Goldman Sachs clarifies Metro Bank holding after slip-up5 Mar 2020 09:52
https://www.fnlondon.com/articles/goldman-clarifies-metro-bank-holding-after-slip-up-20200305
Filings by the bank had led to reports it was building a position in the ailing challenger bank
An error by Goldman Sachs has forced the bank to deny reports it is building a position in the struggling lender Metro Bank.
A London Stock Exchange update on 28 February stated that Goldman had acquired an 8.48% shareholding in the Metro Bank, meaning it had to disclose the position, but a later filing clarified that the first update “arose due to an operational issue” and that Goldman holds just 0.34% of the lender’s shares.
A person close to Goldman told Financial News that the issue was the result of “client trading facilitation”, suggesting that the investment bank was dealing in Metro shares on behalf of a client.
A decade ago, Metro Bank became the first new bank in over a hundred years to hit British high streets, but the lender has struggled in recent times.
In February 2019, weeks after winning the top prize of £120m from a pool of government grants — a legacy of RBS’s crisis-era bailout — Metro Bank admitted to a £900m accounting error that sparked a steep decline in its share price. The bank announced that it would repay £50m of the grant money in February, after scaling back its growth plans.
Metro Bank’s shares are currently trading at roughly 16op, down from 966p this time last year. That decline has attracted the attention of investors including the Colombian billionaire Jaime Gilinksi Bacal, who bought into the company in November through a company named Spaldy Investments Limited. He further increased his holding to 8.077% on 2 March, according to London Stock Exchange filings.
A spokesperson for Metro Bank said: “We don’t comment on our shareholders.”
The firm announced Dan Frumkin, formerly chief operating officer of a Bermuda-based community bank, as its new chief executive officer on 19 February, following the departure of his predecessor Craig Donaldson in December. Frumkin’s first task was to preside over financial results, published 26 February, that were headlined by £130.8m in statutory losses before tax for the year to 31 December 2019.
During a media call on 26 February, Frumkin said: “I do think there’s a path forward as an independent company. This plan assumes no more equity capital. So, we’re not going to go back to our shareholders asking for more equity capital. This is a plan that really relies on us just living within our means, and the plan is pretty straightforward: we just need to be more Metro.”
To contact the author of this story with feedback or news, email Ryan Weeks
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