As Bloomberg News reported Sunday (Oct. 8), the funding package is comprised of a £325 million capital raise, comprising £150 million ($183 million) of new equity and £175 million ($213 million) in new MREL issuance. In addition, Metro will also refinance £600 million ($732 million) of debt, the report said.
According to the report, the fundraising will be led by Spaldy Investments, Metro’s largest shareholder, which will have a 53% stake in the bank.
PYMNTS has contacted Metro Bank for comment but has not yet received a reply.
Metro had spent the last several days working to secure its financial position. According to published reports, its shares had plunged following news that it was seeking £600 million to strengthen its balance sheet.
A separate report by the Financial Times (FT) — citing sources familiar with the matter — said the regulation authority had contacted several big banks in the U.K. to see if they were interested in purchasing Metro.
Three big banks — NatWest, Santander, and Lloyds Banking Group — had been considering bids for some of Metro’s assets, sources said. Other banks had ruled out the idea of purchasing Metro outright.
The FT said JPMorgan and HSBC decided on Saturday not to bid. Sources said the two banks were uneasy about the extra capital they’d need to put into Metro.
HSBC played a role in the aftermath of another banking crisis this year when it purchased the U.K. operations of Silicon Valley Bank after that bank’s collapse.
“This acquisition makes excellent strategic sense for our business in the U.K.,” Noel Quinn, HSBC Group CEO, said in a news release. “It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the U.K. and internationally.”
Earlier this year, the U.K. launched a £1 billion investment fund, designed to bolster the country’s standing as a FinTech hub.
The fund, called the Fintech Growth Fund, aims to support growth-stage financial technology companies until they can go public.
“This move comes in response to criticisms that the U.K. has been posing barriers to its FinTech entrepreneurs and forcing them to consider listings overseas,” PYMNTS wrote at the time.
As that report noted, the fund will invest in companies that include consumer-focused challenger banks, payments tech groups, and financial infrastructure providers.
Image by: Metro Bank