The Bank Runs Continue: Metro Bank Reportedly Trying to Raise £600 Million
"Shares of Britain’s Metro Bank were briefly suspended from trading twice early Thursday, in a volatile session that saw the stock shed more than 29% from the Wednesday close," reported CNBC.
- The halts followed reports that the bank was trying to raise £600 million ($727 million) in debt and equity. The challenger bank, which launched in 2010, has a market cap of less than £100 million.
- Metro Bank has seen its share price tumble more than 50% this month after the Bank of England’s decision to disallow it to use its own internal models to assess the risks of its mortgages.
- Metro Bank said in a statement that it is currently considering “how best to enhance its capital resources,” with a particular focus on a £350 million bond due to mature in October 2025.
“It has been clear for some time that [Metro] is short of capital, with the bank operating below MREL requirements,” investment bank Keefe, Bruyette & Woods said in a research note.
- The key questions now facing the bank focus on its ability to raise that capital and whether that will be sufficient to remove capital concerns, the note said.
- According to Financial Times, Metro Bank’s chair and chief executive have been summoned to urgent talks with the UK’s top financial regulators today.
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