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Metro Bank founder tells us he may no longer float next year

by LLB Reporter
24th Jul 13 10:26 am

Metro Bank founder Vernon Hill has cast doubt over whether he will take the company public next year, as had been expected.

Metro Bank, which opened in 2010 and is the first new UK high street bank in more than 100 years, has long had ambitions to float early next year. But a further round of private fundraising may now happen instead, LondonlovesBusiness.com can reveal.

 “We are going to raise capital at the beginning of next year – that is certain,” Hill told LondonlovesBusiness.com. “But whether it is going to be IPO or private capital, I’m not sure […] I’m still considering it.

“We have already raised £250m [from private investors].”

Metro Bank shareholders include US hedge fund manager Steve Cohen, billionaire property developers the Reuben brothers, as well as property mogul Richard LeFrak. Investment firms Fidelity and Wellington Capital have also been long-term backers.

“Banks are already private companies,” Hill told LondonlovesBusiness.com.” If we were not, and you kept on asking me about my earnings, I would tell you it was none of your business.”

“So this means that we will have to go public, it is just a matter of whether it will be at the next round of fundraising or not.”

Metro Bank has yet to turn a profit. In the three years since its launch it has posted more than £100m-worth of losses, but this does not seem to have deterred investors.

In June last year, the bank raised £126m to fund its ambitious branch expansion plans. It has previously said that its fundraising round was oversubscribed, with the bank choosing not to take up the full £140m on offer.

The bank, which currently has 19 branches in London and the south-east, has ambitions to open 200 branches by 2020 and still plans to go public eventually.

Hill took over as chairman earlier this year in the bank’s bid to get ready for its IPO. He replaced Anthony Thomson who resigned September.

Find out more in our in-depth profile of Vernon Hill out next week…

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