A day after Vernon Hill, noted cynophilist and founder of Metro Bank (MTRO), saw off a shareholder revolt at the AGM, shares in the challenger bank took a dive as fears emerged that it might struggle to meet its capital targets unless it raises another £200m-£300m in equity capital before the end of the year.
A first quarter update looked promising on the operational front, with 41 per cent deposit growth coupled with a 4-percentage point increase in the loan-to-deposit ratio to 86 per cent. The bank also highlighted a marked step-up in its loan book, but its common equity Tier 1 capital (CET1) stood at 13.6 per cent of its risk-weighted assets as at the end of March, against a rate of 15.3 per cent recorded at the end of December – and analysts believe the trend is likely to continue.
