What happened at Metro Bank , is my money safe? :

Hello Here you will read What happened at Metro Bank , is my money safe? Several big banks, like Santander, NatWest, and Lloyds, are thinking about maybe buying all or some parts of Metro Bank. Metro Bank recently talked with government officials because they want to raise £600 million to make their finances stronger. They need this money to keep growing and lending to people. Their shares have dropped a lot, and some people are worried if they can survive.

 

Metro Bank says they're okay for now and are doing business as usual. They've been around since 2010, when an American billionaire named Vernon Hill started them. They have about 2.7 million customers and hold about £15.5 billion in deposits from UK customers.

Earlier this year, three American banks and the biggest bank in Switzerland had problems.

If you're a Metro Bank customer and worried about what's happening, here's what you need to know.

What happened at Metro Bank :-

Usually, when interest rates go up, which they have been doing since the end of 2021, banks make more money. They can borrow money at one rate and then lend it out at a higher rate or pay more interest on savings accounts.

But people have been worried about Metro Bank for a while. Their share prices used to be £20 each, but they've dropped a lot since 2018 and are now less than 50p.

 

Metro Bank is a challenger bank, but it has faced challenges of its own. It spent a lot of money on branches while other banks were closing them. But it has been tough to get people to switch from established banks, even though Metro Bank had issues with customer service.

The Prudential Regulation Authority (PRA), which oversees banks, is worried about Metro Bank's future.

Metro Bank's finances are under pressure because of rising interest rates. They have a debt of £350 million coming due in October 2025. By then, they need to either find new money to pay it back or find another way to deal with it. It might be more expensive to borrow the money because interest rates have gone up.

If they can't get the cash they need, they might have to sell some of their bond investments, but that could mean selling them for less than they're worth.

Is my money safe ? 

Metro Bank says customers don't need to worry. But if you're concerned about your money, there are protections in place. Metro Bank is regulated in the UK, so your accounts are covered by the Financial Services Compensation Scheme (FSCS).

FSCS protects up to £85,000 of your money in each account with each bank. It also covers things like mortgages, insurance, and investments. So, if Metro Bank ever had to stop operating, your money would be safe up to £85,000.

There are some situations where you might be covered for more than £85,000. For example, if you have a lot of money from selling a house or an inheritance, you might be covered for up to £1 million for six months.