Metro Bank agrees £925m rescue deal
The high street bank has secured a £325m capital raise from new and existing investors alongside £600m of debt refinancing
Metro Bank has struck a rescue deal with investors after a weekend of negotiations.
The bank managed to secure a £325m capital raise, including £150m from new investors, and £600m of debt refinancing.
Spaldy Investments, the bank’s largest shareholder, is leading the equity raise with a contribution of £102m.
The investment will bring Colombian billionaire Jaime Gilinski Bacal’s stake in the business up from nine per cent to 53 per cent, making him controlling shareholder.
He has been an active investor in the bank since 2019.
“The opportunity to become the Bank's major shareholder is driven by my belief in the need for physical and digital banking underpinned by a focus on exceptional customer service,” Gilinski said.
“I believe that the package announced today enables the Bank to pursue growth and build on the foundational work undertaken over the past three years.”
The Prudential Regulation Authority (PRA) monitored the negotiations closely and said it welcomed the steps Metro has taken to “strengthen its capital”.
The PRA has approached several rival banks about possibly buying the bank, with a number of other companies, including JP Morgan Chase, uninterested in making a deal to fully take on Metro.
Some, including NatWest, Lloyds and Santander, are believed to have been interested in parts of the group.
The bank is also in discussions about selling up to £3bn of residential mortgages
Metro Bank CEO Daniel Frumkin said the deal marks a “new chapter” for the bank, facilitating the delivery of “continued profitable growth over the coming years.
He reiterated Metro’s ambition to be the UK’s number one community bank.
“Our strong franchise is underpinned by our loyal customer base and engaged colleagues and we will continue to develop the Metro Bank offer to provide the digital and physical banking services our customers expect,” Frumkin said.
“We thank our shareholders and noteholders for their continuing support of Metro Bank and our customers."
The bank is launching a cost-cutting plan for the final quarter of the year, aiming to reduce its costs by around £30m a year from 2025 as part of the deal.