England’s Metro Bank has secured a substantial $1.1 billion in speculation from a group of stockholders, marking a noteworthy development after a stimulating week. According to a Bloomberg News report on Sunday, October 8th, this funding package includes a £325 million investment infusion, containing £150 million ($183 million) in new parity and £175 million ($213 million) in new MREL (Minimum Requirement for Own Funds and Eligible Liabilities) issuance.
Moreover, Metro Bank aims to refinance £600 million ($732 million) of existing debt. The fundraising efforts are set to be led by Spaldy Investments, Metro Bank’s largest stockholder, which will obtain a majority (53% stake) in the bank due to this investment.
In reply to these growths, the Prudential Regulation Authority, the financial regulator of the Bank of England, has uttered its approval and support for Metro Bank’s measures to boost its capital position, as stated in a Sunday press release.
PYMNTS has reached out to Metro Bank for further comments on this development, but a response has yet to be received. Metro Bank has thoroughly worked to shore up its financial stability over the past few days. Reports specify that the bank’s stock prices experienced a noteworthy decline following the announcement of its £600 million capital-raising attempt aimed at stimulating its balance sheet.
In another report by the Financial Times (FT), citing insider sources, it was exposed that the regulatory authority had started discussions with several famous banks in the United Kingdom to explore their interest in obtaining Metro Bank. Among the nominees, NatWest, Santander, and Lloyds Banking Group had been evaluating the prospect of bidding for certain assets of Metro Bank. However, some banks had ruled out a complete achievement.
According to the Financial Times, JPMorgan and HSBC decided to wait to submit bids on Saturday. Sources propose these two banks need to be more open due to the mandatory additional capital infusion for a Metro Bank acquisition. Before this year, HSBC played an essential role in the outcome of another banking disaster when it learned about the U.K. operations of Silicon Valley Bank following the latter’s collapse.
Noel Quinn, HSBC Group CEO, emphasized the strategic significance of this acquisition, strengthening HSBC’s commercial banking portfolio and enhancing its ability to serve dynamic and rapidly expanding firms, particularly in the technology and life sciences sectors, both in the U.K. and internationally.
Furthermore, the United Kingdom launched a £1 billion investment fund earlier this year, known as the Fintech Growth Fund. This fund is designed to foster the country’s position as a FinTech hub and aims to support growth-stage financial technology companies until they are prepared for initial public offerings (IPOs). This initiative was launched in response to criticism that the U.K. was imposing obstacles on its FinTech entrepreneurs, compelling them to consider overseas listings.
As previously reported, the Fintech Growth Fund intends to invest in a wide range of companies, including consumer-focused challenger banks, payments technology groups, and financial infrastructure providers, all contributing to the continued growth and innovation within the FinTech sector in the United Kingdom.
