By all accounts, Metro Bank (LSE: MTRO) has had a chaotic run. From the glory days of dog bowls and seven-day banking to a near-collapse in 2023, the high street upstart has done more flipping than a London property developer. And yet, last week, the shares surged more than 15% after news broke that Pollen Street Capital, owner of specialist lender Shawbrook, is circling the troubled bank.
A buyout might look like salvation. After all, Metro’s stock had sunk to just 30p after its 2023 crisis. Now it’s trading around the £1.30 mark, and shareholders smell redemption. But is this really the comeback story some investors are hoping for, or a classic private equity sleight of hand?
Let’s break it down.
The Numbers Look Better – but Only Just
To its credit, Metro is no longer in freefall. It returned to underlying profitability in the second half of 2024, with £12.8 million in profit after posting a £26.8 million loss earlier that year. The first quarter of 2025 also came in positive. Its net interest margin has improved, it’s winding down low-yield assets, and capital buffers now meet regulatory requirements.
The worst may be over. But the bank is still shrinking. Total assets fell to £17.07 billion by March 2025, with net loans down 6%. Customer deposits have also slipped. The move away from retail lending toward commercial and SME loans may help margins, but it won’t reverse the customer exodus overnight.
A Deal That Raises More Questions Than It Answers
Pollen Street’s interest is no coincidence. Metro is trading far below its book value and owns a coveted banking licence. But any merger with Shawbrook would almost certainly involve more job losses, further cuts to branch hours, and a strategic shift away from Metro’s original retail model. That might suit Pollen’s spreadsheet, but it’s hard to see how it benefits customers, or Metro’s long-suffering staff.
For a bank still rebuilding trust, being flipped into private ownership may not be a great look either. Just ask Co-op Bank, which has spent years trying to recover its credibility after private equity got involved.
So, Is Metro a Buy?
That depends on what kind of investor you are.
If you’re hunting for value in distressed assets and believe Pollen, or another buyer, will pay a premium, then yes, Metro might be a speculative buy. A takeover could unlock short-term gains, especially if you’re already in from the bottom. But let’s be honest, you’re not buying the business, you’re betting on a deal.
If you’re a long-term investor looking for a reliable banking business with clear strategy and growth prospects, Metro still looks fragile. It’s not yet clear whether it wants to be a community bank, a commercial lender, or something else entirely. The cost base is still high, the brand has taken a knock, and confidence among customers and regulators remains shaky.
The Bottom Line
In many ways, Metro Bank is a case study in how vision without discipline can unravel fast. It started with dog biscuits and disruption, but ended up needing a financial rescue. Now it’s caught in the middle of private equity opportunism, and investors are left wondering whether this is the rebound, or just the reshuffle before another sell-off.
So, is Metro a buy or a sell?
If you’re in it for the drama, it’s a buy. If you’re in it for the bank, it’s probably still a sell.