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Metro Bank’s share price has climbed to its highest level since November last year, even with some negative news hitting the company. The stock has surged over 67% from its lowest point this year, making it the top-performing UK bank stock. It’s outpaced other major banks like Lloyds, HSBC, and Barclays.
Recent news hit Metro Bank on Monday when the Financial Conduct Authority (FCA) slapped it with a significant fine. The FCA ordered the bank to pay £10 million for misleading investors, following one of the biggest accounting scandals. In 2019, the bank’s share price plummeted by more than 50% in a single day due to these allegations.
The FCA also required the bank’s former CEO and CFO to pay £223,000 and £134,000, respectively. Despite these penalties, the stock rose as the bank wrapped up one of its toughest periods. Historically, stocks often rebound after major investigations are concluded.
Looking ahead, the next big event for Metro Bank’s share price will be the Bank of England’s (BoE) upcoming interest rate decision. Economists are predicting a 0.50% rate hike to tackle soaring inflation, which reached over 10% in November.
Metro Bank benefits from high interest rates due to its business model. Unlike Barclays, it doesn’t engage in investment banking, which has struggled this year. Instead, Metro focuses on consumer banking services like savings, mortgages, and business banking, which thrive when interest rates rise.
The daily chart shows that Metro Bank’s share price has been on a strong upward trend recently. It has broken through the key resistance level of 97.2p, which was its highest point on August 10. Additionally, the stock has formed a golden cross pattern, with the 50-day and 200-day moving averages crossing in a bullish sign.
If the stock continues to rise, the next major resistance level to watch is 130p. However, if the price drops below the support level of 100p, the bullish outlook could be challenged.