Metro Bank has managed to stem the tide of customer deposit outflows that escalated in the wake of its recent emergency fundraise, triggered by financial instability concerns. The bank succeeded in securing a substantial refinancing package, which led to the normalization of daily deposit flows and reassured investors.
The refinancing deal, reached in October, consisted of a £325 million capital raise and £600 million in debt refinancing. In an additional move to strengthen the bank's financial position, investors injected an extra £150 million in exchange for a majority of its shares. Furthermore, as part of this capital raise, Metro Bank's bondholders agreed to lend £175 million.
In a significant turn of events, Colombian billionaire Jaime Gilinski Bacal, who previously held roughly 9% stake in the bank through Spaldy Investments, acquired a controlling 53% stake. Bacal made this move by purchasing additional shares worth £102 million as part of the funding deal.
Despite these measures, Metro Bank reported challenging trading conditions. The bank saw a 2% YoY drop in loans to £12.5 billion and a 5% decline in deposits to £15.6 billion before the outflows that occurred prior to the fundraise. However, following the fundraise, deposits saw a slight uptick of 1%, while loans remained stable compared to H1.
Metro Bank's shares have hit record lows amid balance sheet worries and years of trading difficulties. In 2019, it was forced to raise £350 million from shareholders after discovering a bookkeeping error. More recently, the bank faced regulatory rejection when it sought to lower the capital requirements attached to its mortgage business.
Founded in 2010 as an alternative to traditional banks, Metro Bank operates 76 branches and caters to approximately 2.7 million customers.
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