Shares in Metro Bank fell on Thursday following rumours that the bank was planning to raise millions to bolster its balance sheet. However, the bank has insisted that it remains financially sound, and its shares staged a recovery the following day.
Metro Bank was established in 2010 as a “challenger” to more traditional lenders. It was the first UK high street bank to open in more than a century and offers customer-friendly perks, such as seven-day opening and water bowls and biscuits for customers’ dogs.
The bank currently operates from 76 branches across England and Wales, with 11 more planned for the north of England in the next few years. Although it has won 2.7 million customers, analysts have noted that, like many banks, it has struggled to make profits during recent years when interest rates were at historic lows.
Metro Bank has faced several challenges in recent years, including an accounting scandal in 2019 that resulted in some senior executives leaving the bank. The bank has also been struggling to establish sustained profitability since the departures.
City watchdogs recently rejected the bank’s request to use its own ratings system to value its mortgages and assets, but last week, reports emerged that it was seeking to raise funds from investors and lenders and possibly to sell some of its mortgages before refinancing its debt.
Although the bank does not face an immediate threat, concerns about its financial health led to scared shareholders selling their stock, causing the share price to plummet and its stock market value to fall to less than £100m
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