Metro Bank, a UK-based financial institution, has received crucial support from its shareholders for a £325 million ($441 million) rescue deal, signalling a pivotal moment in its efforts to secure its future. The news of this development coincides with reports that Barclays is engaging in exclusive negotiations to acquire Metro Bank’s residential mortgage book, valued at £3 billion ($4.08 billion).
Approved by over 90% of Metro Bank shareholders at a meeting on Monday, the rescue deal involves £325 million of new funding and the refinancing of £600 million ($814 million) of debt. Notably, Colombian billionaire Jaime Gilinski Bacal is set to become a significant player in Metro Bank, acquiring a majority stake of 53% through capital fundraising.
The move comes at a crucial juncture for Metro Bank, which has faced many challenges recently. In 2019, the bank grappled with an accounting scandal, leading to the departure of key executives, including the bank’s founder. The scandal’s aftermath has lingered, impacting investor confidence and contributing to a decline in Metro Bank’s share value.
To strengthen its capital position and chart a course for recovery, Metro Bank is reportedly in talks with Barclays regarding the potential sale of its residential mortgage book. The £3 billion portfolio is considered a strategic move to enhance Metro Bank’s financial stability. Talks with Barclays have progressed to exclusive negotiations, marking a significant step in the potential acquisition.
Barclays, not limited to its interest in Metro Bank’s mortgage book, is concurrently exploring the possibility of acquiring Tesco’s banking operations, as reported earlier this month by Reuters. These strategic moves underscore the banking sector’s dynamic landscape, where institutions actively seek opportunities to strengthen their positions and enhance their offerings.
As Metro Bank navigates these pivotal developments, the outcome of the negotiations with Barclays and the successful implementation of the rescue deal will be closely watched by the financial industry, investors, and stakeholders alike.