Metro Bank said today its turnaround plan would require a great deal more cost surgery than previously anticipated.
The troubled lender, which has seen its share price fall more than 98 per cent over the last five years, said it is considering measures such as automation, cutting opening times and actions to “simplify” its business model as it attempts to become more cost-efficient.
A key part of this plan will be a 20 per cent reduction in staff numbers.
While the bank initially expected its cost reduction plan, to be launched in the fourth quarter, to deliver at least £30m in savings per year, it has revised this figure to “up to £50m.”
Metro Bank expects 75 per cent of these savings to come next year.
The firm said it remained “committed to stores and the high street” and would keep seeking sites in the north of England for new branches.
More than 90 per cent of Metro Bank shareholders backed a major refinancing package on Monday, which is designed to shore up the lender’s balance sheet.
The plan, announced in October, will place 500m new shares at a price of 30p per share. This new equity is set to be issued at 8am this morning.
“The support shown from our investors through this transaction will allow Metro Bank to accelerate its growth plans, with the new capital allowing us to unlock the potential in the business and deliver sustainable profitable returns as we strive to be the number one community bank,” Daniel Frumkin, Metro Bank’s chief executive, said on Thursday.
The package includes a £325m capital raise led by existing shareholder Spaldy Investments, alongside £600m of debt refinancing. Spaldy Investments is led by Colombian billionaire Jaime Gilinski Bacal, who has a controlling stake in the bank of around 53 per cent.