Carlyle Group Inc. has approached British lender Metro Bank Plc about a possible takeover. Metro Bank has engaged with the U.S. private equity firm but there is no certainty an offer will be made, it said in a statement that confirmed an earlier Bloomberg News report. Under U.K. takeover rules, Carlyle now has until December 2 to announce whether or not it will make a firm offer for the company.
Metro Bank was the first new retail bank to open its doors in the U.K. in more than a century in 2010 and has become known for its branch network, including in expensive locations like the King’s Road in Chelsea. It emerged to challenge incumbents such as Barclays Plc and Lloyds Banking Group Plc, whose reputations in the country had been tarnished by the 2008 global financial crisis.
But Metro Bank’s image took a hit of its own in 2019, when U.K. regulators the Financial Conduct Authority and Prudential Regulation Authority began an ongoing investigation into how it misclassified certain assets. The lender, which had a market value of about 3.6 billion pounds at the peak, has seen its shares slide since then.
In a third-quarter trading update last month, Metro Bank’s Chief Executive Officer Daniel Frumkin said the business had improved its lending mix and was seeing signs of a “gradual return to normality.”
Carlyle’s move is another sign that a long-awaited consolidation among smaller U.K. lenders is gaining momentum.
Spain’s Banco Sabadell SA said in October that it had rejected a bid from the U.K.’s Co-operative Bank Holdings Ltd. to gain control of rival lender TSB Bank Plc. If a deal had been struck, the tie-up would have created a lender with more than 8 million customers for mortgages, current accounts, credit cards and other savings products.
