Carlyle Group has approached the British lender Metro Bank about a possible takeover.
Metro Bank has engaged with the U.S. private equity firm but there is no certainty an offer will be made, it said in a
Shares in Metro Bank surged as much as 43% in London trading on Thursday. The stock was up 29% at 3:22 p.m., giving Metro Bank a market value of 229 million pounds, or $309 million in U.S. dollars.
Metro Bank was started in 2010, becoming the first new retail lender to open its doors in the U.K. in more than a century. It’s one of the most prominent of the British challenger banks that emerged to take on incumbents like Barclays and Lloyds Banking Group, whose reputations were tarnished by the 2008 global financial crisis. Metro Bank has become known for its branch network, including in expensive locations like the King’s Road in Chelsea.
But Metro Bank’s image took a hit of its own in
In a third-quarter trading update last month, Metro Bank’s CEO Daniel Frumkin said the business had improved its lending mix and was seeing signs of a “gradual return to normality.”
Carlyle has deployed more than $10 billion investing in financial services firms, according to its
Its move for Metro is another sign that a long-awaited consolidation is gaining momentum among smaller U.K. lenders, which themselves face new competition from branchless rivals like Monzo Bank and Revolut.
Spain’s Banco Sabadell 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. 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.
The U.K. has been a hot bed for private equity takeovers this year, with buyout firms snapping up companies from the grocery chain Wm Morrison Supermarkets to the aerospace supplier Meggitt. Deals for banks are harder to execute, as requirements to hold regulatory capital make it harder to squeeze out returns. Lenders’ branch networks can also be expensive to maintain.
Willett Advisors LLC, an