Will an acquisition take Metro Bank to the next level?
Metro Bank’s shares jumped following the news of a takeover approach by Pollen Street Capital – a move that would remove the company from the London Stock Exchange and see it potentially merge with Shawbrook, a specialist business lender.
It means it’s a good time to assess where Metro Bank currently stands with the British public. Data from YouGov BrandIndex suggests that it has some catching up to do with the wider sector. Metro Bank’s Impression score – a net measure of general positive and negative sentiment towards a brand – sits at 1.8. This compares to a sector average of 6.9 for banks and building societies that operate in the UK.
It’s a similar story across other measures. Metro Bank’s Quality scores are at 1.8 while the average for the sector as a whole stands at 6.7 and the brand’s Customer Satisfaction score sits at 1.0 next to a score of 5.0 for banks and building societies overall. The distance is narrower when it comes to perceptions of Metro Bank’s Value (1.2) compared to the competition (3.0) but there is still a gap.
Why is Metro Bank notably behind the sector as a whole? One straightforward answer may be that there is a particularly strong competitor set in the retail banking sector, with many of the incumbents having had centuries to build up their positions. After all, Metro Bank’s metrics are still net positive overall, despite being worse than the wider industry’s.
It is also facing newer challengers such as Monzo. While Metro Bank was a pioneer in 2010 when it became the first company granted a new UK banking licence for 150 years, digital-only providers such as Monzo may have staked a claim on the same territory in the market. Continuing to occupy a space between traditional banks and app-only upstarts may leave it looking to consumers like it is neither fish nor fowl. In this context, an acquisition may provide an opportunity for some clarity – and help take Metro Bank to the next level.
This article originally appeared in City AM.