Metro Bank has launched a formal sale process as part of a strategic review, opening the door to a possible takeover of the British lender. The bank said on Thursday that it was not in active discussions with any potential bidder and had received no offer.

The London-based bank, which had a market value of about £1.21 billion at Wednesday's close, said its board was reviewing options to build on its turnaround and accelerate growth. Shares in the bank rose about 7% after the announcement.

Advisers appointed, no bidder in talks

Metro Bank has appointed Morgan Stanley as lead financial adviser for the process, which will run under the UK Takeover Code. The board is inviting expressions of interest from parties considering an offer for the company's entire issued share capital.

The bank stressed there was no certainty that any offer would be made, or that a sale would be completed. The announcement starts an offer period under the Takeover Code, which brings disclosure requirements for shareholders.

Turnaround continues alongside the review

Metro Bank said it remained confident in its standalone prospects and would keep carrying out its existing strategy while the review runs. It reaffirmed the guidance given in its third-quarter trading update on 4 November, including return on tangible equity targets of more than 13% in the fourth quarter of 2026, above 15% in 2027 and over 18% in 2028.

In the third quarter, gross loans rose 4.9% to £9.43 billion from a year earlier, driven by 37% growth in target lending segments to £6.62 billion. Net interest margin widened by 42 basis points to 3.45%. Colombian billionaire Jaime Gilinski Bacal owns a majority stake in the bank after leading an equity recapitalisation three years ago.

Sources: Reuters, AJ Bell