Virgin Money spikes as it joins the buzz over Metro Bank ‘bid’
TROUBLED lender Metro Bank was in the spotlight again as the City rumour machine moved into overdrive.
On Friday this column tipped Lloyds Banking Group as mulling a bid for the bank after the recent departure of chairman and founder Vernon Hill.
Today Virgin Money shares shot higher, 4.7p to 143p, after brokers said it too was circling.
Brokers said Virgin Money, the UK’s sixth-largest bank, had the firepower to make an acquisition, adding that it has a history of snapping up challenger bank lenders.
Last year CYBG, the owner of Clydesdale and Yorkshire Banks, bought Virgin’s UK operations for £1.7 billion and then rebranded as Virgin Money.
It is understood that the City regulator would back a deal for the troubled lender as it is said to be concerned by Metro’s declining financial position.
But others were more sceptical, pointing out that the merger between CYBG and Virgin has not been a success. The combined company is now only worth slightly more than it paid for Virgin. It has seen heavy job cuts and failed to win any of the up-for-grabs funding from RBS to boost challenger banks.
At the same time the bank clocked up a full-year loss in September after being hit by PPI payouts. Metro’s shares were off 4.4p to 227p, valuing it at just £391 million. In the top flight, the FTSE 100 was up 56.63 points to 7359.05.
The gains were driven by miners after US Commerce Secretary Wilbur Ross said overnight that the US and China were making “good progress” in trade negotiations. He said there was “no natural reason” why a deal could not be signed in November. Glencore added 7.7p to 248p, while Anglo American gained 45p to 2089p.
Fallers, included insurer Hiscox, which disappointed after Hurricane Dorian and Typhoons Faxai and Hagibis hit hard. Payments to cover the disas
Small-cap spotlight
SHARES in Igas crashed today after the Government said at the weekend it had withdrawn its support for fracking, following an earthquake at Cuadrilla’s Preston New Road site in Fylde, Lancashire. Igas had been hoping to follow Cuadrilla into fracking. Its stock fell 13%, or 5p, to 31p. ters are expected to be $165 million (£127 million), well above the $70 million Hiscox set aside to cover freak acts of nature.
Chief executive Bronek Masojada said he was “disappointed” and the shares fell 2.3%, or 34p, to 1441p.
In the technology space Draper Esprit hired Martin Davis as its new chief executive officer.
Davis joins from money manager Kames Capital. The firm also said trading remains in line with its financial objectives of a 20% increase in its portfolio for the year. But the shares were down 2.5p to 446p.