Metro Bank IPO: Group ‘quietly confident’ ahead of float
UK challenger Metro Bank, which is gearing up for a stock market float, is ‘quietly confident’ ahead of its unconventional initial public offering (IPO), City A.M. has reported. The news comes after the company slashed the price and size of its private capital placement amid a slump for banking stocks across Europe.
Metro Bank will have an ‘introduction to market’ on Monday, meaning that it will float without a public sale. The lender’s shares are expected to become available to retail investors a week from today, when the company is admitted to trading on the London Stock Exchange.
“We’re quietly confident,” a source close to the bank told City A.M. yesterday. “The volatility in the market has been there since January, nothing has changed in recent weeks. Our investors are in it for the long term.”
The comments come after Metro Bank cut its IPO price from £24 to £20 per share last month and trimmed the amount it aims to raise from £500 million to £400 million. The listing is now set to value the challenger at £1.6 billion, twice its book value, down from the £1.9 billion Metro Bank had hoped for. TSB, the challenger bank carved out from Lloyds Banking Group (LON:LLOY) and later sold to Spain’s Sabadell, was valued at £1.7 billion, around one time its book value.
City A.M. notes that Metro Bank has never managed to turn a profit posting an underlying loss after tax in the fourth quarter of 2015 of £10.1 million, down from a loss of £10.7 million in the previous quarter.
The Metro Bank float will come after fellow challenger bank Clydesdale endured a rocky launch on the LSE, with the flotation delayed by one day in response to a request for additional financial information by a credit ratings agency.