Barclays has opened negotiations to acquire embattled lender Metro Bank’s £3bn residential mortgages portfolio, Sky News reported last night.

A deal is likely to be struck by the end of the year, the report added. But both Barclays and Metro Bank declined to comment.

Metro Bank recently announced a £325m capital raise and £600m debt refinancing in early October, in a bid to bolster its finances after a string of setbacks in recent years, including accounting errors, leadership departures and delayed regulatory approval for key capital relief.

Last month, Santander’s chief executive officer Hector Grisi had said the Spanish bank may consider looking into acquiring a mortgage portfolio from Metro.

Separately, Barclays is exploring a potential acquisition of Tesco’s banking operations, it was reported earlier this month.