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Metro Bank raises around £303mln via share placing to bolster regulatory capital requirements; trading strong

The FTSE 250-listed challenger bank revealed the accelerated book-built placing after the close on Tuesday when it also issued a first-half trading update showing strong growth in underlying profits
Metro Bank branch
Metro Bank said its underlying pre-tax profit tax rose to £24.1mln in the six months to 30 June 2018, a four-fold increase from a year earlier

Metro Bank PLC (LON:MTRO) has raised around £303mln via a share placing representing approximately 10% of its issued share capital to replace liquidity used up after recent acquisitions and bolster its regulatory capital requirements.

The FTSE 250-listed challenger bank, founded in 2010, revealed the accelerated book-built placing after the close on Tuesday when it also issued a first-half trading update showing strong growth in underlying profits.

READ: Metro Bank unveils record quarterly profits after avoiding shareholder revolt

The lender said its underlying pre-tax profit tax rose to £24.1mln in the six months to 30 June 2018, a four-fold increase from the £6mln posted a year earlier, and exceeding the £20.8mln total in full-year 2017

Metro Bank highlighted continued strong deposit growth of £2.067bn, up 40% year-on-year to a total of £13.7bn, as well record lending growth of £2.393bn, up 55% year-on-year to £12.0bn  driven by strong growth in residential mortgages and commercial loans.

In a separate statement on Tuesday, the lender had launched a non-pre-emptive cash placing of up to about 8.85mln new shares at a price of 3,422p each. Metro Bank shares closed at that same price on Tuesday.

It said the proceeds of the placing will be used to support Metro Bank's growth and replace liquidity used in connection with the previously announced acquisition of a portfolio of UK mortgages completed in March.

The group added; “The proceeds will replenish and improve Metro Bank's regulatory tier 1 capital position, support its high-growth business model, allow it the flexibility to further access debt markets at the appropriate time and position the Company well for existing and potential future regulatory capital requirements.”

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