Metro Bank shares claw back losses after rout

Shares in Metro Bank fought back yesterday after a sharp sell-off, as details emerged of a possible cash injection by investors.

The troubled lender’s stock climbed 20.7 per cent, or 7.75p, to 45.25p, after a 25.7 per cent decline the day before when reports suggested it was seeking hundreds of millions of pounds to shore up its finances.

Yesterday, following a report in the Financial Times, it emerged that a group of the lender’s bondholders had offered to inject £600m – but that the bank has yet to accept the offer.

Separately, it was reported that Metro Bank has now kicked off a sale of a £3billion chunk of its mortgage book.

But despite yesterday’s bounce, the shares closed more than 20 per cent down on the week.

The Treasury was reported to be monitoring the situation and in contact with the Bank of England.

Metro Bank has struggled in recent years, including when it disclosed a major accounting error in 2019.

Analysts last night remained sceptical about its prospects.

Gary Greenwood of Shore Capital said its valuation still meant that ‘the market is still telling us it is a busted flush’. He said Metro was ‘stuck very much between a rock and a hard place’.

An external capital raise would be ‘prohibitively expensive at present’ while an asset sale ‘merely kicks the can down the road and doesn’t address the fundamental issue that the bank is over-costed and lacks scale’, he added.