8 March 2016 – Financial Times
Metro Bank has raised £400m from some of the largest global asset managers ahead of its debut on the London Stock Exchange on Monday, in a move that values the lender at £1.6bn.
The “challenger” bank, which launched in 2010 to take on the large high street lenders, said it had sold shares at £20 each through a private placement to new and existing investors. The listing will value the bank at about twice its book value. Metro was forced to slash the size of its initial public offering by almost a fifth last month because of a selloff across the banking sector at the start of the year. It reduced the price of its shares to £20, down from the £24 originally planned, which would have raised £500m.
Vernon Hill, chairman and cofounder of Metro who is well known among US investors for launching a number of banks in North America, revealed last month that he would hold 8 per cent of the shares in the bank. “The capital raise we are completing will further support our growth plans,” said Mr Hill on Friday. The bank has raised more than £1bn of equity capital from shareholders to date. Metro, which is still loss making, offered shares to existing investors, including BlackRock and Fidelity, along with wealthy individuals such as veteran investment banker Ken Moelis and US property developer Richard LeFrak.
Investment manager Wellington, hedge fund veteran Stephen Cohen, and property investors the Reuben family are also among its shareholder base. Metro said last month that its losses were reducing. It aims to make a profit for the first time by the end of this year. The bank posted an underlying loss of £40.7m for 2015, down from £41.1m the previous year.
The bank focuses on opening branches in prime locations in London and the south east, at a time when other high street banks are cutting back their networks to save on costs. Metro said it minimised operating costs by offering safe deposit boxes in its branches, where the fees can cover as much as 80 per cent of property rental costs.
The bank’s listing comes weeks after that of Clydesdale and Yorkshire bank, which was forced to delay its debut on the LSE by a day last month. Most of the shares in the UK challenger were offloaded to its parent group National Australia Bank’s existing investors.