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LONDON (Alliance News) - Challenger high street lender Metro Bank PLC confirmed Thursday it planned to raise GBP350 million through a discounted placing at 500 pence per share as it looks to strengthen its capital position.
Shares in Metro Bank closed 8.1% lower at 536.50 pence on Thursday, down 69% since the start of 2019.
Metro Bank explained the placing would be completed through an accelerated bookbuild process and will completed later on Thursday.
"Metro Bank's capital position will be strengthened by its receipt of the net proceeds of the placing, which will allow it to further grow its loan balances and risk-weighted assets, while investing in the expansion of stores and new technologies," Metro Bank explained in a statement.
"Metro Bank's disruptive, customer-led model continues to attract new 'FANS' and grow strongly," Metro Bank added. "However, the macroeconomic backdrop in the UK has been particularly challenging over recent quarters and Metro Bank has not been immune to these pressures."
The lender explained it had been hit by a mix of macroeconomic difficulties such as regulatory changes and the low-interest rate environment as well as "company-specific factors." This includes the inability to secure regulatory approval to provide residential mortgages before 2021 as well as a risk-weighted asset adjustment in January.
Metro Bank emphasised its common equity tier one ratio stood at 12.1% at the end of March, following the placing this will widen to 15.6%. This is ahead of the 10.6% regulatory minimum required.
