Recently, Pollen Street made an informal offer to Metro Bank, though the discussions are currently in their early stages and no deal is certain. This possibility of a private acquisition could follow Metro Bank’s challenging period as a publicly listed company.
Details on Potential Takeover
As a challenger bank, Metro has faced regulatory hurdles, including a significant issue in 2019 where it admitted misclassifying commercial loans and lacked sufficient capital. The Financial Conduct Authority required the bank to prepare a £350 million share issue, leading to an investigation by the Prudential Regulation Authority.
In 2023, Metro Bank had to raise emergency capital after its shares dropped more than 50% following revelations that regulators did not approve changes to capital requirements on its mortgage book. Since then, the bank has shifted focus from retail banking towards lending to businesses and SMEs. While its share price has tripled since reaching a low point during restructuring, it remains well below its 2019 peak.
A takeover by Pollen Street Capital could signal another stock market setback in London, where about a quarter of major listings from 2021 were delisted and the remaining companies lost £10 billion in value. The initiative might also lead to potential deals between Metro Bank and Shawbrook.
The proposed takeover reflects the challenges faced by challenger banks in the UK market, as seen with other recent acquisitions such as Nationwide Building Society’s purchase of Virgin Money for £2.9 billion in 2024 and reports that Shawbrook, another Pollen Street investment, is exploring a tie-up with Starling Bank.