Metro Bank shares are recouping their losses after the crash
Metro Bank shares struggled after a sharp sell-off yesterday as details emerged of a possible investor cash injection.
Shares in the troubled lender rose 20.7 percent, or 7.75 pence, to 45.25 pence, after falling 25.7 percent the previous day as reports said the company was seeking hundreds of millions of pounds to shore up its finances.
Yesterday, according to a report in the Financial Times, it was revealed that a group of the lender’s bondholders had offered a £600m capital injection – but the bank had not yet accepted the offer.
Separately, it has been reported that Metro Bank has now started selling a £3bn portion of its mortgage book.
But despite yesterday’s recovery, shares closed the week down by more than 20 percent.
Fighting back: Shares in the troubled lender rose 20.7 percent, or 7.75 pence, to 45.25 pence, after falling 25.7 percent the previous day
The Treasury was reportedly monitoring the situation and was in contact with the Bank of England.
Metro Bank has struggled in recent years, including disclosing a serious accounting error in 2019.
Analysts remained skeptical about the prospects last night.
Shore Capital’s Gary Greenwood said the valuation still means “the market is still telling us it’s a busted flush.” He said Metro “is in a bind.”
Raising capital externally would be “prohibitively expensive at the moment”, while selling assets “just throws the matter on the back burner and does not address the fundamental problem that the bank is overpriced and lacks scale”, he added.