Shares in the troubled British lender Metro Bank have bounced back by a third on reports that it has been sounding out bigger rivals to buy a chunk of its assets
FILE – A potential customer walks into the first branch of the new British high street bank, the Metro Bank, in London, on July 29, 2010. Shares in the troubled British lender Metro Bank have bounced back by a third on reports that it has been sounding out bigger rivals to buy a chunk of its assets. Sky News reported Friday, Oct. 6, 2023, that advisers to the bank have contacted Lloyds Banking Group and NatWest Group among others. That helped the company’s share price rally by 30% to 48.5 pence on the London Stock Exchange. (AP Photo/Alastair Grant)
The Associated Press
LONDON — Shares in the troubled British lender Metro Bank bounced back by a third on Friday on reports that it has been sounding out bigger rivals to buy a chunk of its assets.
Sky News reported that advisers to the bank have contacted Lloyds Banking Group and NatWest Group among others. That helped the company’s share price rally by 30% to 48.5 pence on the London Stock Exchange, in the process recouping the previous day’s losses when the bank acknowledged the need to raise new capital.
Metro Bank, which some analysts say may need to raise around 600 million pounds ($730 million) in capital to help it refinance debts, said it was looking at a range of options, including asset sales and the issuance of new shares. But it stressed that “no decision has been made on whether to proceed with any of these options.”
Analysts are cautious about its ability to raise the money.
Gary Greenwood, an equity research analyst for Shore Capital Markets, suggested that the business could struggle to find backers for a potential fundraising exercise.
“Metro Bank has been struggling for a number of years to establish itself as a profitable and self-sustaining bank,” he said. “Supporting a further capital raise for this struggling bank would be akin to throwing good money after bad, in our view, as it has already had enough time and opportunity to sort itself out and has been unable to do so.”
Metro Bank has 76 branches in Britain, which it terms as “stores.” It is one of the country’s top 10 banks with around 2.7 million customers.