REG-Metro Bank Holdings PLC Update on Cost Reduction Plan and Completion of the Firm Placing
30/11/2023 07:15
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Metro Bank Holdings PLC (MTRO)
Update on Cost Reduction Plan and Completion of the Firm Placing
30-Nov-2023 / 07:00 GMT/BST
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Metro Bank Holdings PLC (LSE: MTRO LN)
30 November 2023
Metro Bank Holdings PLC
Legal Entity Identifier: 984500CDDEAD6C2EDQ64
NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN
WHOLE OR IN PART IN, OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN
OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION,
RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE
OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE
TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY
SECURITIES IN METRO BANK HOLDINGS PLC OR ANY OTHER ENTITY IN ANY
JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE
7 OF THE UK VERSION OF REGULATION (EU) NO. 596/2014 ON MARKET ABUSE, AS IT
FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL)
ACT 2018.
Update on Cost Reduction Plan and Completion of the Firm Placing
£50 million Cost Reduction Plan
On 8 October 2023, Metro Bank Holdings PLC (“Metro Bank” or the “Company”)
announced a cost reduction plan to be launched in the fourth quarter of
2023 which was expected to deliver cost savings of at least £30 million
per year (with 75% of such cost savings being realised in 2024 and all
cost savings being realised from 2025 onwards). After further evaluation
of the cost base, Metro Bank has now identified potential cost savings of
up to £50 million per year. Implementation of the cost reduction plan is
expected to complete during the first quarter of 2024 and a £10-15 million
one-off restructuring charge is expected in 2023, which is lower than
previously anticipated.
Whilst the Company remains committed to stores and the high street, it
will transition to a more cost-efficient business model, investing in
automation for service and back-office operations and improving digital
channels, particularly for deposits. The Company is reviewing seven day
opening and extended store hours across the store network and is in
discussions with the FCA about the customer implications of any such
changes. The Company continues to seek sites in the North of England for
new stores as previously communicated. Metro Bank will also take action to
simplify its operations and selectively streamline lending to focus on
relationship banking and maximise risk-adjusted returns on regulatory
capital. These actions are expected to result in a 20% headcount reduction
but will not impact areas of growth.
A combination of the strong foundations built through the turnaround plan,
renewed balance sheet strength and the prevailing interest rate
environment present an opportunity to deploy liquidity into higher
yielding corporate and commercial lending utilising our risk-weighted
capital more effectively while ensuring our proposition remains closely
aligned to our customers’ needs. The cost reduction plan will support
Metro Bank in taking advantage of this opportunity.
Daniel Frumkin, Chief Executive Officer at Metro Bank, said:
“The support shown from our investors through this transaction will allow
Metro Bank to accelerate its growth plans, with the new capital allowing
us to unlock the potential in the business and deliver sustainable
profitable returns as we strive to be the number one community bank.
We remain committed to stores and the high street but will transition to a
more cost-efficient business model while remaining focussed on customer
service. These actions alongside other initiatives to reduce costs are
expected to deliver savings of up to £50 million per year on an annualised
basis.”
Completion of the Firm Placing
On 8 October 2023, Metro Bank announced that it had secured an
inter-conditional £325 million capital raise, comprising £150 million of
new equity and £175 million of new MREL notes (the “New MREL Notes
Raise”), and a debt refinancing package (the “Debt Refinancing”) in
respect of £600 million of its outstanding debt securities (together, the
“Capital Package”). The £150 million of new equity was structured as a
firm placing of 500,000,000 new ordinary shares at an issue price of 30
pence per new ordinary share (the “Firm Placing”). On 27 November 2023,
the Company announced the passing of the shareholder resolutions necessary
to approve the Firm Placing.
Metro Bank is pleased to announce the Firm Placing will complete today,
and that admission of the New Shares to the premium listing segment of the
Official List of the Financial Conduct Authority and to trading on the
main market of London Stock Exchange plc for listed securities will occur
at 8:00 a.m. today.
