Shares plummet as bank scrambles to raise £600million
Metro Bank saw their shares crash by 28.5% yesterday after reports emerged that the bank was in desperate need of cash. The lender is said to be trying to find £600million to refinance debts and fund future growth plans.
Market value plummets to just £63.60million
The sharp drop in shares means that Metro Bank is currently valued at just £63.60million. To put it into perspective, Lloyds Banking Group, with 30 million customers, is valued at a staggering £26.7billion.
Bank insists it is well-positioned for growth
Metro Bank released a statement reassuring investors that it is "well-positioned for future growth" and has generated profits in the past nine months. It is seeking fresh funds to support its expansion plans, but stressed that there is no immediate need for emergency fundraising.
Sale of mortgage book being considered
The bank's advisers are exploring the possibility of selling its £3billion mortgage book as a way to raise cash. If the sale goes through, customers with Metro Bank home loans could be transferred to another lender.
Government-backed protection for customers
While concerns about the bank's financial health loom, customers have been reassured that their savings up to £85,000 are protected by government-backed financial facilities.
Potential impact on services
If Metro Bank fails to secure the necessary funds, it may be forced to scale back its range of products, such as mortgages and loans. The bank's ability to lend could be severely restricted.
Meeting with regulatory authorities
The chairman of Metro Bank recently had a meeting with the Financial Conduct Authority and the Bank of England's regulatory arm. The bank clarified that it was a "long-standing" scheduled appointment rather than an emergency one.
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