Member Info for bigsmoke

Also might explain why Metro were able to land Nationwide’s chief transformation officer, last week
https://www.finextra.com/pressarticle/82716/metro-bank-poaches-nationwides-chief-transformation-officer

Thanks OTF.

“This is good news for Goldman, which has flirted with launching a retail banking arm several times over its 150-year history, and has found a neat way to push ahead in a competitive market by leveraging the star power of the Apple brand. For Apple, it’s a chance to tap into the credit market without much risk: although Apple handles the branding, the back end is operated by Goldman, and debt and billing.”

Worth remembering too that the GS investor day spoke of corporate partnering around retail banking..... that was months ago and not seen much action there.

One reason for delay was probably covid breaking out. However, if GS is planning a move, how much has that too big too fail Fed stakeholder squirrelled out of big Dons 3 trill stimulus package???? Half a billion would be nothing. Gives them a mighty big London presence to scoop all those lucrative deposits for those wanting to trust brand vampire squid

Thanks Matlot.

I never got an answer to the “GS client x” riddle over the last three months of posting . The theory below might offer one possible, if not probable, explanation.

I mean, why would GS shudder stop the fast Marcus growth because of UK banking rules? When a £200m workaround is sitting literally on the London doorstep.

Of course the Chinese could have been eying up too. As could have BOB and PE and others. Marcus hitting the buffers could be He natural event to perk up the interest in other bidders

Of course allowing your rich banking mates to fill their boots - and let a % ride post deal is no bad thing.

My theory is that ENA, GSA and Vole borrowed from GS the 8.5% to aid the exit of Cohen, ride the market down, and help Bacal accumulate. It was too early for Marcus. Now they have hit the limit ENA knew it was close and scuppered. Now GSA and vole being recalled. Odey is alone.

Now there’s a problem for GS to solve..

If only they could RECALL the 8.5% they had but shunted to a client ...........

“Ring-fencing would require Marcus in Britain to become a separate legal entity with its own board and limit how much capital it could share with the rest of Goldman’s businesses.

“Separating Marcus financially and operationally from Goldman Sachs would be a significant change to our low-cost business model, which allows us to pay consistently competitive rates to existing savers,” McDaid added.

Several British bank executives have said the brand named after Marcus Goldman, co-founder of the Wall Street investment bank, is one of the most potent “disruptors” in the market.”

https://www.metro.us/exclusive-savings-surge-forces/

LONDON (Reuters) – Goldman Sachs is closing its easy access savings business to new customers in Britain from Wednesday after deposits surged near to regulatory limits during the coronavirus lockdown.

The British arm of digital brand Marcus, which pays market-leading rates to savers starved of meaningful cash returns, has attracted about 21 billion pounds ($27 billion) from more than 500,000 savers since its launch in 2018.

However, British banking rules demanding ring-fencing of retail deposits totalling more than 25 billion pounds have prompted its executives to take steps to manage its growth.

“We’ve really seen our growth accelerate under lockdown as people hold off on discretionary spending and take time to reorganise their finances and get the best deal for their money,” Des McDaid, head of Marcus UK, told Reuters.

LONDON (Reuters) – Goldman Sachs is closing its easy access savings business to new customers in Britain from Wednesday after deposits surged near to regulatory limits during the coronavirus lockdown.

The British arm of digital brand Marcus, which pays market-leading rates to savers starved of meaningful cash returns, has attracted about 21 billion pounds ($27 billion) from more than 500,000 savers since its launch in 2018.

However, British banking rules demanding ring-fencing of retail deposits totalling more than 25 billion pounds have prompted its executives to take steps to manage its growth.

“We’ve really seen our growth accelerate under lockdown as people hold off on discretionary spending and take time to reorganise their finances and get the best deal for their money,” Des McDaid, head of Marcus UK, told Reuters.

Talks about a possible £3-£3.50 bid by JCB being rejected perhaps by the BOD. That was, of course, before the board got replaced.

Worth re-reading this ...
https://contrarianinvestor.net/posts/tag/metro+bank+takeover

“To sellside, and Metro Bank goes down to “sell” at Investec. The upshot is that in spite of everything it remains as close to becoming a functioning metro as a functional bank. Even at 0.2x 2020e tNAV it’s not a bargain when you have to wait for 2024 for any kind of profit, Investec says:

When Metro Bank launched ten years ago in Holborn it embarked on an epic journey to win “fans” and change the face of British banking. This week, as it opens its second store in Cardiff, (store No.76 in the UK), complete with drivethru service, from a customer perspective, the Metro story continues to thrive. It now boasts over 2 million customer accounts. However, the path back to profitability still appears much more problematic, and as such, following a 6- day 54% share price bounce, on 0.2x 2020e tNAV, we cut to Sell (from Buy).
... In essence, although Metro’s “static” capital position was strong at 31 Dec 2019 (CET1 capital ratio 15.6%), it needs to conserve capital to absorb (1) planned investment spend through 2020-23 to “retool” the business, and (2) a LOKIN-20 IFRS9 impairment charge in H1 2020. As such, it has been shrinking the loan book (on a net basis) over the past four quarters and we do not expect it to recommence growth until 2021e.
... Metro is, in its existing format and in the current low interest rate environment, “structurally” loss-making. Its cost of deposits rose sharply during 2019 following the “RWA miscategorisation” debacle which was disclosed in January 2019. In this regard it has, we believe, turned the corner, with three consecutive quarters of net deposit inflows, with marginal deposits once again being sourced through current account and “relationship” deposits rather than relying on expensive fixed term products. However, Metro has yet to rebalance its loan portfolio to enhance yield. It is heavily underweight consumer lending.”
https://ftalphaville.ft.com/2020/06/09/1591698256000/Markets-Now---Tuesday-9th-June-2020/

looks like 140 was the day high.
hopefully smashed tomorrow.

cud - 50p on share price now is 100p on share price tomorrow...

Investec upgrades its investment rating on Metro Bank PLC [LON:MTRO] to buy (from hold)

pity the SP is not at June 2019 levels.

yet.