Metro Bank has reported record quarterly growth for lending and deposits as customer accounts increased by 16% in the first quarter to to 318,000.

At the start of the year, there was a total of 275,000 account holders for the UK challenger, but as the first quarter ended on 31 March, that number had grown by 16% to reach 318,000, which would translate to 89% year-on-year growth.

Total deposits grew by £301m (€366.5m, $508.6m), or 23% - up from £1,315m at the start of the year to to £1,616m.

Lending increased to £960m, up from £754m at the start of the year.

Craig Donaldson, CEO at Metro Bank, says: "We're extremely proud of our continued growth in lending, deposits and customer numbers as we approach our fourth anniversary. We are thankful as always to our personal and business banking customers, who continue to show their support as we revolutionise banking in communities across London and the South East."

Metro Bank was the first new UK high street bank in more than 100 years when it opened in 2010, and after a difficult start, it is now beginning to find its feet as it constantly gains slightly more of the market share.

However, the bank is yet to make a net profit and there was no change to that in this quarter as it made a loss of £10.6m after tax.

The bank now has 26 branches: Milton Keynes and Epsom which opened this year, with a further eight to be opened before the end of 2014.

The co-founder of Metro Bank, Anthony Thompson, has made more ripples in the banking world recently as he is set to open a web-only bank next year, along with former First Direct Chief Executive Mark Mullen.

Thompson said: "Bank branch usage has fallen off a cliff.

"Telephony as a means of accessing bank accounts is in decline. All of the explosive growth is in digital generally and mobile in particular."

According to figures from the Office for National Statistics, half of all adults and almost three quarters of people aged 25-34 bank predominantly online.