In its statement, the New York-based firm said it had “agreed to terminate discussions regarding a possible offer for the company”.
In response, Metro Bank said that its board members continued to “strongly believe in the standalone strategy and future prospects of Metro Bank”.
News that the challenger bank had been approached by the buy out firm emerged at the beginning of November when Metro confirmed rumours that Carlyle had made a possible offer to acquire 100 per cent of the share capital.
According to the FT, Metro Bank’s share price has fallen by 97 per cent since their 2018 high giving the bank a market value of £200m.
Chief executive Dan Frumkin set out plans in February 2020 to diversify the bank’s range of products and increase Metro’s returns.
In the mortgage business, Metro has pursued a strategy to grow specialist lending streams. By Q4 2020, specialist mortgages had grown to account for 80 per cent of applications, a reversal since the start of the year when the majority of its cases were mainstream.