The under-fire Metro Bank Plc has completed its much-awaited share placement at a discounted rate but raised capital to the tune of £375 million against the planned £350 million and posted a thumping response from the shareholders.
After a reporting error exposed in early 2019, it has to prop up its capital levels to get back to lending cycle, but earlier the bank was planning to raise £350 mn only.
The lender got a good compliment from the Bank of England as it said, "Metro Bank is profitable and have adequate money and liquidity position to serve their current client base."
But lender's senior management is under enormous pressure, Vernon Hill and some other on the board of the lender are witnessing increasing calls to step down from their designated positions before the AGM, which is scheduled on Tuesday, next week. One of the dominant institutional investors Legal & General said that they are going vote against Mr Hill and others in the upcoming annual shareholder meeting.
Metro Bank has lost its market value by more than 1.5 billion pounds after notifying in January that it had miss-calculated the risk of its loan book by approximately £1 bn, hitting the threshold limit of capital levels decided by the regulator.
Shares of the Metro Bank Plc were buzzing on the London Stock Exchange, at the time of writing. It has surged around 26 per cent in Friday’s session.
Share Price Performance
5-days Daily Price Chart (as on May 17), after the market closed. (Source: Thomson Reuters)
At the closing (as on May 17, 2019), shares of MTRO ended 26.18 per cent above the previous day closing price at GBX 669. The stock has traded around 33.8 per cent above the price at which share placement took place on Thursday (at GBX 500/per share). However, still it has long way to go as in the past one year, the stock has touched a 52w high of GBX 3,512 and a 52w low of GBX 474.50 respectively.
From the volume standpoint, today’s volume traded on the London Stock Exchange was around 4.8 times of 3-months average volume traded on the London Stock Exchange.
On the fundamental front, the company was trading at a trailing twelve months P/E multiple of 17.5x as compared to the industry median of 9.2x. The company’s stock beta was 1.89, reflecting higher volatility as compared to the benchmark index. Total outstanding market capitalisation was around £659.54 million.
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