- Metro Bank seeks lender proposals.
- Mortgage portfolio sale.
- Refinancing and financial challenges.
Metro Bank has asked ideas from competing high-street lenders by early November to improve its balance sheet.
Bank has set an aggressive schedule for competitors to acquire a significant portion of its mortgage portfolio.
Metro Bank has requested proposals to be submitted by the start of the following month. Barclays, Lloyds Banking Group, and NatWest Group have all expressed interest in the transaction.
Days after announcing that it had secured a £925 million refinancing package, which includes Colombian billionaire Jaime Gilinski Bacal becoming its dominant shareholder, news of the schedule has emerged.
Concerns for the survival of Metro Bank arose this month that the institution had engaged the services of City advisers in order to procure hundreds of millions of pounds in additional capital.
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It intends to raise approximately £150 million in new equity and £175 million in new debt in addition to refinancing £600 million in existing debt.
The potential fair value accounting implications of the mortgage book sale have been a subject of inquiry among analysts. However, Metro Bank’s CEO, Daniel Frumkin, indicated last week that the sale is expected to be completed prior to the conclusion of the year.
British high streets saw the first new lender in nearly a century when Metro Bank, with 2.7 million members, started in 2010.
It operates approximately 75 branches nationwide and provides current accounts, business accounts, personal loans, and insurance products. It has a workforce of approximately 4,000 individuals.
In December 2020, Metro Bank will liquidate assets and sell owner-occupied mortgages to NatWest Group for up to £3.1 billion.