Each of the Company and Metro Bank PLC have provided instructions in
respect of the New MREL Notes Raise and the Debt Refinancing, as
applicable, and expect to release confirmation of the completion of the
other elements of the Capital Package, being the New MREL Notes Raise and
the Debt Refinancing, shortly.
The new capital significantly strengthens the Company’s CET1 and MREL
capital ratios, providing the opportunity to grow assets over the coming
years and allows Metro Bank to continue to evolve its products and
services to meet the banking needs of its customers.
The information contained within this announcement is deemed by the
Company to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014 (which forms part of UK law pursuant
to the European Union (Withdrawal) Act 2018) and was authorised for
release by Clare Gilligan, Company Secretary.
Enquiries
For more information, please contact:
Metro Bank Investor Relations
Jo Roberts
+44 (0) 20 3402 8900
1 IR@metrobank.plc.uk
Metro Bank Media Relations
Tina Coates / Mona Patel
+44 (0) 7811 246016 / +44 (0) 7815 506845
2 pressoffice@metrobank.plc.uk
Teneo
Charles Armitstead / Haya Herbert Burns
+44 (0)7703 330269 / +44 (0) 7342 031051
3 metrobank@teneo.com
RBC Capital Markets
Financial Adviser, Sponsor, Bookrunner and Corporate Broker
Oliver Hearsey / Elliot Thomas / Kathryn Deegan
+44 (0) 20 7653 4000
Morgan Stanley
Lead Financial Adviser
Paul Miller / Colm Donlon / Nishil Bhagani / Matthew Jarman
Debt Financial Adviser
Alex Menounos / Matteo Benedetto / Charles-Antoine Dozin
Moelis & Company
Debt Financial Adviser
Matthew Prest
+44 (0)207 634 3567
ENDS
About Metro Bank
Metro Bank services 2.8 million customer accounts and is celebrated for
its exceptional customer experience. It remains one of the highest rated
high street banks for overall service quality for personal customers and
the best bank for service in-store for personal and business customers, in
the Competition and Markets Authority’s Service Quality Survey in August
2023. Metro Bank has also been awarded “2023 Best Lender of the Year – UK”
in the M&A Today, Global Awards, “Best Mortgage Provider of the Year” in
2022 MoneyAge Mortgage Awards, “Best Business Credit Card” in 2022
Moneynet Personal Finance Awards, “Best Business Credit Card 2022”, Forbes
Advisor, “Best Current Account for Overseas Use” by Forbes 2022 and
accredited as a top ten Most Loved Workplace 2023. It was “Banking Brand
of The Year” at the Moneynet Personal Finance Awards 2021 and received the
Gold Award in the Armed Forces Covenant’s Employer Recognition Scheme
2021.
The community bank offers retail, business, commercial and private banking
services, and prides itself on giving customers the choice to bank
however, whenever and wherever they choose, and supporting the customers
and communities it serves. Whether that’s through its network of 76 stores
open seven days a week, 362 days a year; on the phone through its UK-based
contact centres; or online through its internet banking or award-winning
mobile app, the bank offers customers real choice.
Metro Bank Holdings PLC (registered in England and Wales with company
number 14387040, registered office: One Southampton Row, London, WC1B 5HA)
is the listed entity and holding company of Metro Bank plc.
Metro Bank plc (registered in England and Wales with company number
6419578, registered office: One Southampton Row, London, WC1B 5HA) is
authorised by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and Prudential Regulation Authority.
‘Metrobank’ is a registered trademark of Metro Bank plc. Eligible
deposits are protected by the Financial Services Compensation Scheme. For
further information about the Scheme refer to the FSCS website
4 www.fscs.org.uk. All Metro Bank products are subject to status and
approval.
Metro Bank is an independent UK bank – it is not affiliated with any other
bank or organisation (including the METRO newspaper or its publishers)
anywhere in the world. Please refer to Metro Bank using the full name.
Important Notices
This announcement has been issued by and is the sole responsibility of the
Company. The information contained in this announcement is for background
purposes only and does not purport to be full or complete. No reliance may
or should be placed by any person for any purpose whatsoever on the
information contained in this announcement or on its accuracy or
completeness. The information in this announcement is subject to change.
