On Sunday, the Financial Times reported that the Bank of England’s Prudential Regulation Authority held talks with a number of UK-based lenders, testing the waters for interest in a possible Metro Bank (MTRO.L) takeover. This follows the institution’s rejection of several Shawbrook proposals.
Metro Bank grappling for funds ahead of the opening bell on Monday
Reuters indicated both JPMorgan (JPM.N) and HSBC (HSBA.L) considered the bids for the bank but decided against a takeover as it required too much additional capital. On Saturday, certain Metro Bank bondholders met the company’s executives to discuss funding of £500m and agree on a takeover deal before the market opens on Monday.
Metro Bank has suffered numerous setbacks in recent years. Accounting errors, losing top executives, and delayed regulatory green lights for key capital reliefs were some of the hobbling factors that caused the company’s current position.
Financial experts predict that should restitutive steps such as bondholder-led financing or capital funding fail, Metro Bank will have no other choice but a takeover. On Thursday, the finance institution said its current options include combined equity and debt issuance, refinancing, and asset sales.
Don’t miss out the latest news, subscribe to LeapRate’s newsletter
The bank initiated these discussions after a dismal week of trading. On Thursday, shares tumbled to a record low when word of the fundraising hit the wires. Losses pared the next day, and shares closed trading at 21% up at £45.25. Reuters indicated that MTRO.L plummeted by more than 55% in the last four weeks.
When it opened its high-street doors in 2010, Metro Bank was the first new lender to surface on the British scene in a century. It has approximately 2.7 million customer accounts.
