Bank of England Approaches UK Lenders for Potential Takeover of Metro Bank

The Bank of England’s Prudential Regulation Authority has reportedly reached out to several major UK lenders to gauge their interest in acquiring Metro Bank, according to the Financial Times. JPMorgan and HSBC were among the institutions that considered bids for Metro Bank but ultimately decided against proceeding due to the additional capital requirements for a potential buyer. The Bank of England and HSBC declined to comment, while JPMorgan and Metro Bank have not yet responded to requests for comment.

Metro Bank, which has recently rejected takeover approaches from Shawbrook, held discussions with bondholders on Saturday regarding an equity injection and debt restructuring. The bidding process for Metro Bank is being managed by consultancy firm EY. The bank aims to secure new funds before the stock market opens on Monday.

In recent years, Metro Bank has faced various challenges, including accounting errors, leadership departures, and delayed regulatory approvals. To address its financial situation, the bank has been exploring different funding options, including equity and debt issuance, refinancing, and asset sales. Metro Bank has confirmed that it meets its minimum capital requirements and has not yet made a decision on its fundraising plans.

Over the past four weeks, Metro Bank’s shares have experienced significant decline, with a record low reached on Thursday. However, they rebounded on Friday, closing up 21% at 45.25 pence.

As the bidding process continues, Metro Bank aims to stabilize its finances and reassure regulators. The outcome of these discussions will have a significant impact on the bank’s future direction and operations.