Wednesday 15 May 2019 11:48 am

Metro Bank shares continue to soar ahead of £350m capital raise announcement

Reporter at City A.M. covering banking, markets and insurance

Reporter at City A.M. covering banking, markets and insurance

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Metro Bank shares have continued to climb this morning as investor confidence grows ahead of the challenger bank’s £350m capital raise.

The embattled bank is expected to announce the results of its fundraising efforts later today after the market closes.

Read more: Metro Bank shares sink to fresh all-time lows after Whatsapp rumours

Shares have jumped more than 13 per cent to 576p this morning following reports the challenger bank will reveal a successful fundraising this evening, through a mix of existing and new investors.

The stock had plunged as low as 475p on Monday after the bank was forced to quash Whatsapp rumours of fresh financial turmoil.

Customers queued at branches in west London to withdraw money and safe deposit boxes over the weekend following warnings on social media.

The bank reassured customers it remained a “safe and secure haven” for their money and said the capital raise was “well advanced.”

Metro Bank has tapped up investors for £350m in recent months in response to a major loans blunder in January.

The lender admitted that a swathe of commercial loans had been wrongly classified and should have been among its “risk-weighted assets”, leading to the worst one-day share price fall for a British bank since the financial crisis.

The error has since sparked two regulatory probes and shares have fallen 74 per since its discovery.

A difficult start to the year for the dog-loving bank was compounded by its first quarter results.

The lender revealed it had lost some of its largest commercial customers as deposits fell 3.6 per cent and its profits halved to £4.3m.

Ahead of its AGM next week pressure has mounted on the board.

Pirc became the latest shareholder advisory group to urge investors to block the re-election of chairman Vernon Hill yesterday.

The firm shared the concerns of Glass Lewis over payments made by the bank to Hill’s wife’s architecture firm Interarch, which has for the design of its branches.

Read more: Metro Bank prepares for £350m placing next week

Another proxy adviser ISS urged shareholders to abstain on re-electing Hill and chief executive Craig Donaldson.

ISS said accountability for the loans error sat with the pair, as well as directors Steve Bernau and Gene Lockhart, but noted that regulatory probes were still ongoing.