Update on Cost Reduction Plan and Completion of the Firm Placing

Metro Bank Holdings PLC (MTRO) Update on Cost Reduction Plan and Completion of the Firm Placing 30-Nov-2023 / 07:00 GMT/BST            Metro Bank Holdings PLC (LSE: MTRO LN) 30 November 2023 Metro Bank Holdings PLC Legal Entity Identifier: 984500CDDEAD6C2EDQ64 NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN, OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR  CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN METRO BANK HOLDINGS PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF REGULATION (EU) NO. 596/2014 ON MARKET ABUSE, AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. Update on Cost Reduction Plan and Completion of the Firm Placing £50 million Cost Reduction Plan On 8 October 2023, Metro Bank Holdings PLC (“Metro Bank” or the “Company”) announced a cost reduction plan to be launched in the fourth quarter of 2023 which was expected to deliver cost savings of at least £30 million per year (with 75% of such cost savings being realised in 2024 and all cost savings being realised from 2025 onwards). After further evaluation of the cost base, Metro Bank has now identified potential cost savings of up to £50 million per year. Implementation of the cost reduction plan is expected to complete during the first quarter of 2024 and a £10-15 million one-off restructuring charge is expected in 2023, which is lower than previously anticipated. Whilst the Company remains committed to stores and the high street, it will transition to a more cost-efficient business model, investing in automation for service and back-office operations and improving digital channels, particularly for deposits. The Company is reviewing seven day opening and extended store hours across the store network and is in discussions with the FCA about the customer implications of any such changes. The Company continues to seek sites in the North of England for new stores as previously communicated. Metro Bank will also take action to simplify its operations and selectively streamline lending to focus on relationship banking and maximise risk-adjusted returns on regulatory capital. These actions are expected to result in a 20% headcount reduction but will not impact areas of growth. A combination of the strong foundations built through the turnaround plan, renewed balance sheet strength and the prevailing interest rate environment present an opportunity to deploy liquidity into higher yielding corporate and commercial lending utilising our risk-weighted capital more effectively while ensuring our proposition remains closely aligned to our customers’ needs. The cost reduction plan will support Metro Bank in taking advantage of this opportunity. Daniel Frumkin, Chief Executive Officer at Metro Bank, said: “The support shown from our investors through this transaction will allow Metro Bank to accelerate its growth plans, with the new capital allowing us to unlock the potential in the business and deliver sustainable profitable returns as we strive to be the number one community bank. We remain committed to stores and the high street but will transition to a more cost-efficient business model while remaining focussed on customer service. These actions alongside other initiatives to reduce costs are expected to deliver savings of up to £50 million per year on an annualised basis.” Completion of the Firm Placing On 8 October 2023, Metro Bank announced that it had secured an inter-conditional £325 million capital raise, comprising £150 million of new equity and £175 million of new MREL notes (the “New MREL Notes Raise”), and a debt refinancing package (the “Debt Refinancing”) in respect of £600 million of its outstanding debt securities (together, the “Capital Package”). The £150 million of new equity was structured as a firm placing of 500,000,000 new ordinary shares at an issue price of 30 pence per new ordinary share (the “Firm Placing”). On 27 November 2023, the Company announced the passing of the shareholder resolutions necessary to approve the Firm Placing. Metro Bank is pleased to announce the Firm Placing will complete today, and that admission of the New Shares to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the main market of London Stock Exchange plc for listed securities will occur at 8:00 a.m. today. Each of the Company and Metro Bank PLC have provided instructions in respect of the New MREL Notes Raise and the Debt Refinancing, as applicable, and expect to release confirmation of the completion of the other elements of the Capital Package, being the New MREL Notes Raise and the Debt Refinancing, shortly. The new capital significantly strengthens the Company’s CET1 and MREL capital ratios, providing the opportunity to grow assets over the coming years and allows Metro Bank to continue to evolve its products and services to meet the banking needs of its customers. The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (which forms part of UK law pursuant to the European Union (Withdrawal) Act 2018) and was authorised for release by Clare Gilligan, Company Secretary. Enquiries For more information, please contact: Metro Bank Investor Relations Jo Roberts [phone] [e-mail] Metro Bank Media Relations Tina Coates / Mona Patel [phone] / [phone] [e-mail] Teneo Charles Armitstead / Haya Herbert Burns [phone] / [phone] [e-mail] RBC Capital Markets Financial Adviser, Sponsor, Bookrunner and Corporate Broker Oliver Hearsey / Elliot Thomas / Kathryn Deegan [phone] Morgan Stanley Lead Financial Adviser Paul Miller / Colm Donlon / Nishil Bhagani / Matthew Jarman Debt Financial