Colombian billionaire Jaime Gilinsky Bacal is Metro's largest shareholder. Photo: Grupo Gilinski
The deal gives Gilinski's fund a 53% stake in Metro and effective control of the bank. His daughter, Dorita Gilinsky, sits on Metro's board of directors and was present at yesterday's meeting.
The rest of the funding comes from other shareholders and a £600 million credit line.
As for what's expected sales of the mortgage book, Metro Chief Executive Dan Frumkin said it will help the bank move into other areas of lending.
He said: “The mortgages we have on our balance sheet are of high quality but are not necessarily what we want to see on our balance sheet as we move forward. It would probably be better to place them on the balance sheet of another institution.”
Metro's mortgage portfolio primarily consists of owner-occupied housing loans, with approximately one in three loans being buy-to-rent mortgages.
The plan mirrors a similar deal in 2020, when Metro sold around £3 billion of mortgages to Natwest.
The deal, known internally as Project Eden, saw Metro mortgage holders being taken over by Natwest on completion of the deal.
Shares in the bank were trading at around 40p on Monday, down roughly. by two-thirds since the start of the year.
Metro was once the darling of the challenger bank movement under former chairman Vernon Hill, but collapsed due to an accounting error that prompted deposit holders to flee in 2019. < /p>
Metro employs 4,000 people across 76 UK branches.
The bank has been considering options for its mortgage portfolio and balance sheet since the Prudential Regulation Authority (PRA) delayed permission to use its own internal models to calculate its risks.
Larger banks are often allowed to use their own internal models, which leads to lower fees for the types of loans that banks issue.
Metro was forced to rely on more onerous PRA models, further increasing pressure on its balance sheet.
Metro and Barclays declined to comment.
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