Metro Bank shares recoup losses after defeat
Metro Bank shares recoup losses after defeat
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Metro Bank shares hit back yesterday after a sharp sell-off as details emerged of a possible cash injection from investors.
Shares in the troubled lender rose 20.7%, or 7.75p, to 45.25p, after falling 25.7% the previous day when reports showed it was seeking hundreds of millions of pounds to shore up its finances.
Yesterday, following a report in the Financial Times, it emerged that a group of the lender’s bondholders had offered to inject £600m, but the bank has yet to accept the offer.
Separately, it was reported that Metro Bank had already begun selling off part of its £3bn mortgage portfolio.
But despite yesterday’s surge, shares closed down more than 20% on the week.
Strike back: Shares in the troubled lender rose 20.7%, or 7.75p, to 45.25p, after falling 25.7% the previous day
The Treasury is reportedly monitoring the situation and is in contact with the Bank of England.
Metro Bank has struggled in recent years, including when it disclosed a major accounting error in 2019.
Analysts last night remained skeptical about its prospects.
Gary Greenwood of Shore Capital said his rating still meant “the market is still telling us it’s a failed flush.” He said Metro was “very much stuck between a rock and a hard place”.
An external capital raise would be “excessively expensive at the moment”, while selling assets “just kicks the can down the road and doesn’t solve the underlying problem that the bank is over-costed and lacks scale”, he added.