Metro Bank has raised £375m from a fundraising call that will strengthen its balance sheet. The bank hopes the move will quash rumours about its financial health that led to customers withdrawing cash last weekend.

A Metro Bank spokeswoman confirmed the lender had closed its share placing early on Thursday evening, less than three hours after it started.

The fundraising was increased from the £350m originally sought due to the interest from investors, the spokeswoman added. Shares jumped 22% when markets opened on Friday to 646p.

The challenger bank offered shares at a price of £5 each, 14% below the stock’s closing price on Wednesday. It was a steep discount to the £22 a share investors would have paid before the bank revealed a major accounting mistake in January.

Vernon Hill, Metro Bank’s chairman and founder, said on Friday he was pleased with the support from investors.

He added: “Although we’ve faced challenges in the past few months, we remain fully focused on providing the outstanding service and convenience that our customers expect of us. This growth capital will enable us to continue to expand the business and implement our strategic initiatives.”

Hill helped prop up the bank’s fundraising efforts by buying 1m shares, worth £5m.

Earlier, Metro said it expected to complete the fundraising by Friday afternoon and that its “capital position will be strengthened” by the extra cash, helping it to increase its loans book. The funds will also be used to invest in new branches and technology.

The lender has been feeling pressure from low interest rates, tough competition and regulatory requirements, it said.

The Bank of England’s Prudential Regulation Authority, which is in charge of financial stability, said it welcomed the steps taken by Metro Bank to raise extra capital. It added that “Metro Bank is profitable and continues to have adequate capital and liquidity to serve its current customer base”.

The bank has been grappling with a cocktail of bad news since it announced it had miscategorised £900m-worth of commercial and buy-to-let property loans as being lower risk than they actually were.

Banks are required to put aside more capital to cover their riskier products in order to ensure they are protected in the event of a sudden downturn. Metro’s mistake prompted investigations by the Financial Conduct Authority and the Prudential Regulation Authority.

The bank then spooked markets in February, when it announced plans to raise the £350m in fresh funding despite ruling out further cash calls last summer when it raised £300m from investors.

That was followed by disappointing first-quarter results, which included a 50% drop in profits, and news that some large business customers had pulled funds after the accounting blunder.

The run of negative headlines led to rumours circulating on social media about Metro’s financial strength.

One message on WhatsApp urged anyone with a Metro account or safety deposit box to “empty [them] as soon as possible”, claiming the lender was facing financial difficulties and may be “shut down … or going bankrupt”.

While Metro said the messages amounted to “false rumours”, the panic caused customers to queue in at least six branches in west London last weekend, with most trying to access jewellery, documents and gold stored in safety deposit boxes.

Metro confirmed on Thursday that customers also withdrew cash, but did not say how much.

“As may have been expected, Metro Bank experienced a short period of deposit net outflows following the intense press speculation between 10 and 13 May 2019,” it said in its fundraising statement. “The position is stabilising.”

Metro shares are down more than 75% since the accounting mistake was revealed in January. Its second largest shareholder, Fidelity, recently cut its stake by a third.

The next flashpoint for the bank will be its annual shareholder meeting in London on Tuesday. Legal and General Investment Management, the UK’s biggest asset manager, made a rare move on Friday to publicly announce plans to vote against the re-election of Hill next week.

It comes after the shareholder advisory firm Glass Lewis urged investors to reject Hill’s bid for re-election over the accounting error. Fellow advisory firm ISS has recommended shareholders reject the lender’s pay report and abstain from votes to re-elect Hill and Metro’s chief executive Craig Donaldson on similar grounds.

Donaldson has given up his £800,000 bonus over the accounting error, but so far no senior executives or board members have been shown the door.

It is the second straight year Metro has faced a shareholder revolt. Last year, the lender avoided a rebellion over multimillion pound payments to the architecture business of Shirley Hill, the wife of the bank’s chair.