Member Info for Jinny122

.....Accept that Metro needs to be sold pronto, or at least begin an orderly liquidation of assets and hand net proceeds back to investors.

Cant think of a credible alternative now.

NOVE.

This is pure guess work though, so it could be anything.

Our efforts are best applied towards analysing the facts / situation on the ground as we have been trying to do already.

The new CEO seems very sharp I'll admit, so I dont see him coming to Q1 empty handed after 7 months in situ (3 as restructuring officer and 4 as CEO).

Especially after acknowledging Metro has it's work cut out to regain credibility in the market place.

NOVE.

With the company having nothing new to say to anchor the SP, who knows.

With evidence of material positive movement, it will easily break the 100p barrier and wont return ever again.l

Bigsmoke.

It may be too late by Q2. Aim should be to shepherd to safety before being bafly caught out by recession.

Cyberdog.

Most of them were former CEOs of huge divisions of top tier banks. And all were rushed in for a good reason.

No coincidence that Q1 is coming up and the new strategy is already in tatters

Definitely kicking off, too many investors sat on huge loses here.

For what its worth, looks like there is a big decision imminent by the Metro board.

The sudden and immediate appointment of three highly accomplished new independent non-execs, all starting work immediately and simultaneously on the same day of announcement signals this.

After all, their primary job is to scrutinise big board level decisions. Metro truly punched way above their level with the calibre of those appointments

Theosus.

Calmly does it. You've completely misunderstood.

Not 6 bag on good news, but that such news like MREL redemption / refinance could lead to a sustained rise. This touched £9/share post share placing in June/July 2019 before MREL fiasco.

Theosus.

No hope of a standalone turnaround here, even before coronavirus let alone now when facing the worst recession in almost 100 years. Management will know this.

Dan Frumkin even admitted that he had doubts about the ongoing standalone ability of the business, but was later persuaded that it was a revenue growth problem rather than anything else. His strategy was designed to grow revenue by taking more risks for more reward by heavily pushing into unsecured debt and very high ltv mortgages. Then coronaviris and a deep recession happened, and thats history.

Seriously looking at whether to add, this looks like one of the very best upside potentials in the market today. It could bag six times and still be considered much too cheap if there's material good news (like MREL redemption / refinancing).

Theosus.

That 7.9% rate will now turn out to be a blessing in disguise as it will have put off customers.

Nothing much to explain, Metro cant grow profitably, so needs to charge unattractive sky high rates to cover sky high costs, the same is true on its mortgage products.

A pure t/o event play.

Theosus.

Metro is pure t/o event play, we've all estiblished 6 months ago that it cant grow profitably on its own in the savagely competitive retail banking environment.

Now the new last ditch strategy, announced just 2 months ago is a complete wreck due to coronavirus.

So all things considered, Metro's best hope is to reassure the market (and acquirers) on its asset quality.

Theosus.

Good points.

With regards to Lloyds, strangely their loan book was solid just like Metro's. This wasnt the driver of the provision according to Ceo's statement.

Lloyds is massively exposed to unsecured debt, dont forget they have also acquired MBNA credit card business to expand in this area. They're one of the very biggest providers of personal loans also.

So if furlough scheme ends and job cuts follows, massive lossess are likely.

Metro doesnt have such problem, if they're doing just 2 personal loans a month in branch and hardly any uptake on their uncompetitive single credit card offer of a flat rate of 15% with no 0% periods.

Tombo13.

The Algos are only taking advantage of the weak SP.

If management gave reason for belief and optimism here, buyers will over power the Algos easily.

Volume on Friday was less than 0.5m shares, a miniscule 0.3% of total shares in circulation.

Theosus

At the moment banks are being measured on balance sheet quality and CET1 capital ratios as opposed to profit.

Metro should do well on these, so SP could re-rate massively, and it'll remain attractive to acquirers.

If on the other hand management sells the mortgage book and pushes into high risk lending (as is the latest strategy), then it'll be the reverse reaction

Does anyone think Metro should fare better than rivals due to minimal credit card, personal loan and unsecured lending?

Vast majority of loans are collateralised with property at relatively low LTVs. They have the previous management to thank for that, and I see they thanked them in the Annual Report.

If losses are low, this SP should Fly come wednesday

....Sell a huge chunk of the resi mortgage book to re-invest in niche mortgages, SME loans and unsecured lending.

......BUT this could ruin its attractiveness to potential mainstream acquirers.

HUGE call... may explain the rapid appointments of three new non execs to start immediately ahead of Q1 results

Three simultaneous heavyweight non exec appointments. These non execs would have needed some persuading to jump onto the lions den that is Metro

???

Theosus

What would I do you ask?

Unequivocally put the business up for sale while I still can.

Theosus.

Trying to figure out what Metro can do under its own steam to improve its business in next 2 years given Covid and a recession.

Any ideas?