an accounting scandal involving misreported loans, in 2019. As its founder Vernon Hill, and its then-CEO Craig Donaldson, were forced to step down within a short period of two months, Metro Bank saw its shares plunge to a record low.
However, after many years of struggle, the challenger bank’s shares rose from 103p to 133p earlier this month, following reports of a possible takeover by US private equity firm Carlyle Group. The new offered some hope for Metro Bank shareholders, who have been facing a torrid three-and-a-half years, since January 2019, when its share price plummeted by nearly 40 per cent, wiping £800 million off the value of the company. Their optimism was short-lived, as Carlyle announced that it had ended its interest in buyer the British firm late-last week. The American said it had agreed with Metro Bank “to terminate discussions regarding a possible offer”, an announcement which saw the latter’s shares fall by 18 per cent to 109p in mid-morning trading on Thursday (18 Nov).
According to estimates, the London-based firm is expected to make losses before tax and interest of more than £300 million (US$ 403.3 million) over the next years. Accordingly, some experts were of the view that Carlyle’s interest in the company may have been based on based on potential interest rate hikes in the UK. Banks benefit from such increases by raining lending costs for borrowers while paying out similar amounts to savers.
