High street lender Metro Bank's shares plunge on £600m capital raise reports
The bank’s shares tumbled by as much as a third soon after market opening on Thursday, before settling around 23 per cent lower, on reports that the firm is in talks with investors to raise around £250m in equity funding and £350 million in debt. A possible £100m share sale is also said to be among plans being mooted.
Metro Bank said it was looking at a range of options, including a combination of equity raise and debt, as well as possible asset sales. But it stressed “no decision has been made on whether to proceed with any of these options”.
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Hide AdMetro Bank said: “The company continues to consider how best to enhance its capital resources.”
Its shares have suffered hefty falls after regulators last month refused to approve a request from the bank to lower the capital requirements attached to its mortgage business.
It is one of the UK’s top 10 banks, with around 2.7mcustomers and 76 branches across the UK, having launched its first branches in 2010 as a challenger to the established players.
Shares in the bank have lost nearly two thirds of their value over the past six months, with its stock market value much reduced in recent years.
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Hide AdIt now has a market capitalisation of less than £100m, having been valued at around £3.5 billion at its peak five years ago.
The bank needs to refinance around £350m of debt in a year’s time.
Ratings agency Fitch placed Metro Bank on negative watch on Wednesday, citing concerns over its capital strength and funding, as well as its business model.