Metro Bank, a leading UK lender serving 2.7 million customers, is grappling with a severe financial crisis as its shares nosedived over 25% on Thursday. The drastic drop in share price is attributed to the bank's ongoing deliberations over potential fundraising or asset sales aimed at bolstering its cash reserves.
The bank has reportedly set a target to raise approximately £600 million in capital for debt refinancing. This includes £250 million through equity funding and £350 million in debt. The funding strategy is intended to refinance an existing debt of £350 million due by October 2025. In addition, a possible share sale worth £100 million is under consideration.
Despite engaging regulators like the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) in discussions, the bank has yet to announce any final decisions regarding its fundraising strategy.
The bank's financial troubles have led to speculation among market analysts. Gary Greenwood from Shore Capital Markets has openly questioned Metro Bank's ability to secure the necessary funding amidst these challenging circumstances.
Alongside these developments, Metro Bank continues to explore expansion plans in North England, maintaining its network of 76 branches despite financial hardships. The bank's recent history includes a £5.4 million fine and a previous call for £350 million in fundraising.
As the bank navigates this tumultuous period, it remains unclear how these strategies will impact Metro Bank's future operations and its customer base. The bank's CEO, Daniel Frumkin, along with other key figures, are closely monitoring the situation as they seek solutions to stabilize the lender's financial position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.