Metro Bank raises £925m through debt and funding | Business News

Metro Bank has agreed a financing deal, strengthening its troubled balance sheet, following Sky News reports it was seeking the funding.

Nearly £1bn (£925m) has been raised by Metro Bank, which has 2.7 million customer accounts, making it one of the 10 largest banks in Britain.

In a statement the lender said it raised £325m in new funding and refinanced £600m of debt. The largest shareholder,
Spaldy Investments, an investment firm owned by a Colombian billionaire, is contributing £102m.

Sky News reported last week the high street bank was drawing up plans to raise hundreds of millions of pounds. Its share price fell steeply, nearly 30%, following the news.

Metro Bank also confirmed Sky News reporting that it was in discussion to sell up to £3bn of residential mortgages.

A “gradual shift” towards providing specialist mortgages, often providing alternative solutions for people who have been denied a traditional mortgage, and commercial lending will be facilitated via the funding and refinancing, Metro Bank said in a statement.

Takeover bids from rival bank Shawbrook have been rejected by Metro Bank

A so-called challenger bank, Metro Bank became the first new lender to open on Britain’s high streets in more than 100 years when it launched in 2010, in the wake of the 2008 financial crisis.

Read more from Sky News:
Banks warned on branch closures as access to cash to be ‘protected in law’
Banks accused of closing accounts belonging to British Muslims

It offers current and business accounts, personal loans and insurance products and employs about 4,000 people, operating from about 75 branches across the country.

The latest news “marks a new chapter for Metro Bank, facilitating the delivery of continued profitable growth over the coming years”, said Daniel Frumkin, Metro Bank chief executive.

“Metro Bank made a statutory profit after tax in Q3 2023, and continues to demonstrate ongoing momentum as we strive towards our ambition to be the UK’s number one community bank.

“Our strong franchise is underpinned by our loyal customer base and engaged colleagues and we will continue to develop the Metro Bank offer to provide the digital and physical banking services our customers expect.”

The Bank of England said it “welcomes the steps taken by Metro Bank to strengthen its capital position”.