Metro bank market cap passes £3bn after mortgage portfolio acquisition
Companies: Metro Bank Holdings Plc
Brick and mortar lender Metro Bank has announced that it has acquired a portfolio of UK mortgages from Cerberus European Residential Holdings B.V. for nearly £600m. The move sent shares up 2% early on Friday.
The portfolio is mostly buy-to-let mortgages, with just 8% being owner occupied. It is, however, all secured on property and is reportedly well-diversified across the UK. Its credit risk profile is similar to Metro's current book and has a weighted average seasoning of about ten years.
The group said it was funding the move by using cash from existing resources, with £596.7m being taken on to its balance sheet.
CEO Craig Donaldson said the portfolio would complement the existing mortgage book and demonstrated the company's willingness to take advantage of opportunities as they arose:
"Our lending and deposit growth has gone from strength to strength and the acquisition of this high-quality loan Portfolio supports our high-growth, organic business model as we track ever closer to our 2020 guidance. In particular, the acquisition increases the Loan to Deposit ratio to c.78% (2020 guidance c.80%)."
