Metro Bank is putting itself up for sale three years after its near-collapse, in a move that could hand a £۴۲۰m windfall to its Colombian billionaire investor, Jaime Gilinski Bacal.
Metro Bank made the rare decision to publicly announce it was open to bids on Thursday, paving the way for a wider pool of suitors. The announcement pushed the share price up by ۷% by mid-morning, valuing the bank at about £۱.۳bn.
If successful, the sale would allow Gilinski Bacal a chance to sell out of the bank he helped save from near-failure in late ۲۰۲۳.
The ۶۸-year-old banking tycoon, who took a seat on Metro’s board after securing a ۵۳% stake three years ago, has already seen a sixfold increase in the value of his shares, which he bought for just ۳۰p each as part of a wider rescue deal. That means that at Thursday’s ۱۹۰p share price, his British Virgin Island-based vehicle Spaldy Investments, could cash out with a £۴۲۷m windfall.
It would mark the latest turnaround success for the billionaire, who made his fortune snapping up assets of struggling lenders on the cheap, before overhauling their operations and selling them on for a big profit. Gilinski Bacal is one of the wealthiest people in Latin America, worth about $۱۶.۹bn (£۱۲.۷bn), according to Forbes.
Metro Bank has been focused on a turnaround plan – which has involved lending more heavily to businesses and people with more erratic incomes – since it was forced into the £۹۲۵m rescue deal in ۲۰۲۳.
Metro was the first high street bank to open in the UK in more than ۱۰۰ years when it was launched by another billionaire, the US businessman Vernon Hill, in ۲۰۱۰. It attracted a wave of customers, and offered dog-friendly branches with seven-day openings.
However, it struggled after a major accounting blunder in ۲۰۱۹ that prompted investors to dump their shares and fearful customers to pull their cash. It led to the resignation of top executives, as well as the then chair, Hill, who was well-known for having his yorkshire terrier Sir Duffy (and later Sir Duffy II) in tow.
Metro’s shares took another dive in ۲۰۲۳. That year, it emerged that the bank would need more cash from investors, having failed to convince regulators that it could be trusted to assess its own risks.
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The lender finally secured a rescue, which was brokered in part by UK regulators at the Bank of England, in ۲۰۲۳. It has since embarked on the turnaround plan, which has increased its profits but came at a cost for staff and customers. Metro’s chief executive, Daniel Frumkin, slashed more than ۱,۰۰۰ jobs in spring ۲۰۲۴ and decided to close branches on Sundays.
The bank said on Thursday that a sale was just one of the options on the table and that it would still be able to go it alone if no suitable bidder came through.
Metro’s board “unanimously believes that evaluating potential interest in the company” through a potential sale “will maximise the value creation opportunities available to shareholders and deliver benefits for all stakeholders”, the bank said.
