Title: Metro Bank in Talks with Prudential Regulation Authority to Stabilize Balance Sheet or Find a Buyer
Date: October 8, 2022
London-based Metro Bank (MTRO.L) is currently in discussions with the Prudential Regulation Authority (PRA) to develop a plan aimed at bolstering its balance sheet or seeking a potential buyer, according to a reliable source familiar with the matter. The PRA has set a deadline for the presentation of this plan on Monday morning.
The PRA has recently reached out to major UK lenders, including HSBC (HSBA.L) and Lloyds (LLOY.L), to gauge their interest in making an offer for Metro Bank, said the source.
Additionally, sources have revealed that Shawbrook is considering making a new bid for Metro Bank. This comes after several unsuccessful attempts earlier this year.
While JPMorgan (JPM.N) reportedly studied a potential bid for Metro Bank before deciding against it, Santander (SAN.MC) has engaged advisory firm Robey Warshaw to explore a potential offer, as reported by the Financial Times and Sky News, respectively.
As of now, none of the involved parties—Metro Bank, PRA, HSBC, Shawbrook, JPMorgan, Lloyds, and Santander—have commented on the matter or confirmed their participation.
The news of Metro Bank seeking to strengthen its balance sheet has caused its shares to decline in value. The bank had hired advisers to address capital relief concerns from banking regulators.
Metro Bank has been considering several options to raise up to £600 million ($734.28 million) through equity and debt injections, as well as asset sales.
On Thursday, Metro Bank stated that it is exploring a combination of equity and debt issuance, refinancing, and asset sales as possible funding sources. The bank emphasized that it has met its minimum capital requirements and has not yet made a decision on its fundraising plans.
While customer deposits at Metro Bank and other UK banks are guaranteed by the government up to £85,000, the regulator is keen to prevent any spillover concerns.
The situation is ongoing, and further updates are expected in the coming days.
Contact Information:
Reporter: Elisa Martinuzzi, Pablo Mayo Cerquerio, Iain Withers, and Amy-Jo Crowley
Editing: Bernadette Baum and Ros Russell
About the Author:
Pablo is a member of Reuters’ Deals team and covers equity and debt capital markets transactions across Europe, the Middle East, and Africa, including initial public offerings and buyout financings. He has previously worked at Mergermarket, Euromoney, and Spanish digital media.
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