Metro Bank drops on announcement of £350m share sale

Metro Bank's shares dived late on Tuesday after the challenger bank announced plans to raise £350m through a new share sale to fix the shortfall on its balance sheet.

The lender said it had entered into a “standby underwrite agreement” with RBC Capital Markets, Jefferies and KBW for its equity raise, expected to be launched in the first half of 2019 after consultation with shareholders.

The business' shares have suffered this year after an internal blunder led to the incorrect risk classification of millions of pounds of commercial property loans and loans to commercial buy-to-let operators, with Metro Bank shares plummeting to record lows in the aftermath.

The bank initially claimed to have spotted the error itself, though it later emerged that a UK regulator had flagged the mistake.

Wednesday will see the release of Metro Bank's full-year earnings report, which is expected to show profits surging from £15.9m to £39m according to consensus estimates collected by Reuters, as well as the first chance for the media to quiz the business' leadership on the recent gaffe.

Metro Bank's shares were down 10.43% at 1,375.00p at 1615 GMT