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City AM coverage, just in.
https://www.cityam.com/colombian-billionaire-jaime-gilinski-beefs-up-metro-bank-stake/
https://uk.mobile.reuters.com/article/amp/idUKR1N2BC02H
Should be imminent for Metro if they're proactive.
So in answar to your question:
What seems to be happening here is pre-positioning for the short relief rally that should come with a re-opening.
With the aim to sell off the rally just before a second wave of covid starts to emerge
NOVE.
You sound a solid old school type investor.
Markets nowadays care not about fundamentals, technicals, macro-economy etc..
They are purely driven by this question: 'What strategy will make money in the next few days or weeks'.
The long term is immaterial as a significant numver of investors dont intend to hold for long, the aim is to buy and make a quick exit before it blows.
1. Long and expensive store leases with no break clauses
2. No product diversification, betting it all on mortgages
3. Only 75+ branches after ten years was too slow a roll-out to gain scale. And now recession has hit.
4. Accounting error on risk categorisation
5. Didnt come clean with transparency, regulators had to reveal it was them who found the error. This created a loss of confidence.
6. Undersubscribed 7.5% MREL should not have been pulled, they could have had a second round to top-up later. Or requested time extension.
7. Issuing MREL at 9.5% was catastrophic. Wiping out all cost saving progress and profitability. Now spending 8.3% of annual revenues paying MREL interest on idle capital, shocking
8. Removing VH and CD will turn out to be a huge mistake. The essence of the original excitment and investment case on Metro left with them
9. Denying CD the chance to right the ship was a mistake. A new CEO will always kitchen sink and make big changes. In this case, badly received by the market, and possibly alienating its core base of target investors
10. CEO reward structure does not reward a T/O at all, which is poor given turn of events re: covid
11. Asking Chief Risk officer to leave and appearing to brief against him wasnt good PR at all
12. Ommitting to report basics like CET 1, Provisioning and NIM in the face of worst UK recession in possibly 300 years was badly received by market
13. Not taking the chance at Q1 to hint at or launch a new strategic review in light of the unforseen developments of such magnitude was a missed opportunity
Anyone have any others to add?
Reassuring thing here is that Metro will most likely have been singled out for very close supervision by regulators going by the PRA's prior comments re: them trying to right the Metro ship but lacking a CEO and Chairman at the time.
One wrong development out of place and Metro's destiny may no longer be the company's to decide.
Bigsmoke.
I believe Theosus meant its not what was promised to investors in the original Metro investment case, not necessarily by the current BoD.
The market cap hit £3500m on that expectation, but investors lost faith as the dream faded. Hence £140m market cap today.
Bigsmoke.
Metro listed on the FTSE with a promise of fast growth, transforming retail banking in UK and making shed loads of cash for investors
All broken promises at this point.
RNS was reasduring though.
BUT the business is indeed stagnant and out of ideas. Time to sell it.
Theosus, exactly.
And with that margin squeeze and high fixed cost base, Metro will have to drop its deposit interest rates to manage funding costs.
Which in turn, reduces inflow of deposits or even lose deposits to rivals. Further reducing its ability to lend to its customers.
Management need to have solutions ready tomorrow!
Theosus.
Very valid point, and it should accelerate an outcome here.
Because Metro doesnt have the funds to make much in way of new loans, even if 100% guaranteed by govt.
In fact it was aiming to shrink it's loan book this year pre-covid for that reason. Cant see it jumping to make 0% loans
Cudd.
Cant see regulators allowing a take private of Metro unless its extremely well funded (which is unlikely).
Eyes are on the Big 4 banks swimming in UK ringfenced cash and cancelled dividends.
Zccax.
More likely seen as a distressed sale now, so management have cover to be flexible on price with regards to book value.
Analysts were not convinced by the standalone turnaround story pre-covid, let alone now.
Time for Metro to be humble, it is Darwinian out there. Only the strongest will thrive.