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Barclays talks to buy £3bn Metro Bank mortgage book

In the interim, Barclays is in exclusive talks to acquire a substantial portfolio of residential mortgages, while the smaller lender seeks authorization for a broader refinancing.

Metro Bank is discussing selling a £3 billion mortgage portfolio with Barclays as part of a more significant financial restructuring designed to prevent the failure of the smaller high-street lender.

Barclays and Metro Bank have initiated exclusive discussions regarding the sale of the residential mortgage portfolio, which would enhance Metro Bank’s capital position.

Shareholder Approval for Refinancing

The announcement that Metro Bank’s shareholders have overwhelmingly approved a £925 million refinancing plan is anticipated to come just hours after the news of the negotiations.

The recapitalization, which bondholders have already approved, was declared official last month after a weekend of fiery negotiations concerning a rescue agreement.

With the £925 million investment, Jaime Gilinski Bacal, an entrepreneur from Colombia, will acquire the majority stake in the company.

Additional Funding and Expansion Plans

The lender intends to procure an additional £175 million in debt and £150 million in equity, in addition to refinancing £600 million in existing borrowings.

When it debuted in 2010, Metro Bank, which serves approximately 2.7 million clients, was the first new lender to appear on Britain’s high streets in over a century.

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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.

The bank reported that deposit outflows had returned to normal following the recapitalization agreement one month ago.

According to Dan Frumkin, chief executive officer of Metro Bank, Barclays is among the likely suitors for the mortgage book. During a conference call with an analyst at the FTSE 100 bank, Frumkin stated, “We have genuine interest… across a range of names—one not too dissimilar from what’s on your pay stub.”

Likely, we can achieve it by the conclusion of the current year.

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