Metro Bank (LON: MTRO) shares were up 10% on Friday. How long that’s going to last into this new week is an interesting subject for discussion. For the muttering over the weekend - including late Sunday night which is when bank reorganisations actually get done - is that there’s going to have to be a take out here. At which point, well, how much might be left for the equity of MTRO shareholders? At this point that’s difficult to determine but we’d be surprised to see today leading to significantly higher share prices there - to be mild about it.
This sort of talk is not proof but it’s also not positive for the share price: “ The Bank of England’s regulatory arm is understood to have approached a number of big lenders in the past few days, including NatWest and JP Morgan Chase, to see if they had any interest in the embattled high street rival Metro Bank. JP Morgan Chase examined a potential bid to take over the whole of Metro after speaking to the Prudential Regulation Authority (PRA) but decided on Saturday night not to go ahead with it, a source said. NatWest was also asked to look at buying the total business, and may yet consider a sale of Metro’s mortgage book, as previously reported. HSBC, Lloyds and Santander UK were also reported to be among the banks approached as potential Metro buyers.” Yes, OK, that’s The Guardian and listening to them on matters economic is not a wallet fattener. But we probably should believe that story - Metro Bank is being touted around the market for anyone who wants to buy it.
Which is something of a problem for those who own equity in Metro Bank - because no one really seems to want it. Which is not good for the equity value, or share price, in Metro Bank: “NatWest and Lloyds among rivals weighing bids for parts of Metro Bank. Several major lenders rule out a full bid for UK challenger bank in the absence of state support.”
No, that’s not good.
Metro Bank share price from Google Finance.
We’ve talked before of Metro Bank: “The MTRO share price problem is that the application to be allowed to sell mortgages has been declined. Whether we call it declined again or delayed again makes little difference. They’re not going to get the licence this year.” And also about MTRO shares: “Metro Bank (LON: MTRO) gives one of those delightful little lessons in how to read a corporate announcement. MTRO shares fall 24% as people do so. For what Metro has done is confirm some of the gossip running around the newspapers - a £600 million capital raise for example - without actually saying so out loud.”
Now it isn’t true that everything in the newspapers is true. And yet - if the Bank of England is touting Metro Bank around the market and no one wants to buy all of it. That’s a pretty good indication that Metro Bank, as a whole, isn’t worth all that much.
This is not, to put it politely, an indication that Metro Bank shares, that MTRO, are worth very much.
