After losing 75% of value in the last twelve months alone, Metro Bank (LON: MTRO) shares extended the downtrend last week amid rumors that customers money is not safe and its financial health is not sound enough to continue the business.
This Challenger bank, however, has quashed rumors related to its financial health and its latest round of fundraising.
Metro Bank said: “We’re aware there were increased queries in some stores about safe deposit boxes following false rumors about Metro Bank on social media and messaging apps. There is no truth to these rumors and we want to reassure our customers that there is no reason to be concerned.
In addition to assurance about accounts, the challenger bank said it is well positioned to raise £350 million pounds from existing and new investors.
Metro Bank shares have also been under pressure due to the 50% decline in its profits for the first quarter of this year. Panic selling and rumors about financial health are adding to the share price drop. Fidelity, which is one of the biggest shareholders, has declined its stake by nearly a third to 5.4% last week.
Shares of Metro Bank are currently standing close to £489, down sharply from £3400 level that it had hit one year ago.
Metro Bank is one of the largest challenger banks in the United Kingdom with 1.7 million customer accounts and 67 branches in London and the South East. The bank is in a position to solve its cash problems; the challenger bank says it is in the final round of talks with investors and the feedback is positive. The bank is likely to make an announcement regarding cash inflow of $350 million by the end of this week. Shares of this bank could make a big upside jump once the bank confirms the cash inflow.