LONDON — Shares of Britain’s Metro Bank were briefly suspended from trading twice early Thursday, in a volatile session that saw the stock shed more than 29% from the Wednesday close.
They have since slightly pared losses, having resumed again trading shortly after 9:00 a.m. London time.
The London Stock Exchange, which lists the stock, confirmed to CNBC that the brief suspensions were triggered by its circuit breaker mechanisms because of the extent of the volatile drop.
The halts followed reports that the bank was trying to raise PS600 million ($727 million) in debt and equity, according to Reuters. The challenger bank, which launched in 2010, has a market cap of less than PS100 million.
Metro Bank said in a statement that it is currently considering “how best to enhance its capital resources,” with a particular focus on a PS350 million bond due to mature in October 2025.
Investors traded more than 1.6 million shares immediately after the stock market opened Thursday, according to FactSet. Metro Bank was valued at PS87 million as of Wednesday’s close, according to Reuters. Metro Bank was valued at PS87 million as of the Wednesday close, according to Reuters.
Last mont, the Bank of England’s main regulator, the Prudential Regulation Authority, suggested that it was unlikely to allow the lender to use its own internal risk models for some mortgages.
As such, the Metro Bank would be subject to higher capital requirements — a concern that has weighed on investors.
“It has been clear for some time that
is short of capital, with the bank operating below MREL requirements,” investment bank Keefe, Bruyette & Woods said in a research note, referring to minimum requirement for own funds and eligible liabilities enforced by authorities.
The key questions now facing the bank center on its ability to raise that capital and whether that will be sufficient to remove capital concerns, the note said.
— CNBC’s Ganesh Rao contributed to this report.[Metro]