Speculation that Metro Bank may need to raise emergency capital sent shares plummeting so fast that trading in the British challenger bank had to be briefly halted on Thursday.
The bank, founded by American billionaire Vernon Hill 13 years ago, suffered a drop of 29% at one point, triggering automatic circuit breakers employed whenever a share price sharply falls or rises above a certain threshold.
In an email to Fortune, the London Stock Exchange Group confirmed it had temporarily suspended trading in order to find a fair price for Metro Bank’s shares amid the abrupt volatility.
Buying and selling has since resumed, but the stock has recovered only a very small portion of the losses incurred earlier in the session, with the lender down 26% at 9 a.m. ET on Thursday.
The selloff came after British news outlets reported Metro Bank was weighing up ways to raise hundreds of millions of dollars from investors to bolster its finances.
Sources told news agency Reuters earlier this morning that the bank was exploring options to raise up to £600 million ($728 million) in debt and equity financing to give its balance sheet a boost.
A spokesperson for Metro Bank did not respond to Fortune’s request for comment.
Since the beginning of the year, Metro Bank shares have shed almost 70% of their value, sending the company’s market cap nose-diving to £87 million—a far cry from the £3.5 billion valuation it was given at its peak in 2018.
A large proportion of those losses came over the past month after the Bank of England rejected the lender’s request to use its own internal models to assess residential mortgage risk—the latest in a string of problems being faced by the bank in recent years.
Hill forced to step down as chairman in 2019 over accounting error
Metro Bank was founded by U.S. billionaire Vernon Hill in 2010, making it the first new Main Street bank to open in Britain in a century. Around the time of Metro Bank’s launch, Fortune labeled him a “flamboyant, tradition-stomping American billionaire” in a profile of the entrepreneur.
While competitors were cutting their networks, Metro Bank—known for its distinctive blue and red logo and offering visitors free lollipops and dog treats—grew rapidly thanks to promising in-person customer service outside the industry’s usual business hours.
It built upon the ethos of Hill’s stateside offering, Commerce Bancorp, which he founded and ran from the 1970s until 2007. He left Commerce when regulators began investigating real estate transactions involving some of his relatives.
Hill stepped down as Metro Bank’s chairman in 2019 following a major accounting error that led to customers withdrawing £2 billion in deposits from the lender over a six-month period and shareholder criticism over the bank’s ties to his wife’s architecture and design firm, InterArch.
Last year, Hill was ousted as CEO of Philadelphia-based lender Republic First after causing division among the bank’s board of directors over his push for expansion.
As he announced his departure from Republic First, Hill said he was “proud of all that was accomplished” under his leadership, and attacked a faction of the board for “serving their own narrow interests instead of those of the shareholders.”
