- Metro Bank secures £1 billion.
- Refinancing and new funding.
- CEO anticipates profitable growth.
Metro Bank’s latest move, according to the CEO, “opens a new chapter… facilitates the delivery of continued profitable growth in the coming years.”
Metro Bank has reached a funding agreement to improve its weak balance sheet.
One of the ten major banks in Britain, Metro, has successfully raised approximately £1 billion (£925 million). The bank boasts 2.7 million customer accounts.
The lender revealed that it had refinanced £600 million in debt and raised £325 million in new funding. The largest contribution, £102 million, came from Spaldy Investments, an investment firm owned by a Colombian oligarch.
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The high street bank’s share price fell 30% last week as it planned to generate hundreds of millions of pounds.
Additionally, Bank confirmed reports suggesting it was considering the sale of residential mortgages worth up to £3 billion.
The funding and refinancing will facilitate commercial lending and a “gradual shift” towards offering specialized mortgages. These mortgages often provide alternative solutions for borrowers who have been denied conventional mortgages, as stated in Metro Bank’s official statement.
Metro Bank had declined takeover offers from competitor bank Shawbrook.
Founded in 2010, Metro Bank was the first new lender to grace Britain’s high streets in over a century. Established in the aftermath of the 2008 financial crisis, it emerged as a challenger bank.
Apart from offering insurance products, personal loans, and current and business accounts, the bank operates from approximately 75 branches nationwide and employs around 4,000 individuals.
The recent development, according to Metro Bank’s CEO, Daniel Frumkin, “marks a new chapter for Metro Bank, facilitating the delivery of continued profitable growth in the coming years.”
Frumkin added, “Metro Bank generated a statutory profit after taxes in the third quarter of 2023, and our progress towards our goal of becoming the leading community bank in the United Kingdom continues to exhibit sustained momentum.
“Our strong franchise is underpinned by our loyal customer base and engaged colleagues, and we will continue to develop the Metro Bank offer to provide the digital and physical banking services our customers expect.”
The Bank of England has expressed approval of Metro Bank’s measures to fortify its capital position.
