News of the reversal comes as Metro Bank refreshes its strategy after posting Q4 results that showed as disappointing P&L with a loss before tax of £130.8 million. This includes a £68 million write-down relating to the discontinuation of work-in-progress on IT projects that no longer figure in the bank’s revised strategy.

The bank's previous plans for expansion were upended by an accounting scandal and the subsequent departures of chairman Vernon Hill and chief executive Craig Donaldson.

As part of the new strategy, the bank has rowed back on plans to open 15 new branches in the North of England, compared to the 30 stores promised to the BRC Capability and Innovation Fund, which has been doling out cash to challenger brands prepared to promote competition in the market for banking services to SMEs.

Metro, Starling and ClearBank were awarded a combined £280m from the RBS bail out fund in February last year, beating off competition from better-known brands TSB, Co-operative Bank and CYBG.

Metro Bank was granted the largest slice of the pie at £120 million, followed by Starling at £100 million. ClearBank, which is collaborating with SME banking startup Tide, walked away with £60 million.

The return of the cash is also being matched by a decision to step away from niche SME propositions that benefit a smaller group of firms, including secured lending transformation, virtual accounts and pooling. Other cost-cutting measures include outsourcing of back office operations to cheaper locations and middle management job cuts.

Dan Frumkin, chief executive officer at Metro Bank, says: “Our financial performance reflects a very challenging year for Metro Bank. External headwinds, internal challenges and actions we took to put the business on a more positive trajectory are reflected in the results."