Metro Bank is in talks to offload a £3bn mortgage portfolio to Barclays as part of a broader financial restructuring aimed at saving the smaller high street lender from collapse.

Sky News has learnt that Metro Bank has entered exclusive talks with Barclays to sell the residential mortgage book in a move that would strengthen its capital position.

News of the negotiations comes just hours before Metro Bank is expected to announce that its shareholders have overwhelmingly backed a £925m refinancing plan.

The recapitalisation, which has already won approval from bondholders, was announced last month following a weekend of intense talks about a rescue deal.

The £925m package will see the Colombian billionaire Jaime Gilinski Bacal becoming its majority shareholder.

The lender is raising about £150m of new equity and £175m of new debt, while it is also refinancing £600m of existing borrowings.

Metro Bank, which has about 2.7 million customers, became the first new lender to open on Britain’s high streets in over 100 years when it launched in 2010.

It offers current accounts, business accounts, personal loans and insurance products, and employs about 4,000 people, operating from about 75 branches across the country.

Read more from Sky News:
Bank of England should have its remit ‘pruned’ alongside forecasting shake-up
Winter fuel payment: Who is eligible, how much is it and when is it paid?

The bank said last month that deposit outflows had returned to normal levels in the aftermath of the recapitalisation agreement.

Dan Frumkin, Metro Bank’s chief executive, had indicated that Barclays was among the likely suitors for the mortgage book, telling an analyst at the FTSE 100 bank during a conference call: “We have genuine interest  … across a range of names – [one not too] dissimilar to what’s on your pay cheque.”

A deal is likely to be struck by the end of the year.

Barclays and Metro Bank both declined to comment.

Related posts:

Pub giant Wetherspoon looks to keep on all 37,000 furloughed staff Pandemic strain pushes Dignity into the red despite record year for funerals Couture designer Ralph & Russo on brink of administration No stampede for the office as ‘Freedom Day’ is dominated by caution Government orders national security and competition probe over $40bn Arm takeover Sage hits £1bn cloud sales – but the UK software giant divides opinion among investors Kellogg’s loses legal challenge against new government food rules for high-sugar cereals Premier League seeks clubs’ backing for gambling sponsor ban Next swoops for big stake in struggling lifestyle retailer Joules Citymapper in talks about takeover by New York-based transport tech giant Via Buyout titan CVC screens rival offer for Cineworld assets Water firm performance penalties mean many households will see bills cut