Metro Bank shares plummet after it reveals talks to raise £600 million

Share prices are plummeting after Metro Bank confirms it's considering fundraising plans, ITV News' Business and Economics Editor Joel Hills reports

Metro Bank's shares have plummeted as it reveals its been in talks on raising a reported £600 million capital to shore up its finances.

The high street lender's shares tumbled down 25% since Wednesday, due to a fall in confidence in the firm, following the fundraising rumours.

Plans being mooted include investors raising around £250 million in equity funding and £350 million in debt, as well as a possible £100 million share sale.

Metro Bank said it was looking at a range of options, but it stressed “no decision has been made on whether to proceed with any of these options.

“The company continues to consider how best to enhance its capital resources.”

There is no indication customer deposits could be at risk.

Newspaper reports around the banks speculative plans are thought to have driven the falling shares on Thursday.

But they were already suffering hefty falls in September, after regulators refused to approve a request from the bank to lower the capital requirements attached to its mortgage business.

However the firm’s statement said the bank has been profitable on an underlying basis for the past nine months. 

The bank also hit back at the Financial Times after it reported the CEO and chair of Metro Bank had been “summoned to urgent talks” by both the Bank of England and the Financial Conduct Authority.

Claims that either men were summoned have been denied, but Metro Bank has said Chair, Robert Sharpe, attended a “long-standing, pre-diarised” meeting at the BofE on Thursday morning.

Having launched during the financial crisis, Metro Bank set out to be a challenger to the established players.

Now it is considered one of the UK's top 10 banks, with an estimated 2.7 million customers.

But ratings agency Fitch placed Metro Bank on negative watch on Wednesday, citing concerns over its capital strength and funding, as well as its business model.

At its peak five years ago it was valued at around £3.5 billion but now has a market capitalisation of less than £100 million.

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