Adviser Alex Menounos / Matteo Benedetto / Charles-Antoine Dozin Moelis & Company Debt Financial Adviser Matthew Prest [phone] ENDS About Metro Bank Metro Bank services 2.8 million customer accounts and is celebrated for its exceptional customer experience. It remains one of the highest rated high street banks for overall service quality for personal customers and the best bank for service in-store for personal and business customers, in the Competition and Markets Authority’s Service Quality Survey in August 2023. Metro Bank has also been awarded “2023 Best Lender of the Year – UK” in the M&A Today, Global Awards, “Best Mortgage Provider of the Year” in 2022 MoneyAge Mortgage Awards, “Best Business Credit Card” in 2022 Moneynet Personal Finance Awards, “Best Business Credit Card 2022”, Forbes Advisor, “Best Current Account for Overseas Use” by Forbes 2022 and accredited as a top ten Most Loved Workplace 2023.  It was “Banking Brand of The Year” at the Moneynet Personal Finance Awards 2021 and received the Gold Award in the Armed Forces Covenant’s Employer Recognition Scheme 2021. The community bank offers retail, business, commercial and private banking services, and prides itself on giving customers the choice to bank however, whenever and wherever they choose, and supporting the customers and communities it serves. Whether that’s through its network of 76 stores open seven days a week, 362 days a year; on the phone through its UK-based contact centres; or online through its internet banking or award-winning mobile app, the bank offers customers real choice. Metro Bank Holdings PLC (registered in England and Wales with company number 14387040, registered office: One Southampton Row, London, WC1B 5HA) is the listed entity and holding company of Metro Bank plc. Metro Bank plc (registered in England and Wales with company number 6419578, registered office: One Southampton Row, London, WC1B 5HA) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. ‘Metrobank’ is a registered trademark of Metro Bank plc.  Eligible deposits are protected by the Financial Services Compensation Scheme. For further information about the Scheme refer to the FSCS website www.fscs.org.uk. All Metro Bank products are subject to status and approval. Metro Bank is an independent UK bank – it is not affiliated with any other bank or organisation (including the METRO newspaper or its publishers) anywhere in the world. Please refer to Metro Bank using the full name. Important Notices This announcement has been issued by and is the sole responsibility of the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purpose whatsoever on the information contained in this announcement or on its accuracy or completeness. The information in this announcement is subject to change. Neither the content of the Company’s website nor any website accessible by hyperlinks on the Company’s website is incorporated in, or forms part of, this announcement. This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement does not contain or constitute an offer for sale or the solicitation of an offer to purchase securities in the United States. No securities referred to herein have been or will be registered under the US Securities Act of 1933 (the “Securities Act”) or under any securities laws of any state or other jurisdiction of the United States and such securities may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from or in a transaction not subject to the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. No public offering of securities is being made in the United States. No securities referred to herein, nor this announcement nor any other document connected with the proposed transactions referred to herein has been or will be approved or disapproved by the United States Securities and Exchange Commission or by the securities commissions of any state or other jurisdiction of the United States or any other regulatory authority, and none of the foregoing authorities or any securities commission has passed upon or endorsed the merits of the proposed transactions or the securities referred to herein or the adequacy of this announcement or any other document connected with the proposed transactions referred to herein. Any representation to the contrary is a criminal offence in the United States. This announcement is for information purposes only and is not intended to and does not constitute or form part of any offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for any securities in any jurisdiction. No offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for, any securities will be made in any jurisdiction in which such an offer or solicitation is unlawful. The information contained in this announcement is not for release, publication or distribution to persons in the United States or Australia, Canada, Japan, the People's Republic of China or South Africa, and should not be distributed, forwarded to or transmitted in or into any jurisdiction, where to do so might constitute a violation of local securities laws or regulations. