Metro Bank Seeks to Raise £600M After Notable Share Price Decline

Metro Bank, ranked among the top 10 lenders in the UK, is aiming to raise £600 million ($821 million) as it navigates a financial crisis that has caused its share price to plummet by nearly 50%. The bank’s current market capitalization stands at under £100 million, a significant decline from its peak valuation of £3.5 billion six months ago.

Initially, Metro Bank’s shares fell by a third before recovering slightly to a 23% decrease. The bank faces an urgent need to refinance £350 million in debt. To strengthen its financial position, Metro Bank is in discussions to secure £250 million in equity and £350 million in debt, receiving strategic guidance from financial advisors.

This financial upheaval follows the rejection of the bank’s request to reduce capital requirements for its mortgage operations by regulators. Despite these difficulties, Metro Bank asserts that it is actively optimizing capital resources related to its deposit and asset origination platform.

The bank currently serves 2.7 million customers, yet it has not established a definitive strategy, as it remains under negative scrutiny from Fitch Ratings. The situation has been worsened by regulatory reluctance to relax capital demands for the mortgage sector.