19.58%

US PRIVATE equity giant Carlyle yesterday confirmed it walked away from talks to buy UK lender Metro Bank, prompting investors to send shares in the bank to the doghouse.

Metro Bank shares plummeted over 19 per cent yesterday. However, it still priced higher than before the dog-friendly bank announced it was being courted by Carlyle.

News that Carlyle had dumped the talks sparked speculation in the City that another suitor could come in for the ailing bank.

John Cronin, banking analyst at Goodbody, said: "There is also, of course, the prospect that other would-be buyers emerge from the woodwork in the wake of the Carlyle approach."

Metro Bank, which has more than two million customer accounts, said yesterday it "continues to strongly believe in the standalone strategy and future prospects" of the group.

However, that take did not chime with City analysts, who dismissed the lender's prospects under its current ownership structure, with Liberum predicting it would be loss making.

"Management of Metro bank highlight that they strongly believe in the standalone strategy and future prospects of the bank," Shailesh Raikundlia, an analyst at Liberum, said. "However, we continue to believe that the business model is challenged and expect the group to be loss making throughout our forecast period."

Analysts at Goodbody predicted news of the tie up breaking down would trigger "significant selling pressure" and markets unduly delivered.

(c) 2021 City A.M., source Newspaper