The situation affecting Metro Bank at present has left many customers worried about the safety of their money, but what's actually going on, and is there really cause for concern? We take a look.
It all started with hoax WhatsApp messages sent to users last week, which instructed customers to empty their accounts and safety deposit boxes "as soon as possible", claiming that the bank was "facing a lot of financial difficulties and may be shut down or going bankrupt". While this was later proven to be false, with Metro Bank denying that customers need to be worried, the short-term result was that may customers queued outside branches over the weekend to do as initially instructed.
This sent the share price of Metro Bank tumbling, with it hitting a new low of 475p per share on Monday. The latest setback follows an earlier crisis in January when a major accounting error was revealed – which is currently being investigated by the financial regulators – which had already caused share prices to plunge by around 80%.
That said, Metro has continued to insist that everything is as it should be and that it's on firm financial footing, saying it has an adequate financial buffer to cope with the accounting error. It's also pressing ahead with plans to raise £350m of equity capital to fund further growth, and confirmed on Monday that this plan was "well advanced" and that feedback "continues to be positive".
The recent issues the bank has been facing have understandably left many consumers rattled, despite the fact that the WhatsApp warnings proved to be a hoax. Many want reassurance that their money and any property held in safety deposit boxes continues to be protected, and the overriding message is this – everything's still covered, at least as far as it can be given current rules.
Metro Bank has reassured customers that it will never take ownership of the contents of safety deposit boxes, with everything remaining the property of the customer in question. When it comes to cash held in any of Metro Bank's accounts, the rules are slightly different – while everything is of course still yours while the bank is operating, the financial protection you'll get in the event that Metro did become insolvent is determined by the Financial Services Compensation Scheme (FSCS).
The FSCS protects funds of up to £85,000 per person per banking licence, so if your savings held within Metro are less than this, you can rest assured that your money will be returned to you should the bank get into difficulty. If, on the other hand, you've got more than this limit held with the bank and are worried about the latest speculation, you may want to split your funds between other institutions to ensure full protection. You can find out more about depositor protection schemes here.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.