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.

One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into MTRO shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.

When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.

Pros

• Can generate fast profits if you read the market right 
• Some platforms allow you to trade with leverage
• Prevents your capital being tied up so you can take advantage of investment opportunities

Cons

• Trading with leverage is risky and can lead to big losses
• Doesn’t necessarily generate growth over the long term

Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course to get you up to speed. 

How to choose a broker

With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:

• Range of stocks available. The most important thing is that you can actually find the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as cryptocurrency and commodities.
• Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
• Regulation. You should only use regulated brokers to place trades. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
• Payment methods available. You might want to fund your broker account with a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
• Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
• Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.