Lets see how Metro Bank plays out
(part of the super-well-regulated-UK-banking sector of course...)
https://www.standard.co....rnon-hill-b1111506.html
More trouble at Metro Bank
METRO Bank shares crashed 25% this morning as the City digested the latest blow to the lender – a plan to raise £600 million to show up its shaky finances.
The company had promised to change the face of banking when it launched in the UK in 2010, with new branches and a consumer friendly face.
It worked at first, until an accounting error saw it miscategorise loans that saw CEO Craig Donaldson ousted.
Metro has asked Morgan Stanley to work on a capital raising deal for £250 million in fresh equity and £350 million in debt.
The bank said: “As previously stated, Metro Bank continues to consider how best to optimise its capital resources to allow it to take advantage of the deposit and asset origination platform that has been built.”
The stock was down 12p to 38p which leaves the bank valued at just £66 million. The shares have lost 98% of their value in the last five years.
Fitch, the ratings agency, put Metro on negative credit watch yesterday. It said: “We expect the group’s earnings prospects to come under pressure in the short term due to rising funding costs, resulting from higher competition for deposits and given likely more expensive access to wholesale funding. In addition, capitalisation is tight.”
Back in 2019 Metro revealed that its loan portfolio was less stable than it had previously claimed. It was fined by the regulators then and has struggled to regain its standing in the City ever since.
Vernon Hill, the colourful founder, stepped down as chairman in October of 2019.
The bank won plaudits for modern, dog-friendly branches and claims of better customer service.