Metro Bank shares plunge on fund raising reports

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Metro Bank’s shares fell by up to a third after reports suggested it needed to raise up to £600 million to strengthen its finances. The bank has reassured investors about its financial position and stated that it is considering ways to enhance its capital resources. Treasury officials have been in touch with the Prudential Regulation Authority, the financial services regulator, who is monitoring the situation at Metro Bank.

Metro Bank has stressed that its finances remain strong and that it continues to meet all regulatory requirements. The Financial Services Compensation Scheme guarantees customer deposits up to £85,000, which ensures that depositors will receive their money back if a bank runs into trouble. The bank was founded in the wake of the financial crisis and was the first to open in the UK in over 100 years.

Metro Bank is considering various options to boost its balance sheet before some £350 million worth of debt will need to be refinanced in October 2025. A share sale of around £100 million is on the table, and the bank has asked advisers at Morgan Stanley to work on a deal with the hopes of raising millions in an equity sale, borrowing up to £350 million, and looking at the potential sale of assets.

Ratings agency Fitch placed Metro Bank on negative watch on Wednesday, citing concerns over its capital strength, funding, and business model. The bank’s stock market value is now less than £100m, having been valued at around £3.5bn at its peak five years ago.

SOURCE : BBC(By Lora Jones)