Metro Bank has raised £126m to support new branch openings as it eyes a flotation on the London Stock Exchange in 2014.
The bank, which launched in July 2010, has more than 80,000 personal and business accounts and 12 branches in the Greater London area.
But expansion in other areas has been more difficult for the bank, which had provided just 100 mortgages to customers at the end of 2011.
By the end of 2012, it expects to have 700 employees and to have opened a further seven branches – in Brighton, Reading, Hemel Hempstead, Romford, Staines and Epsom. The plan is to grow to 200 branches in the Greater London area by 2020.
This latest round of capital raising is the third since the bank launched.