Metro Bank raises £303m in placing, posts four-fold increase in H1 profit

Metro Bank said on Wednesday that it has raised gross proceeds of around £303m in a share placing to support its growth and replace liquidity used for its acquisition of a UK mortgage book in March.

The challenger bank had announced the placing after the close on Tuesday, alongside its interim results, which revealed that underlying pre-tax profit in the six months to 30 June rose to £24.1m from £6m in the same period a year ago, exceeding the £20.8m total in full-year 2017 as residential mortgages and commercial lending grew.

The bank noted deposit growth of £2.067bn, up 40% year-on-year to £13.7bn and record lending growth of £2.39bn, up 55% year-on-year to £12bn.

Metro said the proceeds from the placing, which represents around 10% of its issued share capital, will replenish and improve its regulatory tier 1 capital position, support its high-growth business model, allow it the flexibility to further access debt markets and position the company well for existing and potential future regulatory capital requirements.

Chairman and founder Vernon Hill said: "From a standing start of literally zero, we have won over 1.4 million customer accounts from the big banks, proving British consumers and businesses are turning their backs on poor customer experience and demanding more. Our blend of service, convenience and award winning technology is not just attracting new customers in London and the South, it is helping to make us famous across the UK. The revolution goes from strength to strength."

As far as the placing is concerned, Hill said: "Once again our shareholders have demonstrated their belief in Metro Bank's long-term vision to create fans. As a fast growing, profitable bank, the capital secured will allow us to continue to meet our growth targets and continue to revolutionise banking for Britain's consumers and business alike."