© Reuters.

Metro Bank, a UK-based challenger bank, is currently grappling with a severe financial crisis, marked by a drastic fall in its share prices and two subsequent trading suspensions on the London Stock Exchange (LSE). The bank’s shares tumbled over 29%, causing significant concern among investors as its value has declined by nearly two-thirds since mid-February. This steep decline led to two temporary halts in trading through LSE’s circuit breaker mechanisms, implemented to limit extreme volatility.

On Thursday, following the resumption of trading after the second suspension, an unusually high volume of 1.6 million shares were traded. This intensified trading activity reflects the market’s heightened attention to Metro Bank’s predicament.

The bank’s financial woes were further exacerbated after UK regulators expressed disapproval of Metro Bank’s mortgage business plan. In response to these challenges, Metro Bank announced plans to raise £600 million ($727 million) in debt and equity, indicating its continued competition with banking giants such as Barclays and RBS (LON:).

Adding to the bank’s troubles, credit rating agency Fitch placed Metro Bank on negative watch amidst the crisis. The bank is also considering refinancing a $424 million debt as part of its strategy to navigate through its current difficulties.

The bank’s recent struggles are not isolated incidents. Earlier this year, Metro Bank was embroiled in a misreporting scandal leading to the exit of its chair and chief executive. This series of events has put Metro Bank’s future path under intense scrutiny by investors and market spectators alike.

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