The challenger bank has been approached informally over the last fortnight by investment firm Pollen Street Capital about a buyout, Sky News first reported on Saturday. 

Talks are understood to be at an early stage and there is no certainty of a deal. 

Pollen Street has a stake in Shawbrook Bank along with private equity rival BC Partners. 

Any deal may see Metro Bank lose its stock market listing. 

Shares in Metro Bank lifted 13% to 126.4p valuing the business at £853m in mid-morning trading, around half of its peak value. 

Metro Bank had a retail mortgage loan, which fell 34% to £5.1bn after portfolio disposals at the end of last year. 

Pollen Street has stakes in a number of UK financial services firms, including Pivotal Growth, a mortgage broker buyout vehicle, formed with LSL Property Services. 

A deal with Pollen Street could open the door for a deal between Metro Bank and Shawbrook.  

Metro rejected a bid from Shawbrook in 2023 when it sought emergency funding. 

Shawbrook has a retail home loans arm, which contains The Mortgage Lender and Bluestone Mortgage, with a loan book standing at £4.4bn at the end of last year. 

It also has a real estate division, which sells other landlord, bridging and commercial mortgages with a £6.8bn loan book according to its 2024 annual report. 

Metro Bank became the first new high street bank in the UK for a century when it opened its flagship branch in 2010 and listed on the London market in 2016 at a £1.6bn valuation, However, it has faced several regulatory setbacks in recent years. 

In November 2023, the lender was rescued through a £925m deal comprising £325m of equity — a third of which was contributed by Jaime Gilinski Bacal, a Colombian billionaire – and £600m of new debt. 

Gilinski Bacal now holds a near-53% stake through his investment vehicle, Spaldy Investments, and sits on the company’s board. 

And in 2019 Metro Bank admitted that it had misclassified a number of commercial loans, meaning it did not hold sufficient capital.  

This forced the lender into a £350m share issue, while the Financial Conduct Authority and the Prudential Regulation Authority launched investigations. 

Metro Bank and Pollen Street have made no comment.