Metro Bank is launching a fresh cost-cutting drive after the embattled lender clinched a £925 mn rescue package from investors over the weekend. The high street lender said it was aiming to slash about £30 mn of costs a year from 2025 as part of the deal, which avoided a potential breakup or takeover by a rival UK bank.
It was not immediately clear whether those cuts will result in job losses among its 4,000 employees, including those that work across its 76 branches. Metro, which became the UK’s first new high street lender in 150 years when it burst on to the scene in 2010, also confirmed overnight that customers had started to pull their money out in recent days amid worries over its financial health.
However, the lender said it still expected current account balances to grow, “notwithstanding the recent increase in deposit outflow rates in advance of the announcement of the capital package.”
In total, the rescue deal involves £600 mn of debt refinancing, on top of a £325 mn capital raise, which includes £150 mn of new shares sold at 30p a share. It is also planning to sell off about 40% – or £3bn – of its mortgages to reduce the risks on its balance sheet.