Shares in Metro Bank jumped more than 15% on Monday to reach a two-year high after reports emerged that Pollen Street Capital, the London-based private equity firm behind Shawbrook Bank, has approached Metro’s leadership about a potential takeover.
The discussions, which could result in the high street lender being taken off the London Stock Exchange and back into private ownership, have reignited concerns over job security for staff and continuity of service for customers—many of whom were only just recovering from the upheaval of Metro’s near collapse in late 2023.
While no formal offer has been made and the terms remain undisclosed, market speculation is mounting that any deal would ultimately see Metro Bank merged with Shawbrook, a specialist business lender already under Pollen’s ownership.
The news sent Metro Bank shares soaring to 130p, up from recent lows of around 30p, delivering a potential windfall for long-suffering shareholders who have seen the bank’s value battered by years of instability, accounting scandals, and regulatory setbacks.
Potential uncertainty for customers and employees
Although investors may welcome the prospect of a buyout, any deal with Pollen Street Capital is likely to bring a new wave of uncertainty for Metro’s 3,000 remaining employees and 3 million customers. The bank only recently concluded a cost-cutting programme that resulted in around 1,000 job losses, part of a wider turnaround plan implemented following a near-failure in October 2023.
Branches—which once operated with fanfare seven days a week and welcomed dogs—have already had their opening hours reduced as the bank seeks to rein in operational costs across its 75-location network.
A merger with Shawbrook would also likely raise strategic questions about branch operations and customer experience. While Shawbrook operates a largely digital-first, specialist lending model, Metro Bank built its brand on high street presence and in-person service. A consolidation could lead to further rationalisation—potentially including more job cuts or branch closures.
A turbulent journey from innovator to troubled lender
Metro Bank made headlines when it launched in 2010 as the first new high street bank in the UK in over a century, promising to shake up the retail banking sector with longer opening hours, in-branch coin-counting machines, and customer service that echoed US standards under its flamboyant founder, Vernon Hill.
But the bank’s initial popularity couldn’t shield it from operational failures. Its reputation suffered a major blow in 2019 after a serious accounting error led to an overestimation of its capital buffer, forcing the resignation of top executives and its founder. In the years that followed, Metro struggled to convince regulators of its ability to independently assess lending risk—further dampening investor confidence.
The situation reached a crisis point in October 2023, when Metro was forced to secure a £925 million rescue deal. As part of the package, Colombian billionaire Jaime Gilinski Bacal took a controlling 53% stake in the lender, having gradually built up his position over the previous three years.
While that bailout saved the bank from collapse, it also signalled the end of Metro’s ambitious plans to disrupt mainstream banking. Since then, leadership has focused on stabilising operations, cutting costs, and seeking new avenues for growth or exit.
The path ahead: private ownership and consolidation?
The reported approach from Pollen Street Capital is the latest in a wave of private equity interest in UK financial services, as undervalued listed banks attract suitors looking for consolidation opportunities.
Bringing Metro Bank into the fold could offer Shawbrook broader reach into the retail banking space, while allowing Pollen to streamline operations and capitalise on back-office synergies. However, it would also carry risk: Metro’s legacy IT systems, its high-cost branch network, and lingering regulatory scrutiny could all complicate integration.
The deal also reflects a broader trend of reshuffling in the UK banking sector. Just this week, shares in Metro’s rival AIB Group rose after the Irish government sold its final stake in the lender, completing a full exit from its post-crisis nationalisation. Meanwhile, TSB—owned by Spain’s Sabadell—is also being shopped around to potential buyers as Sabadell fends off a hostile bid from BBVA.
If Pollen’s interest materialises into a formal offer, it could mark the end of Metro Bank’s turbulent time on the public markets and the beginning of a new chapter under private ownership. But for staff and customers alike, the questions surrounding branch services, employment, and long-term direction remain unanswered.
For now, Metro Bank, Pollen Street Capital, and Shawbrook have all declined to comment on the takeover reports.
