Metro Bank has abandoned a planned £3 billion sale of its mortgage portfolio.
The UK challenger bank on Friday said that it had scrapped its plans two months after it began exploring a sale, citing market conditions.
Metro began exploring a sale in October as part of its attempts to improve its finances which would also lead to a £925 million rescue package backed by Colombian billionaire Jaime Gilinski.
In a statement, the bank said that the refinancing package had given it renewed balance sheet strength and that this was enough for it to continue operating without selling the mortgage portfolio.
It said: "Given the prevailing market environment, it is in the best interests of shareholders to retain the existing loan portfolio.”
In November, Sky News reported that Barclays was in exclusive talks to buy the mortgage book, fending off interest from the likes of Santander.
The announcement comes almost exactly three years after Metro announced the sale of a portfolio of owner occupied residential mortgages to NatWest for a cash consideration of up to £3.1 billion. At the time, a far more financially stable Metro said that the sale was in line with its strategy to enhance risk-adjusted returns on capital through the ongoing focus on balance sheet optimisation.
Metro Bank last month announced a significant cost reduction plan which, while not seeing store closures, could lead to 20 per cent of the bank’s workforce being laid off and customer benefits like seven-day opening hours being scrapped.
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