CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Metro Bank share price outlook: how low can it go?

With pressure mounting on the UK challenger bank, short sellers continue to raise their bets against Metro Bank.

Metro Bank shares have fallen dramatically since the start of the year, with the lender’s balance sheet under increased pressure as a result of the Covid-19 outbreak, prompting short sellers to raise bets against the UK challenger bank.

ENA Investment Capital, GSA Capital Partners and Odey Asset Management all upped their short positions against the stock last week, with 8.04% of Metro Bank shares held by short sellers, according to data compiled by the UK Financial Conduct Authority.

Shares in Metro Bank are down 56% year-to-date, with the stock underperforming the broader market with the FTSE 250 down 28% over the same period.

UK bank stocks under pressure amid Covid-19 crisis

Metro Bank isn’t the only UK lender struggling as a result of the economic fallout from the Covid-19 crisis.

Its larger rivals like Barclays, Lloydsand Royal Bank of Scotland (RBS) have all seen significant downward pressure applied to their respective share prices in 2020, with the three lenders down more than 46% year-to-date.

The latter of the three saw its first quarter (Q1) profit halved due to the lender allocating £802 million to cover a spike in bad loans as a result of the Covid-19 crisis.

However, it is worth noting that despite RBS reporting a significant decline in quarterly profit, the lender did manage to beat analysts’ forecasts due to a 9% rise in income from its investment banking unit NatWest Markets due to increased market volatility.

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CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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