© Reuters.
In a recent move to address regulatory concerns about its financial stability, Metro Bank has secured £325 million ($395 million) in new capital. The bank, which was established by Vernon Hill in 2010, managed to raise this amount through negotiations that followed regulatory penalties and high-profile exits due to an accounting error.
The accounting error had underestimated the necessary mortgage capital, leading to a rejection of Metro’s internal method for calculating necessary mortgage capital reserves by regulators. This rejection triggered a 60% share price plummet last month.
To secure the new capital, Metro raised £150 million from current shareholders and £175 million from bondholders. The largest chunk of the equity capital came from the bank’s largest shareholder, Jaime Gilinski Bacal.
Metro Bank, which boasts 2.8 million customers and assets worth £22 billion, is also considering the sale of £3 billion worth of mortgages as part of its strategy to bolster its financial stability.
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