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Britain’s mid-sized Metro Bank gets Carlyle bid approach -Breaking

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© Reuters. FILE PHOTO – People pass a Metro Bank in London on May 22, 2019, Britain. REUTERS/Hannah McKay/File photo

By Muvija M

(Reuters) – Metro Bank announced that it received a takeover offer from U.S. equity firm Carlyle. This sent its battered shares up to 31% higher in a sign there is growing interest in Britain’s small banks.

Metro Bank’s market capitalisation was 178 million pounds ($242million) on Wednesday closing. The bank said it was working with Carlyle.

It added that there wasn’t any certainty of an offer and advised shareholders not to act.

Metro Bank’s shares fell by 57% between February 2020 and February 2020. This was due to low interest rates, competition and poor performance. However, they were still up 29% at 1125 GMT today and on track for their strongest ever day.

Metro Bank’s 2019 accounting errors led to the resignation of its top executives and a substantial drop in share prices.

Recently, British banking deals have been booming. Co-operative Bank made an unofficial offer to purchase Sabadell’s British subsidiary, TSB. The Spanish bank declined to accept the Spanish bid last month for TSB.

Metro Bank, established more than a decade ago as a challenger to Britain’s high-street banks, is struggling to earn profits from an expanding deposit base.

However, the losses were lessened in July after Britain’s recovery from the COVID-19 epidemic. This pandemic left small banks more at risk than their bigger and more varied counterparts due to record-low interest rates.

Metro Bank announced that a “further announcement” would be made when necessary.

Carlyle’s spokesperson declined to comment.

($1 = 0.7368 pounds)

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