Metro Bank shares recover from losses after decline
Metro Bank shares recovered yesterday after a sharp sell-off, as details emerged of a possible cash injection from investors.
Shares in the troubled lender rose 20.7 per cent, or 7.75 pence, to 45.25 pence, after a 25.7 per cent fall the previous day, when reports suggested it was seeking hundreds of millions of pounds to shore up their finances.
Yesterday, following a report in the Financial Times, it emerged that a group of the lender’s bondholders had offered to inject £600 million, but that the bank has not yet accepted the offer.
Separately, Metro Bank has reportedly begun the sale of a £3bn portion of its mortgage portfolio.
But despite yesterday’s bounce, shares closed down more than 20 percent for the week.
Fighting back: Shares in the troubled lender rose 20.7 per cent, or 7.75 pence, to 45.25 pence, after a 25.7 per cent fall the previous day.
The Treasury was reported to be monitoring the situation and in contact with the Bank of England.
Metro Bank has struggled in recent years, including when it revealed a major accounting error in 2019.
Last night analysts were skeptical about its prospects.
Shore Capital’s Gary Greenwood said his valuation still means “the market is still telling us this is a failed color.” He said Metro was “stuck between a rock and a hard place.”
An external capital raise would be “prohibitively expensive at present”, while an asset sale “simply delays the way and does not address the fundamental issue that the bank has excessive costs and lacks scale”, he added.