Colombian Investor Takes Control of Metro Bank in Rescue Deal

Colombian businessman Jaime Gilinski Bacal has taken control of Metro Bank as part of a rescue plan to address the British lender’s financial troubles. Metro Bank announced that it had secured £325 million ($396 million) from investors, with £150 million ($183 million) in capital and £175 million ($213 million) in debt. Spaldy Investments, owned by Gilinski Bacal, will contribute £102 million ($124 million), increasing its stake from 9% to 53%. Metro Bank, established in 2010, was the first bank to challenge major British banks in over a century. After its shares were sold last week, the bank’s stock rose 22%. However, it has lost 55% of its value this year. The Bank of England has welcomed the deal, which will also help Metro Bank refinance £600 million ($731 million) of debt. Metro Bank’s CEO, Daniel Frumkin, said the operation marks a new chapter for the bank. Gilinski Bacal, an investor since 2019, believes in the importance of physical and digital banking with a focus on exceptional customer service. According to Forbes, his net worth is estimated at $5.3 billion. Gilinski’s daughter, Dorita Gilinski, sits on the board of directors at Metro Bank. The bank has faced challenges in recent years, with losses in 2019 and further setbacks due to the Covid-19 pandemic. It reported a loss of £311 million ($377 million) in 2020. The bank’s shares have come under pressure since regulators rejected its request to hold less capital against residential mortgages. Ratings agency Fitch has also placed the bank on watch for a possible credit rating downgrade, citing concerns about its capital position, financing, and business model. Metro Bank aims to become the UK’s leading “community bank” and has branches across the country.