By Elisa Martinuzzi, Pablo Mayo Cerqueiro and Iain Withers
LONDON (Reuters) -Britain's Prudential (LON:PRU) Regulation Authority (PRA) is still working with embattled Metro Bank to present a plan by Monday morning that would see the lender bolster its balance sheet or find a buyer, according to a person with knowledge of the situation.
The PRA in recent days invited major UK lenders including HSBC (LON:HSBA) and Lloyds (LON:LLOY) to weigh making an offer for the lender, the person said.
Shawbrook is considering a potential new bid for London-listed Metro Bank after several failed approaches earlier in the year, people familiar with the matter also told Reuters.
The Financial Times reported earlier on Sunday that JPMorgan (NYSE:JPM) had studied a bid for Metro before opting not to proceed, while Sky News reported Santander (BME:SAN) had engaged advisory firm Robey Warshaw to work on a potential offer.
The PRA, HSBC, Shawbrook and JPMorgan declined to comment. Metro Bank, Lloyds and Santander did not immediately respond to a request for comment.
Metro Bank has seen its shares tumble after news emerged that it had hired advisers to shore up its balance sheet after failing to gain key capital relief from banking regulators.
The bank has been exploring options to raise up to 600 million pounds ($734.28 million) of capital through equity and debt injections and asset sales.
Metro Bank said on Thursday its options included a combination of equity and debt issuance, as well as refinancing and asset sales. It said that it met its minimum capital requirements and had not made a decision on fundraising plans.
While Metro Bank's customer deposits, like those of other UK banks, are backed by a government guarantee up to 85,000 pounds, the regulator is keen for concerns not to spread.