Metro Bank has completed a £375 million share placing round after strong interest from investors enabled it to exceed an initial target of £350 million placed hours earlier.

The challenger bank has seen its share price under pressure in recent months after a blunder with the classification of commercial loans was uncovered in January, leaving it without the capital it needed to continue with its plans for expansion.

The share placing round was launched at a price of 500 pence per share yesterday evening, but the book offer was increased to £375 million - around 536p a share - “in recognition of the high quality order book”.

It comes after the lender saw its share price fall to an all-time low of 475p a share earlier this week, after it was forced to deny media reports of financial distress which resulted in customers withdrawing funds from their accounts.

Following last night’s capital raise, Vernon Hill, chairman and founder of Metro Bank said: "I am really pleased with the support we have received from both existing and new shareholders, and for their confidence and belief in Metro Bank's strategy.

“Although we've faced challenges in the past few months, we remain fully focused on providing the outstanding service and convenience that our customers expect of us.”

He added: “This growth capital will enable us to continue to expand the business and implement our strategic initiatives."

Following news of the capital raise, the Bank of England’s Prudential Regulation Authority, which has been keeping a close eye on Metro Bank since it uncovered the loans error in January, said it welcomed the steps taken.

“Metro Bank is profitable and continues to have adequate capital and liquidity to serve its current customer base. It has raised additional capital in order to fund future growth,” read a statement.

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