Metro Bank shares jump after deal to bolster finances
ReutersMAY 2023
Despite growing worries in the wake of other bank failures such as Silicon Valley Bank, it should be noted that Metro's woes seem to have been self-induced by excessive business costs and an inefficient balance sheet. With the stocks and bonds of larger banks seeing little change, there is no real worry in the market of a contagious problem within the banking sector. Metro tried to compete with established institutions including Barclays and NatWest, but its attempt to attract customers solely through strong customer service simply failed to pan out.
Blame cannot solely be placed on Metro Bank’s unique customer base, strategy, and corporate culture — it must also fall on UK regulators who failed to catch issues in time to stop the bank from collapsing. Banks like Metro, Credit Suisse, and Silicon Valley, who have been clear outliers compared the likes of Lloyds, HSBC, and Barclays, must be more closely monitored from here on out, otherwise more customers will face financial distress.