Metro Bank seeks bids within weeks for £3bn mortgage book

Business

Metro Bank has set a quickfire timetable for rivals to snap up a substantial chunk of its mortgage book.

Sky News understands that Metro Bank wants bidders to submit offers at the beginning of next month, with Barclays, Lloyds Banking Group and NatWest Group all having an indicated an interest.

News of the timetable comes days after the high street bank said it had secured a £925m refinancing package, which involves the Colombian billionaire Jaime Gilinski Bacal becoming its majority shareholder.

Metro Bank had become the subject of questions about its survival after Sky News revealed this month that it had drafted in City advisers to raise hundreds of millions of pounds of new capital.

In total, it is raising about £150m of new equity and £175m of new debt, while it is also refinancing £600m of existing borrowings.

Analysts have questioned whether the mortgage book sale will have implications from a fair value accounting perspective, but Daniel Frumkin, Metro Bank’s chief executive, suggested last week that a sale would be wrapped up before the end of the year.

Metro Bank, which has about 2.7 million customers, became the first new lender to open on Britain’s high streets in over 100 years when it launched in 2010.

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It offers current accounts, business accounts, personal loans and insurance products, and employs about 4,000 people, operating from about 75 branches across the country.

Metro Bank has been forced to sell assets in the past, announcing a deal in December 2020 to sell a portfolio of owner-occupied residential mortgages to NatWest Group for up to £3.1bn.

Metro Bank declined to comment on the mortgage book bid deadline.

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