Metro Bank has raised £375m from shareholders in a bid to quash rumours about its financial health.
The bank exceeded its original £350m target, due to strong demand.
The challenger bank offered shares at 500p each on Thursday evening, a 36 per cent discount to the stock’s closing price on Thursday. Shares jumped 22 per cent when markets opened on Friday to 646p.
Back in January, Metro Bank shares were £22 each, but Metro revealed a major accounting error which spooked investors. The mistake involved miscategorising £900m worth of commercial and buy-to-let property loans as being lower risk than they actually were. As a result, it’s first quarter results were disappointing and included a 50 per cent drop in profits.
Customers had been withdrawing cash from the bank for the past week following fears about its financial position.
Metro bank chairman and founder Vernon Hill says: “Although we’ve faced challenges in the past few months, we remain fully focused on providing the outstanding service and convenience that our customers expect of us. This growth capital will enable us to continue to expand the business and implement our strategic initiatives.”
A statement from the Prudential Regulation Authority says: “Metro Bank is profitable and continues to have adequate capital and liquidity to serve its current customer base. It has raised additional capital in order to fund future growth.”