Neither the content of the Company’s website nor any website accessible by
hyperlinks on the Company’s website is incorporated in, or forms part of,
this announcement.
This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America. This announcement
does not contain or constitute an offer for sale or the solicitation of an
offer to purchase securities in the United States. No securities referred
to herein have been or will be registered under the US Securities Act of
1933 (the “Securities Act”) or under any securities laws of any state or
other jurisdiction of the United States and such securities may not be
offered, sold, taken up, exercised, resold, renounced, transferred or
delivered, directly or indirectly, within the United States except
pursuant to an applicable exemption from or in a transaction not subject
to the registration requirements of the Securities Act and in compliance
with any applicable securities laws of any state or other jurisdiction of
the United States. No public offering of securities is being made in the
United States. No securities referred to herein, nor this announcement nor
any other document connected with the proposed transactions referred to
herein has been or will be approved or disapproved by the United States
Securities and Exchange Commission or by the securities commissions of any
state or other jurisdiction of the United States or any other regulatory
authority, and none of the foregoing authorities or any securities
commission has passed upon or endorsed the merits of the proposed
transactions or the securities referred to herein or the adequacy of this
announcement or any other document connected with the proposed
transactions referred to herein. Any representation to the contrary is a
criminal offence in the United States.
This announcement is for information purposes only and is not intended to
and does not constitute or form part of any offer or invitation to
purchase or subscribe for, or any solicitation to purchase or subscribe
for any securities in any jurisdiction. No offer or invitation to purchase
or subscribe for, or any solicitation to purchase or subscribe for, any
securities will be made in any jurisdiction in which such an offer or
solicitation is unlawful. The information contained in this announcement
is not for release, publication or distribution to persons in the United
States or Australia, Canada, Japan, the People's Republic of China or
South Africa, and should not be distributed, forwarded to or transmitted
in or into any jurisdiction, where to do so might constitute a violation
of local securities laws or regulations.
No representations or warranties, express or implied, are made as to, and
no reliance should be placed on, the accuracy, fairness or completeness of
the information presented or contained in this release.
This release contains certain forward-looking statements, which are based
on current assumptions and estimates by the management of the Company.
Past performance cannot be relied upon as a guide to future performance
and should not be taken as a representation that trends or activities
underlying past performance will continue in the future. Such statements
are subject to numerous risks and uncertainties that could cause actual
results to differ materially from any expected future results in
forward-looking statements. These risks may include, for example, changes
in the global economic situation, and changes affecting individual markets
and exchange rates.
The Company provides no guarantee that future development and future
results achieved will correspond to the forward-looking statements
included here and accepts no liability if they should fail to do so.
Neither the Company nor any of its advisers undertakes any obligation to
update these forward-looking statements or to publicly release any
revisions that may be made to these forward-looking statements, which may
result from events or circumstances arising after the date of this
release.
This release is for informational purposes only and does not constitute or
form part of any invitation or inducement to engage in investment
activity, nor does it constitute an offer or invitation to buy any
securities, in any jurisdiction including the United States, or a
recommendation in respect of buying, holding or selling any securities.
This announcement is an advertisement for the purposes of the Prospectus
Regulation Rules of the Financial Conduct Authority (“FCA”) and not a
prospectus and not an offer to sell, or a solicitation of an offer to
subscribe for or to acquire securities. Neither this announcement nor
anything contained herein shall form the basis of, or be relied upon in
connection with, any offer or commitment whatsoever in any jurisdiction.
Investors should not purchase or subscribe for any transferable securities
referred to in this announcement except on the basis of information
contained in the combined prospectus and circular published by the Company
on 9 November 2023 (the “Prospectus”).
RBC Europe Limited (trading as “RBC Capital Markets”), which is authorised
by the Prudential Regulatory Authority (the “PRA”) and regulated by the
FCA and the PRA in the United Kingdom, is acting exclusively for Metro
Bank Holdings PLC and for no one else in connection with the subject
matter of this announcement and will not be responsible to anyone other
than Metro Bank Holdings PLC for providing the protections afforded to its
clients or for providing advice in connection with the subject matter of
this announcement. Neither RBC Capital Markets nor any of its
subsidiaries, branches or affiliates owes or accepts any duty, liability
or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client in connection with the subject matter of this announcement, any
statement contained herein or otherwise.
