Metro Bank says customers’ money safe after WhatsApp rumour sparks panic

Lender denies ‘false rumours’ on social media that prompt customers in London to queue up to withdraw cash

Queues at a Metro Bank branch in Harrow after rumours spread on social media

Metro Bank has been forced to quash “false rumours” on social media that prompted customers to rush to some branches amid concerns that the lender may be running out of money.

Hundreds of Metro Bank customers queued outside some west London branches over the weekend, prompted by WhatsApp messages advising people to withdraw money from accounts and safety deposit boxes.

Rumours circulated on community WhatsApp groups in London claiming that Metro Bank was trying to take ownership of customers’ possessions.

Panic began to spread as photos were posted on Twitter showing customers queueing to access their accounts.

The bank repeatedly responded on social media with the message: “Metro Bank remains a safe and secure haven for our customers’ money.”

It then issued a statement saying: “We’re aware there were increased queries in some stores about safe deposit boxes following false rumours about Metro Bank on social media and messaging apps.

“There is no truth to these rumours and we want to reassure our customers that there is no reason to be concerned.”

Metro Bank said it is in final discussions over plans to raise £350m of equity by the end of June. Details of the fundraising are expected to be revealed this week.

The new funds are to cover an accounting error that saw the bank underestimate the amount of cash it needed to hold to cover the risk some of its loans.

Despite the assurances Metro Bank’s share price dropped as much as 9 per cent on Monday before recovering to trade 5 per cent down.

In an interview with the Financial Times, chief executive Craig Donaldson revealed that Metro Bank is looking at selling £1bn worth of loans at the centre of the problems.

Russ Mould, investment director at AJ Bell said: “Having hundreds of customers queue up to withdraw money certainly hasn’t helped matters, particularly as the business is in the process of trying to raise £350m to alleviate concerns about its balance sheet.

“Chatter on social media that customers’ money wasn’t safe spiralled out of control at the weekend, with memories of the run on Northern Rock in 2007 still in many people’s minds.”

Pre-tax profits slumped to £6.9m in the first quarter from £10m a year ago, while shareholders have also been urged to vote against the re-election of chairman Vernon Hill.

Mr Hill has come under fire for the accounting blunder and for millions of pounds of company money paid to his wife’s architecture firm InterArch

Michael Hewson, chief market analyst at CMC Markets, said: “It is highly probable that shareholders will insist on some management changes as a quid pro quo for any new capital, with chairman Vernon Hill, as well as chief executive Craig Donaldson, in the firing line of some investors, on the back of a share price dive from £35 12 months ago to under £5 now.”