OSB Group PLC (LSE:OSB) and Metro Bank Holdings PLC (LSE:MTRO) have both been reclassified as "transfer firms" by the Bank of England from 1 January 2026, significantly easing future capital requirements.
As transfer firms, their minimum requirement for own funds and eligible liabilities (MREL) will now be defined by existing regulatory capital requirements — Pillar 1 and Pillar 2A — rather than needing to issue additional “bail-inable” debt.
Metro Bank said its MREL will now be set at 13.7% including buffers, and 9.2% excluding them.
“This is a positive development which affords us more capital flexibility,” said chief executive Daniel Frumkin, “enhancing our ability to lend into the UK economy and creating further value for our shareholders.”
OSB Group also welcomed the reclassification and said it will update the market on the implications for its capital and funding strategy when it reports full-year results on 5 March 2026.
Analysts at KBW said OSB will no longer need to issue £600 million of MREL debt previously assumed in their forecasts. They estimate this change could boost OSB’s forecast earnings by up to 10% by FY29.
Shares in OSB rose 2.4% to 629.5p, while Metro, which had expressed confidence in the reclassification, was little moved.