Metro Bank is putting itself up for sale three years after its near-collapse, in a move that could hand a £420m windfall to its Colombian billionaire investor, Jaime Gilinski Bacal.
Metro Bank made the rare decision to publicly announce it was open to bids on Thursday, paving the way for a wider pool of suitors. The announcement pushed the share price up by 7% by mid-morning, valuing the bank at about £1.3bn.
If successful, the sale would allow Gilinski Bacal a chance to sell out of the bank he helped save from near-failure in late 2023.
The 68-year-old banking tycoon, who took a seat on Metro’s board after securing a 53% stake three years ago, has already seen a sixfold increase in the value of his shares, which he bought for just 30p each as part of a wider rescue deal. That means that at Thursday’s 190p share price, his British Virgin Island-based vehicle Spaldy Investments, could cash out with a £427m windfall.
It would mark the latest turnaround success for the billionaire, who made his fortune snapping up assets of struggling lenders on the cheap, before overhauling their operations and selling them on for a big profit. Gilinski Bacal is one of the wealthiest people in Latin America, worth about $16.9bn (£12.7bn), according to Forbes.
Metro Bank has been focused on a turnaround plan – which has involved lending more heavily to businesses and people with more erratic incomes – since it was forced into the £925m rescue deal in 2023.
Metro was the first high street bank to open in the UK in more than 100 years when it was launched by another billionaire, the US businessman Vernon Hill, in 2010. It attracted a wave of customers, and offered dog-friendly branches with seven-day openings.
However, it struggled after a major accounting blunder in 2019 that prompted investors to dump their shares and fearful customers to pull their cash. It led to the resignation of top executives, as well as the then chair, Hill, who was well-known for having his yorkshire terrier Sir Duffy (and later Sir Duffy II) in tow.
Metro’s shares took another dive in 2023. That year, it emerged that the bank would need more cash from investors, having failed to convince regulators that it could be trusted to assess its own risks.
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The lender finally secured a rescue, which was brokered in part by UK regulators at the Bank of England, in 2023. It has since embarked on the turnaround plan, which has increased its profits but came at a cost for staff and customers. Metro’s chief executive, Daniel Frumkin, slashed more than 1,000 jobs in spring 2024 and decided to close branches on Sundays.
The bank said on Thursday that a sale was just one of the options on the table and that it would still be able to go it alone if no suitable bidder came through.
Metro’s board “unanimously believes that evaluating potential interest in the company” through a potential sale “will maximise the value creation opportunities available to shareholders and deliver benefits for all stakeholders”, the bank said.