Morgan Stanley & Co. International plc (“Morgan Stanley”), which is
authorised by the PRA and regulated by the FCA and the PRA in the United
Kingdom, is acting exclusively for Metro Bank Holdings PLC and for no one
else in connection with the subject matter of this announcement. Morgan
Stanley, its affiliates and their respective directors, officers,
employees and agents will not regard any other person as their client, nor
will they be responsible to anyone other than Metro Bank Holdings PLC for
providing the protections afforded to clients of Morgan Stanley nor for
providing advice in connection with the contents of this announcement or
any matter referred to herein or otherwise.
Moelis & Company UK LLP (“Moelis & Company”), which is authorised and
regulated by the FCA in the UK, is acting as exclusive financial adviser
to Metro Bank Holdings PLC and no one else in connection with the matters
described in this announcement and will not be responsible to anyone other
than Metro Bank Holdings PLC for providing the protections afforded to
clients of Moelis & Company nor for providing advice in connection with
the matters referred to herein. Neither Moelis & Company nor any of its
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in tort,
under statute or otherwise) to any person who is not a client of Moelis &
Company in connection with this announcement, any statement contained
herein or otherwise.
Cautionary statement regarding forward-looking statements
This announcement contains forward-looking statements, including with
respect to financial information, that are based on current expectations
or beliefs, as well as assumptions about future events. These
forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts. Forward-looking statements
often use words such as “anticipate”, “target”, “expect”, “estimate”,
“intend”, “plan”, “goal”, “believe”, “will”, “may”, “should”, “would”,
“could”, “is confident”, or other words of similar meaning. Undue reliance
should not be placed on any such statements because they speak only as at
the date of this announcement and, by their very nature, they are subject
to known and unknown risks and uncertainties and can be affected by other
factors that could cause actual results, and the Company’s plans and
objectives, to differ materially from those expressed or implied in the
forward-looking statements. No representation or warranty is made that any
forward-looking statement will come to pass.
You are advised to read the Prospectus in its entirety, and, in
particular, the section of the Prospectus headed “Risk Factors”, for a
further discussion of the factors that could affect the Company’s future
performance and the industry in which it operates. In light of these
risks, uncertainties and assumptions, the events described in the
forward-looking statements, including statements regarding prospective
financial information, in this announcement may not occur. These
statements are not fact and should not be relied upon as being necessarily
indicative of future results, and readers of this announcement are
cautioned not to place undue reliance on the forward-looking statements,
including those regarding prospective financial information.
No statement in this announcement is intended as a profit forecast, and no
statement in this announcement should be interpreted to mean that
underlying operating profit for the current or future financial years
would necessarily be above a minimum level, or match or exceed the
historical published operating profit or set a minimum level of operating
profit.
Neither the Company nor any of its advisers is under any obligation to
update or revise publicly any forward-looking statement contained within
this announcement, whether as a result of new information, future events
or otherwise, other than in accordance with their legal or regulatory
obligations (including, for the avoidance of doubt, the Prospectus
Regulation Rules, the Listing Rules and Disclosure Guidance and
Transparency Rules).
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Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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ISIN: GB00BMX3W479
Category Code: MSCH
TIDM: MTRO
LEI Code: 984500CDDEAD6C2EDQ64
OAM Categories: 2.2. Inside information
3.1. Additional regulated information required to be
disclosed under the laws of a Member State
3.1. Additional regulated information required to be
disclosed under the laws of a Member State
Sequence No.: 288147
EQS News ID: 1784977
End of Announcement EQS News Service
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References
Visible links
1. mailto:IR@metrobank.plc.uk
2. mailto:pressoffice@metrobank.plc.uk
3. mailto:metrobank@teneo.com
4. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=ac50e6f85dfb73f4fd992d1146c5a526&application_id=1784977&site_id=refinitiv2&application_name=news
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