Metro Bank begins talks over £3bn mortgage book sale - report

Metro Bank has reportedly begun talks about the sale of a £3bn chunk of its mortgage book as part of an increasingly urgent attempt to shore up its balance sheet.

According to Sky News, advisers to Metro Bank - whose shares tumbled on Thursday as it confirmed it was looking to potentially raise new capital - have this week contacted a string of potential buyers of the assets.

City sources told Sky that those sounded out by the challenger bank included Lloyds Banking Group and NatWest Group. One insider said the sale process for the Metro Bank mortgages was designed to form part of a wider capital-raising exercise.

This would include raising more than £100m of new equity and refinancing a £350m debt instrument which falls due in 12 months’ time.

Sky said it was unclear whether Lloyds and NatWest were interested in acquiring the loan book or what price they would be prepared to pay.