Metro Bank has admitted savers were pulling money out of their accounts amid fears over its future before an emergency fundraising last month.
In October, the troubled lender secured a £925million lifeline that included the sale of £150million of new shares as well as £175million of fresh debt on top of a £600million refinancing of existing loans.
Metro said yesterday it saw ‘an increase in deposit outflow rates’ ahead of the deal as customers rushed to withdraw their cash.
It said withdrawals have now ‘returned to more normal ranges’.
Withdrawals: Metro Bank said it saw ‘an increase in deposit outflow rates’ ahead of last month’s fundraising deal as customers rushed to withdraw their cash
The firm also revealed that deposits for the three months to September totalled £15.6billion, down 5 per cent year-on-year, while the size of its loan book dipped 2 per cent to £12.5billion.
Metro shares increased 1.1 per cent, or 0.45p, to 43p.
At the time of the surge in withdrawals, Metro had posted profits for three quarters in a row, but its capital levels – the amount of easily accessible cash held by the bank – were only just above legal requirements and posed a threat to its lending ability.
In September, it was refused permission by the Bank of England’s Prudential Regulatory Authority to evaluate mortgage risks using its internal models, which large banks can use to enhance profitability.
Metro has also struggled to reduce costs due to its network of 76 branches across the UK.
The October bailout handed effective control to its largest shareholder, Colombian billionaire Jaime Gilinski Bacal, who provided the bank with a £102million cash injection and saw his stake balloon from just over 9 per cent to 53 per cent.
At the time, the bank vowed to press on with plans to open more bank branches despite agreeing to cut costs by £30million a year as a condition of the funding deal.
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