Challenger Metro Bank revealed plans to raise almost £300m from the stock market after unveiling its fourth successive quarter in the black.
In an after the market announcement, Metro said customer deposits had risen 49 per cent year-on-year to £9.8bn and underlying profit doubled in its second quarter to £4m.
In June, Metro snapped up a near-£600m portfolio of loans from Cerberus – the US distressed debt fund that has hoovered up rafts of toxic mortgages from the likes of failed lender Northern Rock.
Today the challenger said it wants to issue just over 8m shares, or 9.9 per cent of its current share capital, at a price of £34.65 each. This will raise approximately £278m.
Metro's founder and chairman Vernon Hill has agreed to stump up £10m to buy some of the new shares.
The proceeds from the share placing will be used "to support Metro Bank's growth and replace liquidity" in connection with the Cerberus purchase.
Launched in 2010, Metro Bank raised £400m in March 2016 when it debuted on the London Stock Exchange before turning its first quarterly profit in September 2016. Underlying profit before tax was £0.6m and £1.5m in the final two quarters of last year, although the lender made a full-year loss.
“Almost seven years in and the Metro Bank story just gets better and better," said Hill.
The Metro Bank model is revolutionising British banking and 2017 is shaping up to be a fantastic year for us.