Metro Bank Seeks Capital Raise and Considers Asset Sale Amid Plunging Market Capitalization

Metro Bank, under the guidance of Robert Sharpe, is seeking to raise significant capital to bolster its balance sheet, collaborating with Morgan Stanley, Moelis (NYSE:), and the Royal Bank of Canada. The bank is considering various strategies to strengthen its financial position, including selling assets or potentially the entire company, amidst a reduced market capitalization of less than £100m.

The bank’s efforts to raise capital come as it grapples with a host of challenges. These include refinancing £350m of MREL debt, attempting to raise an additional £200m in MREL capital, and dealing with past fines by the Financial Conduct Authority (FCA), which included a £10m penalty.

Despite rebounding from restructuring and write-off costs with a £15.4m pre-tax profit in H1 2023, Metro Bank’s share price has dropped over 60% this year. This significant decrease has reduced its market capitalization from a 2018 peak of £3.5bn to less than £100m.

Founded in 2010 as the first new lender in over a century, Metro Bank now manages 2.7 million customer accounts. The bank’s history includes key figures such as founders Anthony Thompson and Vernon Hill, the latter having exited controversially, and regulatory bodies like the Prudential Regulation Authority (PRA).

Further details of Metro Bank’s past include a £350m share placing in 2019 and a previous deal with NatWest Group. All these elements combine to form the current picture of Metro Bank as it navigates through its financial challenges.

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