Metro Bank revives £3 billion mortgage sale after bailout

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The size of the portfolio had yet to be finalised, with one adviser suggesting it could be closer to £4 billion than £3 billion

Metro Bank is reviving plans to offload a multibillion pound mortgage months after an investor bailout rescued it from the brink of collapse.

According to Sky News, the London-listed high street lender is working with Morgan Stanley on a process to raise capital from the sale of the mortgages.

City sources said the size of the portfolio had yet to be finalised, with one adviser suggesting it could be closer to £4 billion than £3 billion.

Indicative offers are said to have been due for the portfolio several days ago.

The revival of the process comes four months after Metro Bank said it was cutting 1,000 jobs and ending its seven-day branch opening model in an effort to exert tighter control of costs.

Last October, the firm secured a £925 million lifeline which saw it raise around £150 million of new equity and £175 million of new debt, while refinancing £600 million of existing borrowings.

The rescue package saw the Colombian billionaire Jaime Gilinski Bacal becoming its majority shareholder.

Metro Bank had been in exclusive negotiations to sell a £3 billion mortgage book to Barclays but ended the discussions in December after failing to agree a price for the assets.

Banking analysts believe that Metro Bank is likely to need to raise further capital in the coming months as its balance sheet comes under further strain.

Metro Bank, which has nearly 2.7 million customers, became the first new lender to open on Britain’s high streets in more than 100 years when it launched in 2010.

It offers current accounts, business accounts, personal loans and insurance products, and employs thousands of people, operating from over 70 branches across the country.

The crisis which engulfed it last autumn triggered concerns of a run on its deposit base, but withdrawals rapidly returned to normal levels in the aftermath of the recapitalisation agreement.

Suitors for its mortgage portfolio were unclear on Monday, but are expected to include big British retail banks.

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