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this release. This release contains certain forward-looking statements, which are based on current assumptions and estimates by the management of the Company. Past performance cannot be relied upon as a guide to future performance and should not be taken as a representation that trends or activities underlying past performance will continue in the future. Such statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from any expected future results in forward-looking statements. These risks may include, for example, changes in the global economic situation, and changes affecting individual markets and exchange rates. The Company provides no guarantee that future development and future results achieved will correspond to the forward-looking statements included here and accepts no liability if they should fail to do so. Neither the Company nor any of its advisers undertakes any obligation to update these forward-looking statements or to publicly release any revisions that may be made to these forward-looking statements, which may result from events or circumstances arising after the date of this release. This release is for informational purposes only and does not constitute or form part of any invitation or inducement to engage in investment activity, nor does it constitute an offer or invitation to buy any securities, in any jurisdiction including the United States, or a recommendation in respect of buying, holding or selling any securities. This announcement is an advertisement for the purposes of the Prospectus Regulation Rules of the Financial Conduct Authority (“FCA”) and not a prospectus and not an offer to sell, or a solicitation of an offer to subscribe for or to acquire securities. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information contained in the combined prospectus and circular published by the Company on 9 November 2023 (the “Prospectus”). RBC Europe Limited (trading as “RBC Capital Markets”), which is authorised by the Prudential Regulatory Authority (the “PRA”) and regulated by the FCA and the PRA in the United Kingdom, is acting exclusively for Metro Bank Holdings PLC and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Metro Bank Holdings PLC for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement. Neither RBC Capital Markets nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client in connection with the subject matter of this announcement, any statement contained herein or otherwise. Morgan Stanley & Co. International plc (“Morgan Stanley”), which is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom, is acting exclusively for Metro Bank Holdings PLC and for no one else in connection with the subject matter of this announcement. Morgan Stanley, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to anyone other than Metro Bank Holdings PLC for providing the protections afforded to clients of Morgan Stanley nor for providing advice in connection with the contents of this announcement or any matter referred to herein or otherwise. Moelis & Company UK LLP (“Moelis & Company”), which is authorised and regulated by the FCA in the UK, is acting as exclusive financial adviser to Metro Bank Holdings PLC and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Metro Bank Holdings PLC for providing the protections afforded to clients of Moelis & Company nor for providing advice in connection with the matters referred to herein. Neither Moelis & Company nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Moelis & Company in connection with this announcement, any statement contained herein or otherwise. Cautionary statement regarding forward-looking statements This announcement contains forward-looking statements, including with respect to financial information, that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe”, “will”, “may”, “should”, “would”, “could”, “is confident”, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this announcement and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the Company’s plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. No representation or warranty is made that any forward-looking statement will come to pass. You are advised to read the Prospectus in its entirety, and, in particular, the section of the Prospectus headed “Risk Factors”, for a further discussion of the factors that could affect the Company’s future performance and the industry in which it operates. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements, including statements regarding prospective financial information, in this announcement may not occur. These statements are not fact and should not be relied upon as being necessarily indicative of future results, and readers of this announcement are cautioned not to place undue reliance on the forward-looking statements, including those regarding prospective financial information. No statement in this announcement is intended as a profit forecast, and no statement in this announcement should be interpreted to mean that underlying operating profit for the current or future financial years would necessarily be above a minimum level, or match or exceed the historical published operating profit or set a minimum level of operating profit. Neither the Company nor any of its advisers is under any obligation to update or revise publicly any forward-looking statement contained within this announcement, whether as a result of new information, future events or otherwise, other than in accordance with their legal or regulatory obligations (including, for the avoidance of doubt, the Prospectus Regulation Rules, the Listing Rules and Disclosure Guidance and Transparency Rules). Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

ISIN:	GB00BMX3W479
Category Code:	MSCH
TIDM:	MTRO
LEI Code:	984500CDDEAD6C2EDQ64
OAM Categories:	2.2. Inside information
	3.1. Additional regulated information required to be disclosed under the laws of a Member State
	3.1. Additional regulated information required to be disclosed under the laws of a Member State
Sequence No.:	288147
EQS News ID:	1784977

End of Announcement	EQS News Service