BoE approached UK lenders to gauge interest in troubled Metro Bank: FT

LONDON: The Bank of England’s Prudential Regulation Authority approached a number of big UK lenders this week to see if they had any interest in taking over British lender Metro Bank, the Financial Times reported on Sunday.

JPMorgan and HSBC studied bids for Metro before opting not to proceed on Saturday after being deterred by the extra capital a buyer would have to put in, the report said. The Bank of England and HSBC declined to comment.

JPMorgan and Metro Bank did not immediately respond to Reuters’ requests for comment. Metro Bank has recently rejected a series of takeover approaches from specialist business lender Shawbrook and on Saturday held talks with bondholders about an equity injection alongside a debt restructuring, media reports said.

Consultancy EY is running the bidding process for Metro, the FT said. Metro is hoping to finalise a deal that would secure it new funds before the stock market opens on Monday, the report added.

Metro Bank has been considering a number of funding options after a series of setbacks in recent years, including accounting errors, leadership departures and delayed regulatory approval for key capital reliefs.

Metro Bank said on Thursday its options included a combination of equity and debt issuance, as well as refinancing and asset sales.

It said that it met its minimum capital requirements and had not made a decision on fundraising plans.

Reuters had reported that Metro Bank was set to discuss funding options with its shareholders over the weekend as the lender seeks to shore up its finances and assure regulators after a volatile week of trading.

Metro Bank’s shares on Thursday hit a record low after news of the fundraising. They pared losses on Friday to close up 21% at 45.25 pence. The stock has fallen more than 55% over the past four weeks.