Banking crisis 2.0? Metro Bank shares crash 60% last month

While the memory is still fresh of the previous banking crisis that has seen several global banking giants crumble this year, the recent underperformance of Metro Bank (LON: MTRO) could signal another crisis on the horizon for the already heavily embattled sector.

Specifically, the shares of one of Britain’s first challenger banks have crashed nearly 60% across the previous month, exacerbated by the massive decline of around 30% yesterday alone, following a report it was trying to raise funds to bolster its finances, according to the data retrieved on October 6.

As it happens, various media sources have recently reported that Metro Bank was urgently seeking to raise £600 million – up to £250 million in equity funding and £350 million of debt – from investors, as well as considering selling about £2.3 billion of its £7.5 billion mortgage book in a bid to recover its finances.

MTRO stock price analysis

At press time, the price of MTRO stock amounted to $42.15, which means it has accumulated a loss of 26.31% in the last five days, losing 57.87% to its value across the previous 30 days, dropping 56.86% over the course of the past six months, and declining 64.52% since the year’s turn.

Indeed, the recent decline of Metro Bank has reminded many of the previous banking crisis during which Silicon Valley Bank (SVB), Silvergate Bank, Signature Bank, and First Republic Bank (NYSE: FRC) had all suffered catastrophic declines as the “banking contagion” spread, and investors rushed toward alternative assets, including cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).

Interestingly, Metro Bank was one of the banks that received massive cumulative penalties from the United Kingdom’s regulators this year, amounting to £10 million ($12.41 million) between June 2022 and June 2023 and ranking as the fourth-highest penalty amount in the UK after those against Santander UK, TSB Bank, and Citigroup, according to a report by Finbold published on June 7.

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