Metro steadies ship after rush to pull out cash
MeTRo Bank has admitted savers were pulling money out of their accounts amid fears over its future before an emergency fundraising last month.
In october, the troubled lender secured a £925m lifeline that included the sale of £150m of new shares as well as £175m of fresh debt on top of a £600m refinancing of existing loans.
Metro said yesterday it saw ‘an increase in deposit outflow rates’ ahead of the deal as customers rushed to withdraw their cash. It said withdrawals have now ‘ returned to more normal ranges’.
The firm also revealed that deposits for the three months to September totalled £15.6bn, down 5pc year-on-year, while the size of its loan book dipped 2pc to £12.5bn.
Metro shares increased 1.1pc, or 0.45p, to 43p.
At the time of the surge in withdrawals, Metro had posted profits for three quarters in a row, but its capital levels – the amount of easily accessible cash held by the bank – were only just above legal requirements and posed a threat to its lending ability.
In September, it was refused permission by the Bank of england’s Prudential Regulatory Authority to evaluate mortgage risks using its internal models, which large banks can use to enhance profitability.
Metro has also struggled to reduce costs due to its network of 76 branches across the UK. The october bailout handed effective control to its largest shareholder, Colombian billionaire Jaime Gilinski Bacal, who provided the bank with a £102m cash injection and saw his stake balloon from just over 9pc to 53pc.
At the time, the bank vowed to press on with plans to open more bank branches despite agreeing to cut costs by £30m a year as a condition of the funding deal.