Sign of the times: Run on UK bank triggered by a rumour on WhatsApp

Metro Bank first opened its doors in the UK in 2010 and was the first high street bank to open in England in over 100 years. Founder Vernon Hill had built the Commerce Bank in the US from one branch to 440 and sold it for $8.5 billion in 2007.

A rumour on WhatsApp that Metro Bank — one of the most common sights on the British high street — has led to a run on the bank, with hundreds of customers queuing up to withdraw their money.

The messages began circulating in west London community WhatsApp groups on May 11, and people started queuing up to withdraw funds from the bank, which was the first to introduce seven day opening to Britain.

Metro Bank branch in Harrow packed with people trying to withdraw funds pic.twitter.com/KXLv954jIX

— Patrick O'Brien (@pat_gdretail) May 11 2019

Metro Bank spokesman Abigail Whittaker said it was very localised.

@Metro_Bank what's the reports about your financial health and potential bankruptcy? I'm looking at pulling out all my cash from you guys unless we get clarification ASAP. How safe is the money? #bank

— Raakesh Savji Parmar (@Raakwork) May 11 2019

"We're aware there were increased queries in some stores about safe deposit boxes following false rumours about Metro Bank on social media & messaging apps. There is no truth to these rumours and we want to reassure our customers that there is no reason to be concerned," Ms Whittaker told the Evening Standard newspaper.

The messages on WhatsApp suggested customers go down to their Metro Bank branch and withdraw their belongings from safety deposit boxes, because the bank was supposedly trying to take ownership.

Some text message went around to all Tamils saying Metro Bank is going bankrupt and it is currently FULL of Tamils trying to take their jewellery out looooool

— pow (@_MithraBala) May 11 2019

The Sri Lankan Tamil community in north and west London, which apparently deposits large amounts of family gold at the bank, was particularly spooked.

The bank's shares have plummeted by 75 percent since January after it unveiled plans to raise money to plug a funding gap left by an accounting error.

As someone with money in Metro Bank.. I'm now on the horns of a dilemma do I make things worse by joining the mini run on the bank or do I risk having to deal with FSCS if they go down..?

— Simon (@LDNCalling) May 13 2019

On Sunday, May 12, Metro Bank said its plans to raise an extra £350 million to strengthen its finances were "well advanced".

The bank's chief executive, Craig Donaldson, told the Financial Times it was considering selling on more than £1 billion of loans which had been affected by the accounting error.

The last major run on a UK bank was in 2007 when customers of Northern Rock began queuing up to withdraw their money after dire reports emerged of the building society's financial situation. Eventually, the UK government stepped in and effectively nationalised it.

Sputnik