High street lender Metro Bank has been approached about a potential private equity-backed takeover that could lead to another company disappearing from the London Stock Exchange.

The challenger bank was contacted within the last fortnight by financial services buyout firm Pollen Street Capital about an offer to take it private, according to Sky News.

Pollen Street is a major shareholder in mid-sized bank Shawbrook, which has previously approached Metro Bank about a merger between the two companies. In recent months, Shawbrook's owners have intensified efforts to identify potential corporate combinations, holding tentative talks with Starling Bank about a £5 billion tie-up while also preparing plans for a stock market listing.

The takeover approach comes as Metro Bank puts a traumatic period firmly behind it, having come close to insolvency before being rescued in November 2023 through a £925 million deal. The rescue package comprised £325 million of equity – a third contributed by Colombian billionaire Jaime Gilinski Bacal – and £600 million of new debt.

Gilinski now holds a near-53 per cent stake through his investment vehicle Spaldy Investments and sits on the company's board.

Since the bailout, Metro Bank has cut hundreds of jobs and sold portfolios of loan assets while chief executive officer Daniel Frumkin has improved its operating performance. The bank agreed to sell £584 million of unsecured personal loans in February, following the sale of approximately £2.5 billion of prime residential mortgages to NatWest Group in July 2024.

Shares in Metro Bank have more than trebled in the last year as its recovery has gathered pace. On Friday, the stock closed at 112.2p, giving it a market capitalisation of just over £750m. At one point in 2018, the lender had a market capitalisation of £3.5 billion.

Metro Bank became the first new lender to open on Britain's high streets in over 100 years when it launched following the 2008 financial crisis. However, its branch-based model, which included gimmicks such as offering dog biscuits, proved costly at a time when many rivals shifted to digital banking.

Reporting first-quarter results last month, Frumkin said: "During the first quarter of 2025, we have continued to deliver the strategic repositioning of Metro Bank's business, maintaining strong cost control while driving higher net interest margin by changing the mix of assets and remaining disciplined about deposits."

The bank operates from about 75 branches across the country and saw roughly 30,000 new personal and business current accounts opened during the last quarter.

Metro Bank has had a chequered history with City regulators despite its relatively brief existence. In 2022, it was fined £10 million by the Financial Conduct Authority for publishing incorrect information to investors, while the Prudential Regulation Authority imposed a £5.4 million penalty for similar infringements a year earlier.

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