Metro Bank shares rebound from all-time lows after Whatsapp rumours quashed
Metro Bank shares have rebounded today after plunging to all-time lows following false Whatsapp rumours of fresh financial turmoil.
The challenger bank’s share price has risen 7.7 per cent this morning, returning to 511p – similar levels as yesterday morning.
Read more: Metro Bank denies rumours of financial trouble ahead of fundraising
But the stock plummeted to all-time lows of 475p yesterday after the bank was forced to quash rumours on social media.
Some customers rushed to branches in west London over the weekend to withdraw money and items from safe deposit boxes following warnings on Whatsapp.
The bank said the rumours were false and insisted it remained a “safe and secure haven” for customers’ money.
Metro Bank also attempted to reassure customers that its £350m capital raise – in response to a major loans blunder – was “well advanced.”
Despite today’s bounce, the bank’s stock is down 77 per cent since the lender admitted in January that a swathe of commercial loans had been wrongly classified and should have been among its “risk-weighted assets.”
The company plans to tap up investors for £350m in a rights issue that could be launched later this week.
Hedge funds have also circled the bank ahead of the capital raise and Metro's 11.6 per cent short position makes it the most shorted UK stock.
Pressure has mounted on the board ahead of the bank’s AGM later this month.
Shareholder advisory group Glass Lewis has urged investors to vote against the re-election of chairman Vernon Hill over payments made by the bank to Hill’s wife’s architecture firm InterArch, which has a contract for the design of its branches.
The firm also ramped up its criticism of the bank’s governance and called for fresh faces on the board to avoid the risk of ‘group-think’.
Another proxy adviser ISS urged shareholders to abstain on re-electing chief executive Craig Donaldson and chairman Vernon Hill.
ISS said accountability for the loans error sat with the pair, as well as directors Steve Bernau and Gene Lockhart, but noted that regulatory probes were still ongoing.
Read more: Major investor cuts Metro Bank stake by almost a third
The firm also recommended shareholders vote against the bank’s remuneration report, and in particular chief financial officer David Arden’s £288,000 bonus, at the bank’s AGM later this month.
“This payment is not considered appropriate given the recent shareholder experience, including the significant fall in share price,” ISS said in a note.