Metro Bank launches formal sale process after turnaround and cost cuts

Board opens a formal sale process

Metro Bank's board has decided to test interest in the bank through a formal sale process, announced to the London Stock Exchange on Thursday, 12 November. The step sits inside a strategic review of options for growth that the board is carrying out. The bank will keep running its standalone plan while the process goes ahead. The board said that combining the two paths would maximise value for shareholders and benefit all stakeholders. Any talks with third parties interested in making an offer will take place inside this formal process, which is designed to keep those conversations confidential.

Terms of the process

The UK takeover regulator has granted a dispensation from parts of the Takeover Code. Under it, interested parties do not have to be identified publicly, and the 28-day deadline does not apply to them. Participants must sign a confidentiality and non-compete agreement with Metro Bank before receiving information about the business and being invited to submit proposals. Morgan Stanley International has been appointed lead financial adviser, and parties interested in a possible transaction are asked to contact the bank through Morgan Stanley. The bank has also warned that there is no certainty any offer will be made.

A turnaround and a third redundancy round

The bank has gone through a restructuring period in which it launched a series of redundancy rounds and cost-cutting measures. In January it launched its third redundancy round in three years, as part of efforts to simplify the lender. Since 2023 Metro Bank has shifted its strategy away from mainstream lending toward what it describes as an underserved market. It operates 78 branches across the UK. In August it reported pre-tax profits up 41% to £61 million for the six months to 30 June, its most profitable half-year in its history.

The bank's position

Metro Bank says it is now well placed to weigh a wider set of strategic options for its next phase of growth.

“The significant progress made by Metro Bank means it is now well-positioned to consider a broader range of strategic opportunities for its next phase of growth.”

The bank says it is not in active discussions with any potential bidder and had received no proposal at the date of the announcement. It also says there is no certainty that an offer will be made. If no offer emerges, it will keep executing its strategy and meeting its forecasts.