Member Info for zccax77

With most of these internet only banks people do not trust them enough to use them as their main bank account mainly to their lack of physical presence, hence their tiny revenues. They are only used for fx transactions.

The issue is that the market considers metro a legacy bank and hence without profit they won't fund their future MREL* needs and thus MTRO cannot grow its balance sheet anymore, hence the need to sell the business.

*At a decent coupon.

That would be a good strategy if they were profitable.

The branches may cost money but Metro spends £0 on marketing whilst any internet business spends a fortune on google adsense marketing costs.

Look at this clown comment on the article, when I look at their balance sheet they only have £197m of freehold property and investments on page 127 (https://www.metrobankonline.co.uk/globalassets/documents/investor_documents/annual-report-2018.pdf), not sure where he got the £1bn from:

Picking up £1,700m of net assets when m/cap is less than £400m looks superficially very cheap. However, around £1,000m of the £1,700m is the branch network and capitalised software. So you have to believe that the branches have a future.

Quite how the carrying value of the branches, without significant write downs, can be justified in their annual results when the market is currently screaming that the branches are not worth that much will be intriguing to understand. It is not just a technical issue as write downs erode regulatory capital.

The FT have been doing negative "sponsored" articles all year.

I would ignore them. I think they are Algo driven.

Matlot , agree this info is 3-4 months old and have resulted in HSBC having 35bn of excess capacity which they are now deploying into mortgages. Buck says he owns shares in HSBA but he only read about this story this morning. He has no idea.

Ironhorse1584 did you not see the RNS with Hill's pals selling their shares below £2. Why would they then try and take private at £3?

https://ftalphaville.ft.com/2019/12/13/1576234905000/Another-bank-capital-blunder/

Opening new stores are a bad idea at the moment since they increase operational leverage in the short term, thus increasing losses. Plus the market will no longer fund their balance sheet growth either through new equity issuance or mrel issuance at a reasonable price. Best they just hunker down and focus on increasing profitability.

lol

Cud do I didn’t think you had a job, what do you do?

Umeed this is not a hiccup this is a structural shift in the market.

To close such a large short position is it not easy. Cohen is providing the liquidity. Previously this liquidity was not available. Just because the sp might be low does not mean the shorts can close without adequate liquidity

Yes stores will now be 5,000 sqf instead of 13,000 sqf.

Maybe Cohen has fallen out with VH.

LOL

Additionally metro never lent out the FLS money, instead they brought RMBS’s with it. These are highly liquid, so if the funding needs to be paid back they will just sell those securities.

Leisurely have a look at mtros balance sheet and you will see they have enough liquidity to manage the FLS deposit. 75bps is around the cost of mtros deposit book anyway, so if they can grow their deposits by 20% in the next year then they can repay that funding.