Metro Bank trading 'temporarily halted' after shares plunge more than 25 per cent

Shares tumbled by as much as a third soon after market opening on Thursday.

It followed reports that the bank is in talks with investors to raise around £250million in equity funding and £350million in debt.

A potential £100million share sale is also said to be among the plans being considered.

Metro Bank is due to refinance around £350million of debt by October 2025.

The firm said it was looking at a range of options, including a combination of equity raise and debt, as well as possible asset sales.

However, Metro Bank stressed “no decision has been made on whether to proceed with any of these options”.

Metro Bank said: “The company continues to consider how best to enhance its capital resources.”

City regulators are reportedly in talks with the bank following the drop in its share price.

The Bank of England’s Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) declined to comment.

Metro Bank has 76 branches in the UK, known as "stores". It is one of the UK's top 10 banks with around 2.7 million customers.

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Gary Greenwood, an equity research analyst for Shore Capital Markets, suggested that the business could struggle to find backers for a potential fundraise.

He said: “Metro Bank has been struggling for a number of years to establish itself as a profitable and self-sustaining bank.

“Supporting a further capital raise for this struggling bank would be akin to throwing good money after bad, in our view, as it has already had enough time and opportunity to sort itself out and has been unable to do so.”

The bank plans to expand its store network in the North of England, aiming to open 11 more branches by the end of 2025.

Chief executive Daniel Frumkin said that “whilst competitors continue to shrink their branch numbers and reduce hours, we are continuing to see the benefits of being rooted in the communities we serve”.