January 19, 2014 / 11:32 AM / 4 years ago

UK's Metro Bank raises $637 mln to fund expansion

LONDON, Jan 19 (Reuters) - New British lender Metro Bank has raised 387.5 million pounds ($637.2 million) to fund its expansion plans by selling stock to institutional and private investors, it said on Sunday.

The company said it had sold the common stock at a share price that was 30 percent higher than at its previous capital raising in June 2012, and that the deal brought the total amount raised by the bank so far to 641 million pounds.

The capital raising is Metro’s fourth since it launched in 2010 as Britain’s first new high street lender for more than a century.

Metro promised to shake up the country’s banking industry and now has 25 branches in and around London. It is loss-making and wants to have 200 branches by 2020.

The British government is keen to encourage competition in a banking industry dominated by five players, two of which were bailed out by taxpayers during the financial crisis.

The main opposition Labour Party said on Friday it would force big banks to sell off branches to make room for new competitors if it won the next election, due in 2015.

Metro, which plans to use the new funds to expand its retail, commercial and private banking operations, said it had a leverage ratio of 25 percent and a Tier 1 capital ratio of 63 percent following the capital raising.

It did not disclose the names of any of the stock purchasers.

Bank of America Merrill Lynch and RBC Capital Markets acted as introduction agents.

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