High street lender Metro Bank receives takeover approach

Yahoo

13 hours ago

The high street lender Metro Bank has been approached about a private equity-backed takeover in a move that could lead to the disappearance of another company from the London Stock Exchange.
Sky News has learnt that Metro Bank was approached in the last fortnight about an offer to take it private spearheaded by the financial services-focused buyout firm Pollen Street Capital.
Pollen Street is one of the major shareholders in Shawbrook, the mid-sized bank which in the past has approached Metro Bank about a merger of the two companies.
In recent months, Shawbrook's owners have stepped up efforts to identify a prospective corporate combination, holding tentative talks with Starling Bank about a £5bn tie-up, while also drawing up plans for a stock market listing.
The takeover approach to Metro Bank comes as it puts a traumatic period in which it came close to insolvency firmly behind it.
In November 2023, the lender was rescued through a £925m deal comprising £325m of equity - a third of which was contributed by Jaime Gilinski Bacal, a Colombian billionaire - and £600m of new debt.
Mr Gilinski now holds a near-53% stake through his investment vehicle, Spaldy Investments, and sits on the company's board.
Since the bailout deal, Metro Bank has cut hundreds of jobs and sold portfolios of loan assets, at the same time as chief executive Daniel Frumkin has improved its operating performance.
Shares in Metro Bank have more than trebled in the last year as its recovery has gathered pace.
On Friday, the stock closed at 112.2p, giving it a market capitalisation of just over £750m.
At one point in 2018, the lender - which promised to revolutionise retail banking when it opened its first branch in London in 2010 - had a market capitalisation of £3.5bn.
Metro Bank became the first new lender to open on Britain's high streets in over 100 years when it launched in the wake of the 2008 financial crisis.
Its branch-based model, which included gimmicks such as offering dog biscuits, proved costly, however, at a time when many rivals have been shifting to digital banking.
Reporting first-quarter results last month, Mr Frumkin said: "During the first quarter of 2025, we have continued to deliver the strategic repositioning of Metro Bank's business, maintaining strong cost control while driving higher net interest margin by changing the mix of assets and remaining disciplined about deposits."
"We have seen further growth in our corporate and commercial lending, with Metro Bank's relationship banking and breadth of services creating differentiation for us in the market."
Metro Bank operates from about 75 branches across the country, and saw roughly 30,000 new personal and business current accounts opened during the last quarter.
In 2019, customers formed sizeable queues at some of its branches after suggestions circulated on social media that it was in financial distress.
Days later, it unveiled a £350m share placing in a move designed to allay such concerns.
The company has had a chequered history with City regulators, despite its relatively brief existence.
In 2022, it was fined £10m by the Financial Conduct Authority for publishing incorrect information to investors, while the PRA slapped it with a £5.4m penalty for similar infringements a year earlier.
The lender was founded in 2009 by Anthony Thompson, a financial services entrepreneur, and Vernon Hill, an American who eventually left in controversial circumstances in 2019.
Last month, it sailed through a shareholder vote unscathed after drawing opposition to a proposal which could see top executives paid up to £60m apiece.
Metro Bank and Pollen Street both declined to comment on Saturday