UK bank shares banned twice over cash emergency

Trading in shares of a UK bank experienced two suspensions due to financial challenges. The London Stock Exchange briefly halted Metro Bank shares twice on Thursday, prompted by a nearly 30% decline in response to news of the bank urgently seeking funds to address its balance sheet issues.

On September 12, it was disclosed that UK authorities had yet to approve a cost-effective plan allowing Metro Bank to manage its mortgage business. Subsequently, Metro Bank shares witnessed a staggering drop of over 60%.

The London Stock Exchange attributed the short trading pauses to circuit breakers activated by the sharp decline in Metro Bank's stock, as reported by CNBC.

Metro Bank reportedly sought £600 million ($727 million) in debt and equity to address its financial situation. In a statement, the bank expressed consideration for the "optimal enhancement of its capital resources." The explored options include appealing to investors to refinance £424 million in debt due in 2025 or raising funds by selling debt, shares, or assets.

While the bank affirmed that no decision had been made regarding these options, credit rating agency Fitch placed Metro on negative watch, citing heightened risks to its business model, capital position, and funding.

Founded in 2010 by US millionaire Vernon Hill, Metro Bank marked the UK's first new high-street bank in over a century. However, it faced a crisis in 2019 due to false reports, leading to the removal of its chair and CEO.