Bank of England's PRA approaches big UK lenders about potential Metro Bank takeover

The Bank of England's Prudential Regulation Authority (PRA) has reportedly reached out to several major UK lenders to gauge their interest in potentially acquiring troubled British lender Metro Bank. According to the Financial Times, JPMorgan and other banks were approached by the PRA this week regarding the possibility of a takeover.

Metro Bank has faced a series of challenges in recent years, including accounting errors, leadership departures, and delayed regulatory approvals. In light of these setbacks, the bank has been exploring various funding options to strengthen its finances and reassure regulators.

While JPMorgan Chase was mentioned as a potential bidder for Metro Bank, they ultimately decided not to proceed with an offer due to concerns over the amount of additional capital that would be required. The deal, had it gone through, would have been conducted via JPMorgan's digital banking unit in the UK, Chase UK.

In addition to JPMorgan, specialist business lender Shawbrook also made several unsuccessful takeover approaches to acquire Metro Bank. However, Metro Bank recently held talks with bondholders about an equity injection as well as debt restructuring, suggesting that they are actively seeking alternative solutions to address their financial needs.

The PRA's outreach to potential buyers includes not only JPMorgan but also other big lenders such as NatWest, HSBC, Lloyds, and Santander UK. While it remains unclear which banks will express interest in taking over Metro Bank, the fact that the PRA is actively exploring options highlights the challenging environment for challenger banks competing against more established industry players.

Metro Bank itself has stated that its options for raising funds include a combination of equity and debt issuance, refinancing, and asset sales. As the situation continues to develop, it remains to be seen which route Metro Bank will ultimately take to stabilize its operations and ensure future growth.

It is important to note that neither JPMorgan nor Metro Bank have provided any official comments on the matter at this time. The negotiations and discussions surrounding the potential takeover are still ongoing.