Metro Bank Faces Takeover Bid from Pollen Street Capital

London, UK – Metro Bank has been approached about a private equity-backed takeover bid by Pollen Street Capital, Sky News has learned. This development could potentially lead to the bank’s removal from the London Stock Exchange.

The high street lender was contacted in the last two weeks with an offer aimed at taking it private. Pollen Street Capital is known for its financial services investments and is a significant shareholder in Shawbrook Bank, which has, in the past, considered merging with Metro Bank.

Recently, Shawbrook has intensified efforts to explore corporate partnerships, holding discussions about a £5 billion merger with Starling Bank while preparing for a possible stock market listing.

This takeover approach comes as Metro Bank recovers from a challenging period, having narrowly avoided insolvency. In November 2023, the lender secured a £925 million rescue package involving £325 million in equity, with a significant contribution from Colombian billionaire Jaime Gilinski Bacal, who now holds nearly 53% of the bank’s shares.

Since the rescue, Metro Bank has cut jobs and sold loan assets while Chief Executive Daniel Frumkin has focused on improving the bank’s operating performance. As a result, shares in Metro Bank have more than tripled over the past year, closing at 112.2 pence on Friday, giving it a market cap of just over £750 million.

At its peak in 2018, Metro Bank had a market cap of £3.5 billion. The lender, which launched in 2010 as the first new bank in Britain in over a century, attempted to revolutionize retail banking but faced challenges as rivals pivoted to digital models.

In his comments following the bank’s first-quarter results, Frumkin stated that progress was being made in repositioning Metro Bank’s business while managing costs and enhancing net interest margins. The bank has reported growth in its corporate and commercial lending sectors.

Operating approximately 75 branches across the country, Metro Bank opened around 30,000 new personal and business accounts in the last quarter. The bank has encountered regulatory challenges, including a £10 million fine from the Financial Conduct Authority for misleading information presented to investors.

Metro Bank was founded in 2009 by Anthony Thompson and Vernon Hill, the latter of whom left the bank under contentious circumstances in 2019. Despite the ongoing takeover discussions, both Metro Bank and Pollen Street Capital declined to comment.