Metro Bank drafts in investment bankers to explore capital raise
Metro Bank has reportedly drafted in a top team of investment bankers to explore ways to boost its capital position.
The lender has hired investment banks Morgan Stanley and Moelis to work on the capital-raising plan, which could raise as much as £100m, Sky News reported.
Royal Bank of Canada, Metro Bank’s corporate broker, has also been called in to support the efforts, the report said.
Other options are also being considered, however, including the sale of billions of pounds of mortgage assets, a debt-for-equity swap or even an outright sale of the company.
A spokesperson for Metro Bank told City PM: “As previously stated, Metro Bank continues to consider how best to optimise its capital resources to allow it to take advantage of the deposit and asset origination platform that has been built.”
In August, Metro Bank reported a pretax profit of £15.4m for the first half of 2023, swinging from a loss of £10.5m the year before when the bank faced significant restructuring and write-off costs.
Chief executive Dan Frumkin said at the time this “demonstrates that our strategy is working”.
But the bank’s share price has struggled in recent months, falling over 60 per cent since the start of the year, leaving it with a market capitalisation of less than £100m. It was previously valued at about £3.5bn at its peak in 2018.
Metro Bank was the first new lender to open on Britain’s high streets in over 100 years when it launched in 2010, and now has 2.7 million customer accounts.