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Finance Expert Warns Metro Bank Customers Not To Panic And Withdraw Their Money
13 May 2019, 08:22
Metro Bank customers should not be worried by the rumours spreading around social media, a finance expert told LBC.
A number of branches of the bank had long queues of people looking to withdraw their money after reports that it may be about to crash were circulated on WhatsApp.
The bank moved quickly to quash rumours, saying: "We’re aware there were increased queries in some stores about safe deposit boxes following false rumours about Metro Bank on social media and messaging apps.
"There is no truth to these rumours and we want to reassure our customers that there is no reason to be concerned.
"We’re a profitable bank, rated No 1 for personal current account service by the CMA and committed to serving our 1.7 million customer accounts.”
LBC's City commentator David Buik told Nick Ferrari that customers' money would be safe.
He said: "Metro Bank's been under the lash from short hedge fund sellers. The share price has gone down from £40 to £5 and change in the last 14 months.
"Consequently, it requires some extra capital, about £350million, which they are going to have to get from their shareholders to meet the regulatory requirements of the FCA.
"Your listeners shouldn't be worried about their money because anything under £83,000 is covered by the compensation scheme.
"But they are going to have to do something about it because there was a problem with the balance sheets. Some money was lent to companies without the adequate requirement on capital and this has been seized upon by the authorities, who are very good at making sure these things do happen.
"Unfortunately, as you can imagine, there has been quite a run on deposits which have left the bank. But this is not a time for panic. This is a time for a pragmatic outlook.
"Let's hope Craig Donaldson does manage to raise the money quickly and put the matter to bed.
"I suspect the chairman of Metro Bank, Vernon Hill, who's a pretty flamboyant character, may well not be able to stay on as chairman indefinitely."