Metro Bank shares plummeted yesterday upon news of capital raising.

Newspaper reports that the bank needed to raise up to £600 million caused its shares to drop by as much as a third.

On Thursday, Metro Bank made an effort to reassure investors about its financial situation.

It stated it "continues to consider how best to enhance its capital resources" without making any comments about the number.

According to the BBC, Treasury officials have spoken with the financial services regulator, the Prudential Regulation Authority, which is keeping an eye on the situation at Metro Bank.

It came after prior discussions between the regulator and Metro Bank itself, which business officials described as regular discussions.

The bank has emphasised that its finances are stable and that it is still complying with all legal standards.

The Financial Services Compensation Scheme ensures that depositors will receive their money back up to £85,000 in the event that a bank has financial difficulties.

The first bank to start in the UK in more than a century, Metro Bank was established in the wake of the financial crisis.

When it was established in 2010 with the promise of being open seven days a week, it positioned itself as a so-called "challenger" bank to the major High Street banks. It now has around 2.7 million customers.

On Thursday morning, its shares were momentarily suspended; by the time the markets closed, they had fallen by more than 25%. They had previously experienced significant drops in value last month as a result of regulators rejecting a request to reduce the capital or liquidity requirements associated with its mortgage business.

Before roughly £350 million in debt has to be refinanced in October 2025, the bank is now looking into a range of measures to strengthen its balance sheet.

(Sources: investing.com, reuters.com)