Metro Bank bosses summoned for meeting with City watchdogs after share price slump
The bosses of Metro Bank have been called in to meetings with the UK’s financial watchdogs after its shares slumped over 20 per cent this morning.
The chair and chief executive of the struggling bank have been asked to meet officials from the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) later today, according to the Financial Times.
Its shares slumped this morning after reports that it had hired bankers at Morgan Stanley and Moelis to raise £600m in extra financing, which includes £250m in equity funding and £350m in debt.
Royal Bank of Canada, Metro Bank’s corporate broker, is also involved in the equity raise, while a possible £100m in share sales is also being considered.
In a statement out this morning, Metro Bank confirmed it was “evaluating the merits of a range of options,” including equity or debt issuance and the refinancing of assets, but said ” no decision has been made on whether to proceed with any of these options”.
Ratings agency Fitch placed Metro Bank on negative watch on Wednesday, citing concerns over its capital strength, funding and business model.
Its shares slumped last month after it announced that plans that would allow it to reduce its capital requirements against mortgage lending had been put on hold after failing to secure the PRA’s approval.
Metro, founded in 2010, was hit by an accounting scandal in 2019 when £900m of loans were classed as less risky than they were, prompting the resignation of chief executive Craig Donaldson.
The co-founder Vernon Hill also stepped down as chairman that year.
The resulting share price collapse was the biggest single-day fall of any UK bank since the 2008 global financial crisis, and Metro has been attempting to restore its reputation since.
The FCA declined to comment. The PRA was contacted for comment.
Metro Bank was also contacted for comment.