Metro Bank plc (lon:mtro)
Metro Bank – Are RBS Or Someone Else About To Buy Them?

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Commentary History
Metro Bank plc Share Price
Grade:The Green Grade - Shares That I Think Are Oversold..
Title: Metro Bank – Are RBS Or Someone Else About To Buy Them?
Company: MTRO - Metro Bank plc
Share Price Then: 497p
Author: Ian Smith
Date: Tue 14 May 2019
Comments: Metro Bank’s problems are well known and there are now suggestions that the expected rights issue could be in the £500-£600 million range which is around the current market capitalisation.

However Metro Bank are reporting a lot of institutional support for a £350 million share issue and not talking about a larger fund raising.

Over the weekend there were rumours which caused customers to have concerns about their money and deposit boxes. Although the rumours were unfounded there have been headlines about another Northern Rock which could trigger more customers to move funds over the next few weeks.

Given these issues and RBS’s status as partially indirectly state controlled bank is a sale to RBS on the cards or under discussion as a last resort?

Clearly that is not what Metro Bank wants, not what the Government wants and probably not what the shareholders want.

The trouble is that it might be that investors are thinking no more money without management changes and the management doesn’t want to change.

If the rights issue is announced this week which is reported as being fully underwritten then business as normal can resume.

Or can it, has Metro Bank lost its credibility as a bank?

Under these circumstances the FCA/PRA etc may decide that words in ears suggesting that this is the way to go to avoid a failure, it does seem unlikely and is it even a possibility?

If you are trading Metro shares over the short term then this probably isn't an issue, but if you buy now or after the share issue with the intent of holding for a while it may be. If the buzz behind the bank has gone it could easily remain a similar size for a while and just gradually fizzle out.
Read Count/ID: 258/7059

Buy/No Buy In A Nutshell
NegativesThe impetus of being a new bank with a new image has gone and it is still not clear that the bank can be meaningfully profitable.
PositivesA valuable customer base for an existing bank.
Initial Review Price112p
Last Review Price95.28p
Last Review Date02-Sep-2020
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