Metro Bank shares crash amid fears over its health after reports it was scrabbling to raise cash
METRO Bank’s shares crashed yesterday amid fears over its health after reports it was scrabbling to raise cash.
The lender is reportedly trying to find £600million to refinance debts and fund its growth plans.
But spooked investors sent shares tumbling by 28.5 per cent to 36.10p.
It means the challenger bank, which has 2.8 million customers and 75 branches in the UK, is valued at just £63.60million.
By comparison Lloyds Banking Group, which has 30 million customers, is worth £26.7billion.
Metro Bank confirmed it was considering options about “how best to enhance its capital resources”.
In a statement to the stock exchange, the company said it was “well-positioned for future growth”.
It added that it had generated profits over the past nine months and was seeking fresh funds to help with its plans for expansion.
A spokesman said there was no emergency fundraising needed and stressed that its repayment date for £350million of bonds was still two years away.
Customers have been urged to not do anything.
Savings up to £85,000 are guaranteed and protected by government-backed financial facilities.
However, without the extra funding Metro could be forced to trim back its range of products, such as mortgages and loans, as its ability to lend could be restricted.
The bank’s advisers are now sounding out potential buyers of its £3billion mortgage book as a cash-raising avenue.
A sale would mean customers who had taken a Metro Bank home loan could be transferred to another lender.
The chairman of Metro Bank yesterday had a meeting with the City watchdog, the Financial Conduct Authority and the Bank of England’s regulatory arm.
The bank, which opened in 2010 with a model of having high street branches, said it was a “long- standing” scheduled appointment rather than an emergency one.