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Great price for new entrants tbf. Managed to get my averages down to 38p but I might lose my house! GLA
Firstly, the hypothesis that you should stick together a specialist lender with a subscale current account provider is one i entirely agree with. It helps solve the quality of earnings issue with the former and the scale issues of the latter. So you get a tick for that
The issue is that Metro does not have the organic capital generating capability to do this sort of balance sheet transformation on its own in the near term.. As i have outlined below, it takes 3 years before management think they will make meaningful profits and there is plenty of downside in the interim. I wont set out in detail the maths behind why you can't just cycle existing mortgages and treasury assets into high risk lending in 2024.25, but its to do with the fact that the book is unhedged. So you need fresh capital to achieve this ambition (and again, a competent management team)
I think holding on expecting this management team to pull off the unlikely outcome above is a bad option. Which leaves 2 others
Firstly Galinski could do the buying . The issue for us is he will want to back the combination into the Metro entity to avoid fair value issues. That means it will involve cash and paper. And guess who will get diluted on that one. Yes, the same mugs (like me) that got diluted last time.
Alternative is to sell (to Shawbrook). I am all for that. But we need Frumkin out the picture, because he is seen as a complete fool by anyone that has had dealings with him including I strongly suspect both Pollen Street and Shawbrook management
"So we can expect Chatbot2 to come on line shortly to try and talk the share price down..."
Go on then, It's a quiet day and i'll have my 2p's worth (or £2.50p as Non-partisan will wittily point out).
I should start by saying I am not a day trader. I don't trade momentum and unlike TOD (thanks for genuinely useful intel BTW) I don't understand the dark arts of shorting. If you do, then i am sure there is money to be made from the volatility that there will be as this bounces between 27p and 34p for the next few months.
But you and others like Sharebul are moving into my territory when you talk about fundamentals and, in the probably naive view that there remains a vanishing small number of people on share chat who want to understand them. I'll set out the issue with your hypothesis regarding a re-rate
Im new buying all i can get under 30p a share this will rise when next 1/2 uear results come in .as long as interests rates stay around 4.5% we are quids in
So we can expect Chatbot2 to come on line shortly to try and talk the share price down...
No doubt he sold out last year, got caught out by the unexpected melee in October ('Member Since
11th Oct 2023') then wants to buy back in at a far lower price. Explains the negative and disparaging comments to date!
Shorts tend to lift the price early in the morning then sell heavy into the afternoon .. sold those bought low 28s this morning at 29.3 at open .... looking for 27p today to get the average down.
Agree its a pretty basic answer.
If both The Co-operative Bank (written off a couple of years back) and Virgin Money can generate pre tax profit margins of 15% to 25%, The Co-operative Bank revenues £400m+ and net profit £70m+ and Virgin Money £3.6 billion revenues and net profit £900m+ and both operate sizeable branch structures to Metro Bank. This begs the question why can't Metro Bank do the same especially as neither of these banks generate any security deposit box revenues.
The key issue is Metro Banks high fixed cost base which needs realigning to bring the bank back into line with the industry norm.
Reversing a mere £16m annual underlying loss is not that difficult to achieve to restore profits and bring the bank back on track with its turn around strategy.
It's just unfortunate that the Bank of England made a right mess of things in October last year and consequentially spooked the markets which highlights the unfair playing field regarding UK domestic challenger banks versus the Big Four who have an unfair advantage regarding capital adequacy requirements and buffers. They can use their own capital allocation models while challenger banks predominately low risk domestic UK plain vanilla banks are stuck with the formal much higher regulatory limits set by the Bank of England, a fundamentally flawed approach at regulation to protect consumers deposits and encourage competition in bank service's and costs.
Agree entirely Five we can carve ourselves out a very nice piece of the specialist lender pie and take the biggest slice! So undervalued it’s absurd really. Being dragged under 30 is this so the shorts dribs and drabs left can finally close here. I’m buying more as the way I see it there’s only one road we are now on and that leads far North of this current SP location! IMHO DYOR
Specialist lenders PAG and OSB execute share buybacks, as specialist lenders stocks are undervalued.
No brainer for Gilinski, cut cost, bring back profit, MTRO too will be a successful specialist lender. should be worth 1x Price book value
So Chatbox1 your in the exact same hole as every other Metro Bank investor then.
Welcome to the club!
