Monday 22 July 2019 7:32 am

Metro Bank confirms £500m Cerberus loan sale talks

Metro Bank shares rose more than three per cent this morning as the lender confirmed it is in talks to offload a portfolio of mortgages to a US hedge fund. 

The bank is reportedly preparing to sell £523m of buy-to-let mortgages back to Cerberus in order to strengthen its loanbook, after buying the mortgages off the hedge fund in February 2018.

Read more: Metro Bank in talks to sell £500m of loans back to US hedge fund

Metro said there was “no certainty” that a deal would go ahead but confirmed that it is in discussions regarding a potential sale.

In a statement this morning the bank said: “The company regularly assesses various opportunities in the market and accordingly confirms that discussions regarding the potential sale of a loan portfolio are taking place.

“There can be no certainty at this stage that an agreement will be reached. 

“A further announcement will be made if and when appropriate”. 

Sky News, which first reported the deal, said a sale could be announced as soon as Wednesday when Metro publishes half-year results. 

Read more: Metro Bank shares fall further amid boardroom bust up

Craig Donaldson, Metro’s chief executive, told the Financial Times in May that the bank would consider selling loans to cope with fall out from an accounting error. 

Earlier this year Metro revealed an error that classified loans as less risky than they were, sending the lender’s shares down more than 70 per cent since January.