Float looms for growing Metro

UPSTART lender Metro Bank wants to open seven new branches by the end of this year after completing a £126m capital raising.

The high street bank also said it aims to float within two years as its investors consider a lucrative exit.

Hedge fund Moore Capital and billionaire investor Steve Cohen are believed to have taken stakes in Metro in the recent fundraising, which has seen co-founder Vernon Hill cut his stake of around a fifth.

In total the bank raised £126m from new investors and existing backers, which include asset managers Fidelity and Wellington Capital, property entrepreneurs the Reuben brothers and New York property developer Richard LeFrak.

Craig Donaldson, chief executive, said Metro would launch an initial public offering but “it won’t be before 2014”.

In the meantime the bank is continuing with plans to grow to 200 branches in the Greater London area by 2020. By the end of this year it aims to have 700 staff and to have opened further stores in towns including Brighton, Reading, Hemel Hempstead, Romford, Staines and Epsom.

“The capital raise will further strengthen our growth plans and build on our firm foundation,” Donaldson said.

“The demand for this share placement reflects Metro Bank’s unprecedented success in the market.

“Londoners are flocking to us to open accounts and we’ve been blown away by local reaction to our style of community banking. In particular, our strong lending book is a direct result of our model of local bankers making local loans.”

Metro was Britain’s first new high-street bank in a century when it launched in 2010. Today it has more than 80,000 accounts.

A series of other banks have opened since the onset of the crisis, including Aldermore and Haymarket Financial, while Marks & Spencer plans to open banks at 50 branches over the next two years.