Metro bank speeds growth
LONDON: Metro Bank is stepping up its UK expansion after raising £50m of fresh funds from existing investors to open more branches and grow its commercial business.
The bank, which launched in July, is now planning to open 18 branches within two years, six more than it had previously targeted. It is also looking to beef up its business banking division following an influx of customers, including a number from Royal Bank of Scotland that were due to be transferred to Santander as part of the government-backed bank's branch sale.
Metro's existing base of investors includes the bank's senior directors as well as fund managers Fidelity and Wellington Capital and a clutch of property developers.
The second round of fundraising was completed at 900p a share, a 20 per cent premium to the 750p launch price. Vernon Hill, the bank's cofounder and vice-chairman, is the largest shareholder, owning just over a fifth of the bank.
Metro initially raised £75m to fund the opening of four branches in its first year and eight in its second. It thought this amount would see it through to its third year, when it plans to list on the stock market.
But stronger-than-expected demand for its traditional banking model, which aims to offer customers better service and longer opening hours, persuaded it to accelerate the expansion. Metro now plans to increase branch openings in west London and make further inroads into Kent and Surrey.
Anthony Thomson, chairman, said it was also expanding its commercial division "very quickly" after businesses had shown a greater appetite for better service than consumers.
"A lot of businesses are interested in moving, not because they want credit but because they want service," he said. Metro's expansion comes amid a growing debate on the level of competition in the UK banking market. The dominance of the "big four" banks is increasingly becoming the chief focus for the governmentappointed Commission on Banking. -PB News
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