July 25, 2018 / 10:04 AM / in 9 months

No more cash calls for Metro Bank after raising 303 mln stg -CEO

July 25 (Reuters) - Metro Bank has ruled out additional cash calls to support its growth ambitions in the medium term, its chief executive told Reuters, a day after the British lender raised 303 million pounds ($398.41 million) in its second major share sale in as many years.

The proceeds would be used to increase lending and replace funds used in the purchase of a mortgage portfolio for 523 million pound in February, the challenger bank said in a statement on Tuesday.

CEO Craig Donaldson said on Wednesday that Metro Bank was now satisfied with its capital position.

“This (placing) certainly gives us a very, very strong capital base from which to continue to grow. I don’t foresee in the short term to medium term that we will need to be raising equity,” he told Reuters.

The lender, founded in 2010 to help break the dominance of Britain’s biggest banks, said in April it expected to issue up to 250 million pounds of new debt this year, stoking concerns it may need to raise even more capital.

Metro Bank, which aims to more than double its loan book within three years, raised 278 million pounds last year by selling new shares and analysts have said institutional shareholders could tire of cash calls.

Donaldson, however, said Metro Bank had the backing of its investors.

“The fact that we went out and raised over 300 million pounds, at market price, no discount and we were significantly over subscribed, means that yes we have the support,” he said.

RBC Capital, Jefferies and Keefe, Bruyette & Woods acted as bookrunners from the placing.

Metro Bank’s underlying profit before tax rose to 24.1 million pounds in the six months ended June 30, up sharply from 6 million pounds a year ago, driven by strong growth in residential mortgages and commercial lending.

$1 = 0.7605 pounds Reporting by Noor Zainab Hussain in Bengaluru Editing by Alexandra Hudson

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