Britain's Metro Bank (MTRO.L) is exploring options to raise as much 600 million pounds ($729 million) in debt and equity financing, people familiar with the situation said on Wednesday.
The fundraising could include more than 100 million pounds from selling shares to bolster capital, three of the sources said.
The bank is also looking to refinance existing borrowings and is weighing other options, such as selling assets, to reduce the funding needs, two people said.
Metro Bank recently brought in Morgan Stanley as adviser, the people said.
The Financial Times first reported the size of the fundraising on Wednesday.
The bank's shares dipped last month after the Bank of England's Prudential Regulation Authority (PRA) - its principal regulator - signalled it was unlikely to allow the lender to use its own internal risk models for some mortgages.
Metro Bank is subject to higher capital requirements set by the regulator if unable to use its own models, a concern that has been weighing on the bank's shares.
A spokesperson for Metro Bank did not immediately respond to a request for comment. Morgan Stanley declined to comment.
"The board retains conviction in the merits of Metro Bank's customer-centric model and strongly believes that there is a significant opportunity set that the company can capitalise on, subject to renewed balance sheet strength," Metro said in September.
The Gilinski Group, which holds a 9% stake in Metro Bank, declined to comment.
Metro Bank was valued at 87 million pounds after the close on Wednesday. Shares have lost about two thirds of their value since mid-February.
Metro Bank has 350 million pounds of bonds due in 2025, according LSEG data.
($1 = 0.8240 pounds)
