Financial Services

Metro Bank fined €11.6m for misleading investors on risk levels

Former chief executive and chief financial officer appealing financial penalties over incident

Metro Bank and two of its former senior managers were hit with penalties by the UK’s financial watchdog for knowingly misleading investors. Photograph: Mike Egerton/PA

Mon Dec 12 2022 - 15:22

Metro Bank and two of its former senior managers were hit with penalties by the UK’s financial watchdog for knowingly giving investors misinformation linked to the lender’s capital adequacy.

Metro Bank was fined £10 million (€11.6 million) after it published incorrect information on its risk-weighted assets, an important measure for regulatory capital requirements, in its third quarter trading update on October 24th, 2018, the Financial Conduct Authority (FCA) said on Monday. The regulator said the bank knew the figure was wrong and failed to qualify or explain it.

Craig Donaldson, former chief executive of the bank, and ex-chief financial officer David Arden were provisionally fined £223,100 and £134,600 respectively for being “knowingly concerned of the breach”, the watchdog said. The pair have referred their case to a tribunal to decide whether to uphold the fines, but the bank has not.

What will the easing of bankers’ pay restrictions do for competition dynamics?

Listen | 46:27

“The UK’s listing rules impose high standards on issuers and their officers which Metro Bank, Mr Donaldson and Mr Arden failed to meet in this case,” Mark Steward, executive director of enforcement and market oversight, said in the statement.

READ MORE

Metro Bank said in a statement it co-operated fully with the FCA investigation and will not dispute the outcome. The fine is within the range outlined at the company’s full year 2021 results and has been fully provided for, the bank said.

“Metro Bank has completed extensive remediation activity and made substantial investment to improve its disclosure procedures as well as enhancing its regulatory reporting processes, risk management framework and governance and compliance culture more broadly,” it said. – Bloomberg

LATEST STORIES