I didn't want to say it, but from what i can see TGTD:
a) Does not understand the impact of interest rates on a bank
b) Does not understand the difference between current accounts and other deposits
c) One minute says something is worth 70p then its 40p
is it me, or is there a strong possibility that TGTD is actually Dan Frumkin?
Twogood has been well spotted, for anyone daft enough to believe the nonsense, dont
Anyone noticed that EVERY TIME TG2D says something positive about the stock it takes another nosedive? We're now UNDER 30p a share FFS.
Perhaps for the benefit of all us long suffering Metro holders he might just stop posting for a while in the hopes the share price might recover a little???
So who knows anything about Pictet Asset Management?
According to the website:
"Our structure as part of a privately-held partnership, rooted in Swiss tradition, gives our independent asset management business the freedom to concentrate on the long-term view, without the pressure of external shareholders. This allows us to give you our undivided attention, offer pioneering strategies and deliver successful investment performance."
So why is a secretive Swiss Asset Manager shorting us? Dori. any thoughts?
"So why were you not here crying out that Frumkin was lying at the last trading update guiding the market that Metro Bank had returned to profit and was now firmly reaping the fruit of its recovery?"
In terms of lying. i do believe there may be a case for litigation. In the prospectus the bank guided to low single digit ROTE in 2024, despite knowing the catastrophic impact of losing those deposits. So maybe rather than hoping they can turn it round the value play might be to sue them.
"So why didn't you take your own advice and not invest in Metro Bank last year if you thought it was a shoddy poorly led business?"
Because i genuinely thought that in a rising rate environment it was impossible to mess it up. From Dec 19- Dec 22 the bank had grown current account balances from £4.3b to £7.9b. Not i should say, because of anything Frumkin did. But people opened current accounts, and during Covid, kept a load of deposits on them. All they had to do is keep their fair share of them by not messing up. But they did. They lost all that value because the CEO was a clueless baffoon. And now he thinks by sacking everyone and destroying the model that generated those deposits, he can save his skin. But it just doesn't work. You cant shrink your way to glory with a sub scale current account business.
Chatbot2
So why were you not here crying out that Frumkin was lying at the last trading update guiding the market that Metro Bank had returned to profit and was now firmly reaping the fruit of its recovery?
Chatbox2
So why didn't you take your own advice and not invest in Metro Bank last year if you thought it was a shoddy poorly led business?
" The mortgage book brings an attractive proposal to any likely suitor. "
I've got another unhedged mortgage book yielding 3% if you want one. Special price- 99p in the £1.
I'm not employed by anyone to post here and I'm not overly negative on the bank, I would like it to succeed but I'm also realistic about it. Talking of which...
"We were pleased to return to profit on a statutory basis"
I bet the debt holders were not happy with the haircut that contributed to Metro Bank achieving this.
All that is all very well, but mkts just not buying it - it's shelved 1/5 of value in 6 days !
MT11 so are you employed by dwarves is this why you’re so overly focused on your plying of negativity? A small extract as a reminder that things aren’t the way you’re painting them here! Time to buy more! IMHO DYOR
‘Daniel Frumkin, Chief Executive Officer at Metro Bank, said:
“Overall, Metro Bank performed strongly in 2023 as we continued to position the business for growth. We were pleased to return to profit on a statutory basis and deliver our best half-year results for several years. After addressing our capital position in Q4, we also launched a successful deposit campaign, with deposits totalling £16.5 million as at the end of February 2024.”
“During the year we also launched a cost saving plan which included reducing store hours and roles across the organisation. These efforts will ensure the bank is right-sized for the future, with a strong focus on both digital and great customer service.”
“Looking forward, I remain confident in our ability to be the number one community bank. The work we have undertaken this year has laid the path to become a structurally profitable business and our focus towards the SME, Commercial and specialist mortgages sector presents an exciting opportunity in an underserved area of the market. I remain grateful for the continued support of our colleagues, customers and shareholders as we embark on the next chapter of our journey”.’
Got to buy in on ths sp price fill ya boots
"‘Folds into one of the bigger banks’… a possibility with a decent offer"
Keeping a bank from failing even if it wipes out shareholders is "a decent offer" to regulators and political parties.
We're some way off that but it can't be more of the same.
‘Folds into one of the bigger banks’… a possibility with a decent offer I wouldn’t be afraid of that scenario. The mortgage book brings an attractive proposal to any likely suitor. What offer would be satisfactory? I think however it turns around from here now to be honest happy to wait for either seeing as it’s barrels scraped time on the old SP so makes an ideal entry! IMHO DYOR