Metro Bank has raised around £277.9m through a placing of new shares in order to continue its growth plans.
A total of 8.02 million new ordinary shares, representing 9.9 per cent of Metro Bank’s issued share capital, were issued at a price of £34.65p each.
Vernon Hill, chairman and founder of Metro Bank, bought £10m of the new shares.
He said: “Our shareholders share Metro Bank's long term vision to create fans and we value their support as much today as when we were founded seven years ago.
“This transaction secures fresh capital which will allow the phenomenal momentum in Metro Bank's growth to continue.”
The proceeds will also be used to replace liquidity in relation to the recent purchase of a £598.7m portfolio of mortgages from Cerberus, a private equity firm which specialises in distressed investing and which bought £13bn of former Northern Rock mortgages last year.
Yesterday afternoon (25 July) Metro Bank announced customer deposits were up 49 per cent year-on-year to £9.8bn.
Statutory profits after tax almost doubled in the second quarter of 2017 to £2m, with underlying profits, excluding items such as the Financial Services Compensation Scheme levy, also doubled to £4m.
Lending was up 67 per cent year-on-year to £7.8bn but its net interest margin was down to 1.92 per cent, which Metro Bank said was because it was holding higher cash balances ahead of making the Cerberus acquisition.
Craig Donaldson, chief executive of Metro Bank, said: “This has been another great half year for Metro Bank with extremely strong organic lending supported by a £600m book purchase increasing our loan to deposit ratio to 79 per cent.
“This, taken together with continued strong deposit growth at a reducing cost of deposits, have led to us doubling our profits quarter on quarter, from £2m to £4m, and reporting our fourth consecutive quarter of profitability.”