Metro Bank PLC (LON:MTRO) has confirmed it is in talks to sell a loan portfolio amid concerns about its financial position in the wake of an accounting blunder.
Sky News reported on Sunday that Metro was set to announce a £500mln deal to offload a mortgage portfolio back to US hedge fund Cerberus Capital Management.
The bank has bought more than £1bn in assets from Cerberus in recent years.
READ: Metro Bank raises £375mln in less than three hours to bolster balance sheet
In a statement on Monday, Metro said: “The company regularly assesses various opportunities in the market and accordingly confirms that discussions regarding the potential sale of a loan portfolio are taking place.”
The news comes after troubling few months for Metro, which has come under pressure from low interest rates, tough competition and regulatory requirements.
Last month the challenger bank raised £375mln from the sale of new shares to investors to bolster its balance sheet and increase its loans book.
Ahead of the fundraising, a message circulating on WhatsApp groups urged customers to pull money out of their accounts and empty safe deposit boxes because the lender was facing financial difficulties and could go bankrupt.
In January, the bank admitted that that many commercial loans had been incorrectly classified in an accounting error, leading to the loss of a small number of large customers.
Metro said on Monday that there could be no certainty that an agreement regarding the loan disposal will be reached.
According to Sky News, the bank could announce a deal as soon as Wednesday when it is due to report its first-half results.