Metro Bank shares up as much as 26
Colombian billionaire Jaime Gilinski to take majority control
Metro backers face 39;very painful rescue39; analyst

LONDON, Oct 9 Reuters Shares in Metro Bank jumped in early trading on Monday, after the embattled British lender struck a fundraising deal overnight to bolster its balance sheet following urgent weekend talks in the wake of volatile trading.

Metro announced a 325millionpound 396million capital raising exercise and a 600millionpound debt refinancing on Sunday, in a deal that would hand majority shareholder control to its biggest investor, Colombian billionaire Jaime Gilinski.

Gary Greenwood, banking analyst at Shore Capital, said the deal appeared to secure the bank39;s immediate future, but represented a very painful rescue as it entailed a hit for both shareholders and bondholders.

Metro Bank shares were up 26 at 56.9 pence by 0800 GMT.

Metro launched in 2010 to challenge the dominance of Britain39;s big banks but hit a string of setbacks in recent years, such as accounting errors, leadership departures and delayed regulatory approval for key capital reliefs.

The bank39;s stock whipsawed last week on reports that it was trying to raise about 600 million pounds, with the lender later confirming it was exploring its options.

Metro39;s principal regulator, the Bank of England39;s Prudential Regulation Authority PRA, approached a number of major banks last week including Lloyds and HSBC to consider takeover offers…