Metro Bank Share Discussion Threads

[diku] 30/1/2019 15:50

1000p soon?..

[chucko1] 30/1/2019 15:48

I don’t work it to be 1.00 - Bloomberg does.

I’m not fussed about the cost of the stores. If they are creating assets with diminishing margins the timing of costs is transient. The asset margins are not.

[tsmith2] 30/1/2019 13:20

Also if you heard/read transcript you will see that a lot of their costs for new stores are obviously front loaded and they've been very very active in opening new stores, clearly these have short term impact on profitability and capital.

[tsmith2] 30/1/2019 13:18

How do you work it to be 1.00 at 12.40?

[chucko1] 30/1/2019 13:17

Yes, it may well be justified. At a price of 1240p, the price/book is EXACTLY 1.000.

For Lloyds Bank, it is currently 0.867. For Barclays, it’s 0.53, RBS is 0.70 and HSBC is 0.92.

They need the capital to grow. If they don’t grow, they get stuck with a cost to income ration of 93%. That’s really high. If they raise capital and grow, there is the further risk of margin pressure.

I think the best outcome is a share price treading water for quite a while.

[prince7652] 30/1/2019 13:11

Wait for the capital raise

[tomboyb] 30/1/2019 12:16

Taking a hell of a beating -

Is it justified to this level? -

[ny boy] 30/1/2019 11:57

Will be interesting to see if this has a bounce if May achieves a satisfactory conclusion to the withdrawal agreement over the coming weeks.

[kemche] 30/1/2019 11:33

ts, You have clients??? Now there's a thing!

[prince7652] 30/1/2019 11:33

Capital raising for sure

[tsmith2] 30/1/2019 11:31

I think they are as good as anyone else's. I have a decent number of clients who are with metro increasingly more from a day to day banking perspective too

[future financier] 30/1/2019 11:22

tsmith2 - yes MTRO are good at piling on the loans (and this will create the perception that they are doing well at the operational level) - but what is the quality of those loans. I refer you to my previous posts - in particular no. 60.

That said, my gut reaction is that these represent an interesting opportunity at this level ........

[tsmith2] 30/1/2019 11:00

Also JP Morgan who haven't ever been big fans of metro have TP 1300.This is capitulation imo.

[tsmith2] 30/1/2019 10:58

Shorts a crowded trade..And if you ask around metro doing well at an operational level..

[ny boy] 30/1/2019 09:55

As I mentioned last week, best wait for the dust to settle, difficult catching falling knives, too many mini bull traps/dead cat bounces

Difficult to seek a bottom here, I will wait until The Spring to see where we are at, until then adding more SFOR,STX and buying VOD soon dyor as usual.

[chucko1] 30/1/2019 09:15

Yes, so they are constructive, aren’t they? Same as when the shares were issued and many other periods ther after. What’s it amounted to? - total incompetence (RWA) and an asset profile which has its best days behind it.

The more interesting conference call is Odey’s - he regards Metro as probably his second favourite short in his entire career. He’s already made 60% or more on it, and increased his short after the debacle of last week. I guess, perhaps, he must have “missed the Metro conference call”, otherwise he would have cut his short? Is that what you are arguing?

So, it’s mad for the share price to be trading below book? If the market has worries about the asset quality and, more worryingly, funding levels attainable, then even 50% of book is plausible. Barclays has been at those sorts of levels for years, as has RBS (though that’s a result of 2008 which Metro has not suffered, of course), so it shows what such worries can inflict.

Don’t underestimate the carnage which bad management can inflict upon a leveraged organisation. In my opinion, the management of MTRO looks like it might challenge investors to keep believing.

[tsmith2] 30/1/2019 09:02

Trading at a significant discount to book, mad.have you read the company's conference call transcript?

[chucko1] 29/1/2019 16:39

Also, not sure where you got the information about Odey reducing their short. Yesterday evening it was announced that they had increased it to 2.82%. Marshall Wace added to their short also. To do this after a 50% fall in a few months does not mean they dislike MTRO - it means they detest it.

Not all shorters are correct, however - by any means. But Odey’s long awaited return to form of last year (+50% or so in the hedge fund) was entirely due to good stock selection, both long (Sky and others) and short (Metro and others).

[chucko1] 29/1/2019 16:22

Which conference call? The MTRO one or the Odey one!!

[tsmith2] 29/1/2019 14:42

I think you should read the transcript from the conference call..

[chucko1] 29/1/2019 14:22

Could the person who downvoted the last post by Prince7652 explain why? Are you in denial, or somehow else emotionally unable to deal with the extremely poor outlook for MTRO?

As I see it, the various negative posts the past week explained why they were forming this view and in any event, are also the views of Odey and JP Morgan, to name just two. Does not mean they are correct, necessarily, it at least means they are reasonably thought through.

[prince7652] 29/1/2019 13:31

Looks like needs to raise more capital

[ny boy] 29/1/2019 09:12

Nasty bull traps by the looks of things, right back to adding more (STX) after today’s news. Dyor as usual

[future financier] 29/1/2019 08:21

Just preparing for the inevitable rights issue ....?

[tsmith2] 29/1/2019 08:16

Any reasons we should be off 5%?