By Roger Baird on 13th May 2019
The troubled challenger bank needs to raise £350m after discovering an accounting black hole.
Metro Bank was forced to deny it was running out of cash after customers queued up to empty their accounts at the beleaguered lender.
Hundreds of customers flocked to a number of the challenger banks branches in west London over the weekend to withdraw assets following reports on social media that lender could not meet its obligations.
The move follows unsubstantiated warnings that circulated among west London community WhatsApp groups on Saturday about the bank's health, which saw customers rush to nearby branches to withdraw valuables from safety deposit boxes.
The lender is in the final stages of raising £350m following the disclosure an accounting fiasco in January, after underestimating how much shock absorbing capital it held. It has seen its share price plummet by 85 per cent since the start of the year.
Metro Bank said: “We’re aware there were increased queries in some stores about safe deposit boxes following false rumours about Metro Bank on social media and messaging apps. There is no truth to these rumours and we want to reassure our customers that there is no reason to be concerned.”
Banking analysts expect Metro Bank to present its plans to fill its black hole to investors as early as this week, which could consist of a deeply discounted share sale and a sell off of some of its loans.
Last month, the FTSE 250 bank saw its first quarter profit cut in half to £4.3m in the wake of the accounting mistake, amid a number of large commercial clients withdrawing funds from the lender.
Metro was launched in 2010 by US billionaire and chairman Vernon Hill, following the financial crisis. It offers seven-day banking and high levels of service, and was widely regarded as one of the most successful challenger banks set up to contest the dominance of the UK’s high street banks. It runs 67 branches, has 1.7 million customers and holds a £22bn balance sheet.