Metro Bank has successfully secured £925 million ($1.13 billion) in new financing after a series of urgent talks that were held over the weekend. Concerns regarding the bank’s balance sheet triggered these discussions.
Through a capital raise, Metro Bank has managed to secure £325 million. An additional £600 million has been obtained through debt refinancing.
As part of the new deal, Colombian billionaire Jaime Gilinski Bacal, who is the bank’s biggest shareholder, will take control of the company by injecting an extra £102 million. This move will allow him to have a 53% controlling stake in the bank through his firm, Spaldy Investments, which is based in the British Virgin Islands.
News of this new investment has caused shares in Metro Bank (MTRO, +12.71%) to jump more than 17%. This positive development comes after the bank’s shares lost 47% of their value in the past month.
Metro Bank made history in 2010 by becoming the first new high street bank to launch in the UK in over 100 years. Since then, the bank has undergone nearly a decade of rapid expansion.
With its emphasis on customer service, Metro Bank now boasts 76 stores across the UK, controls assets worth £22.1 billion, and serves a customer base of 2.7 million, according to its latest annual report.
Metro Bank’s Struggles Continue
Unfortunately, the troubles for Metro Bank did not end there. Last month, the bank’s share price began to slide once again after it announced that regulators were unlikely to approve plans that would allow it to generate higher returns from its mortgage business. This setback only increased concerns about the bank’s future.
In a further twist, the Financial Times reported that the Bank of England had reached out to potential lenders to gauge interest in a possible sale of Metro Bank. These actions by the central bank suggested a deepening level of concern regarding the bank’s stability.
To address these challenges, Metro Bank CEO Daniel Frumkin expressed his optimism about the future, stating that the new funding represents a “new chapter” for the bank. Frumkin believes that this funding will enable Metro Bank to achieve continued profitable growth in the years ahead.
Despite the turbulent times it has faced, Metro Bank remains committed to overcoming its obstacles and emerging stronger than ever.