Metro Bank has reportedly asked UK High Street banks to make offers for its £3 billion mortgage book by the beginning of November.

The move, first reported by Sky News, comes after the bank agreed a financing deal with investors last week after a volatile period of trading for the UK challenger bank.

The package includes a £325 million capital raise, made up of £150 million of fresh equity from Metro's largest shareholders and £175 million of new debt from bondholders.

The announcement also included £600 million of debt refinancing, which the bank said would enhance its balance sheet strength and accelerate earnings potential.

Several weeks ago, news emerged that Metro had approached investors for up to £600 million to strengthen its balance sheet, with the Financial Times reporting that the Bank of England’s Prudential Regulation Authority (PRA) had contacted a number of top banks to see if any were interested in Metro.

The publication reported that NatWest, Santander and Lloyds were all considering bids for part of Metro. The report noted that all three, along with HSBC and JPMorgan Chase, had ruled out a full takeover bid for the bank, with a bidding process being run by accounting firm EY.

Sky News separately reported that Metro turned down a series of takeover approaches from specialist business lender Shawbrook including one made in the second half of September.

While the PRA was said to be pushing for bids for the whole bank, any buyer would have needed to inject around £500 million additional capital into the business. Metro's commitment to physical banking with the operation of 76 branches is also a reported deterrent for potential buyers.

Metro has been under scrutiny since mid-September, when UK regulators declined to approve a request to lower the capital requirements of the bank's mortgage book. The bank subsequently last week confirmed it was considering options such as a combination of equity and debt issuance along with refinancing and asset sales.

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