Metro Bank saw share prices drop by approximately 30% today (5th October), following news that the challenger was seeking to raise funds in order to bolster its finances.
Shares were suspended briefly this morning, amid news in various publications, including the Financial Times, that the bank was seeking sources of funding following an overall drop in share price in recent weeks.
The share price reached a low of 34.97p at 2.30pm, having dropped from 50p to 38.74p between 8.30am and 9.00am.
Robert Sharpe, chair of Metro Bank, reportedly met with the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) today to discuss its options, which include a combination of equity issuance, debt issuance, refinancing and asset sales.
A statement from analyst DBRS Morningstar said: “We consider its ability to access external financing to be highly constrained given its very low market cap.”
The statement added: “Whilst the bank has made some progress in reducing operating costs since 2021, the bank has a very high cost base which reflects high investments in its branch network and in IT which has been exacerbated recently with the high level of inflation.”
Metro Bank, the PRA and the FCA were approached for comment prior to publication.
