Metro Bank has raised more than expected in its long-awaited share placement yesterday, bringing in £25m over target at a discounted share price.
In February the struggling challenger bank announced a £350m share placement to "support its growth", which followed an accounting error discovered earlier this year, including the over-reporting of its capital ratios, as reported by the Financial Times.
However, Metro has now reported it raised £375m through the placing launched yesterday (May 16) following "strong demand from both existing and new shareholders".
The placing was priced at 500p a share, at a 5.2 per cent discount on the bank's average over the preceding five days.
Vernon Hill, chairman and founder of Metro Bank, said: "I am really pleased with the support we have received from both existing and new shareholders, and for their confidence and belief in Metro Bank's strategy."
Mr Hill said the placing was "significantly oversubscribed" and as a consequence the bank raised more than planned.
He added: "Although we've faced challenges in the past few months, we remain fully focused on providing the outstanding service and convenience that our customers expect of us.
"This growth capital will enable us to continue to expand the business and implement our strategic initiatives."
The Prudential Regulation Authority said it welcomed the steps taken by Metro Bank, describing it as "profitable" with adequate capital and liquidity to serve its current customer base.
In February Metro Bank was awarded £120m in funding to help meet the needs of small and medium enterprises, granted from a £775m fund created as a condition of Royal Bank of Scotland accepting a £45bn bailout during the financial crisis.