Nov 4, 2021
U.K.’s Metro Bank Draws Takeover Interest From Carlyle
, Bloomberg News
(Bloomberg) --
British lender Metro Bank Plc is attracting takeover interest from Carlyle Group Inc., according to people familiar with the matter.
The buyout firm has been studying a potential acquisition of Metro Bank, the people said, asking not to be identified because the discussions are private. Shares of Metro Bank have fallen 25% in London trading this year, giving it a market value of about 180 million pounds ($245 million).
Metro Bank was the first new retail bank to open its doors in the U.K. in more than a century in 2010 and has become known for its branch network, including in expensive locations like the King’s Road in Chelsea. It emerged to challenge incumbents such as Barclays Plc and Lloyds Banking Group Plc, whose reputations in the country had been tarnished by the 2008 global financial crisis.
But Metro Bank’s image took a hit of its own in 2019, when U.K. regulators the Financial Conduct Authority and Prudential Regulation Authority began an ongoing investigation into how it misclassified certain assets. The lender, which had a market value of about 3.6 billion pounds at the peak, has seen its shares slide since then.
Deliberations are ongoing, and there’s no certainty they will lead to a formal offer, the people said. A representative for Carlyle declined to comment, while a spokesperson for Metro Bank couldn’t immediately provide comment.
In a third-quarter trading update last month, Metro Bank’s Chief Executive Officer Daniel Frumkin said the business had improved its lending mix and was seeing signs of a “gradual return to normality.”
Carlyle’s potential move is another sign that a long-awaited consolidation among smaller U.K. lenders is gaining momentum.
Spain’s Banco Sabadell SA said in October that it had rejected a bid from the U.K.’s Co-operative Bank Holdings Ltd. to gain control of rival lender TSB Bank Plc. If a deal had been struck, the tie-up would have created a lender with more than 8 million customers for mortgages, current accounts, credit cards and other savings products.
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