Metro Bank Collaborating with PRA to Strengthen Balance Sheet or Seek Buyer

Metro Bank, a prominent UK lender, is working closely with the Prudential Regulation Authority (PRA) to devise a plan aimed at bolstering its balance sheet or finding a potential buyer. The PRA has invited major UK lenders, including HSBC and Lloyds, to consider making an offer for Metro Bank. Additionally, Shawbrook is reportedly considering a fresh bid for the bank, following several unsuccessful attempts earlier this year.

According to sources familiar with the matter, JPMorgan had evaluated a bid for Metro Bank but decided against pursuing it. Similarly, Santander is said to have engaged advisory firm Robey Warshaw to explore a potential offer. However, none of the parties involved have commented on these reports.

Metro Bank’s shares have experienced a decline after news broke that the bank had enlisted advisors to strengthen its balance sheet, having failed to secure crucial capital relief from banking regulators. The bank has been exploring various options, including raising up to £600 million ($734.28 million) through equity and debt injections, as well as asset sales.

In response to these challenges, Metro Bank stated that it has met its minimum capital requirements and has not yet made a decision regarding its fundraising plans. It emphasized that customer deposits, like those of other UK banks, are backed by a government guarantee of up to £85,000, and the regulator is keen to prevent concerns from spreading.

The PRA, HSBC, Shawbrook, and JPMorgan declined to comment, while Metro Bank, Lloyds, and Santander have not yet responded to requests for comment.

As the situation unfolds, Metro Bank remains committed to finding a viable solution to strengthen its financial position and ensure the stability of its operations. The collaboration with the PRA and the interest shown by potential buyers demonstrate the bank’s determination to navigate these challenges successfully.