Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Https://www.ft.com/content/4eb2aa0a-0c35-43ee-b921-ffc6cc5cdc58
Statement from the Bank of England
Published on 08 October 2023
Statement
Please see below a Prudential Regulation Authority spokesperson quote:
“The Prudential Regulation Authority welcomes the steps taken by Metro Bank to strengthen its capital position.”
https://www.bankofengland.co.uk/news/2023/october/metro-bank-statement
LONDON (Reuters) - British specialist lender Shawbrook made an offer for rival Co-op Bank and is weighing a fresh bid for embattled Metro Bank, people familiar with the matter told Reuters on Sunday.
“”Shawbrook, backed by private equity groups BC Partners and Pollen Street, tabled an indicative bid for Co-op in recent days, said the people, who spoke on condition of anonymity.””
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Separately, Shawbrook is considering a potential new bid for London-listed Metro Bank after several failed approaches earlier in the year, the sources said.
From last week’s RNS: “ For three consecutive quarters ended 30 June 2023, the bank has been profitable on an underlying basis, and it expects the Q3 trading update to show continued momentum in Personal and Business Current Account growth and customer acquisition, in line with expectations. Metro Bank continues to be well positioned for future growth.
”
“The bank’s shares jumped as much as 30% on Friday afternoon, reversing a 25% drop a day earlier that was sparked by fears it could struggle to source enough funding – including to refinance £350m worth of bonds as early as next autumn.
While shares have lost half their value over the past month, Metro stock ended the day up 21% at 45.25p each.
The recovery came amid news that the bank – which became the UK’s first new high street lender in more than a century in 2010 – had been sitting on an offer for a £600m capital injection from bondholders since Monday.
The Financial Times said Metro Bank had acknowledged but not yet accepted the offer, which could cover its funding needs and avoid the need to sell off assets. The newspaper said bondholders – represented by boutique investment bank, PJT Partners – first contacted Metro Bank’s board on Monday, two days before news of its funding needs caused panic and a drop in its share price.
PJT was contacted for comment and Metro Bank declined to comment.
Metro Bank’s funding needs have gained more attention than usual, given the simmering concerns over any lingering weaknesses in the banking sector. It follows the mini-crisis in March that led to the collapse of three regional US lenders, including Silicon Valley Bank and Switzerland’s largest lender, Credit Suisse.
The challenger bank has insisted it is “well positioned for future growth” and pointed to the fact that it swung back to profit in the first half of the year.”
https://amp.theguardian.com/business/2023/oct/06/metro-bank-shares-capital-offer-mortgage
The share price should never have dropped to this level. The board had to either make sure no one knows about what’s going on behind closed doors since early September (when the shorting started) or been transparent once it was clear that the shorts had insider knowledge.
If the 30% drop was meant to happen then 30% drop from 100p last month is 70p while 30% drop from yesterday’s 50p is 35p …. The board failed to properly handle the shorting situation, leading to an unnecessary severe decline in share valuation.
Metro Bank Holdings PLC ("Metro Bank") (the "Company")
Legal Entity Identifier: 984500CDDEAD6C2EDQ64
Response to press speculation
Metro Bank notes the recent press speculation regarding a potential capital raise. Following Metro Bank's update on capital planning on 12 September 2023, the Company continues to consider how best to enhance its capital resources, with particular regard to the £350m senior non-preferred notes due in October 2025. The Company continues to meet its minimum regulatory capital requirements and had a total capital plus MREL ratio of 18.1% and a leverage ratio of 4.4% as at 30 June 2023.
The Company is evaluating the merits of a range of options, including a combination of equity issuance, debt issuance and /or refinancing and asset sales. No decision has been made on whether to proceed with any of these options.
For three consecutive quarters ended 30 June 2023, the bank has been profitable on an underlying basis, and it expects the Q3 trading update to show continued momentum in Personal and Business Current Account growth and customer acquisition, in line with expectations. Metro Bank continues to be well positioned for future growth.
I also sold my shares. I thought they would save most of the money from selling the Argentinian asset, but they ended up spending almost all of it. The current market value compared to their assets and cash is not realistic. They basically don't have any money or assets left.
“. Total cash, cash equivalent and other short term liquid assets (after the placing) are circa £415,000 of which approximately £230,000 is held in shares of Interoil Exploration and Production ASA and the cash balance after receipt of the placing proceeds will be approximately £185,000.”
It looks like they’ve sold some of their shares in Interoil too : “from 26 May RNS: Payment in kind of £0.4 million via transfer of Interoil shares upon completion“
May’ shares value: £400k vs. September’s shares value: £230k