Metro Bank fined £10m by City watchdog
Metro Bank has been fined £10m by the Financial Conduct Authority (FCA) for publishing incorrect information to investors.
The issue relates to the London-listed challenger bank’s third-quarter results announcement on 24 October 2018.
Metro Bank published incorrect Risk Weighted Assets (RWA) figures on which its regulatory capital requirements are based.
“Metro Bank was aware at the time that this figure was wrong and failed to qualify it or explain in the October announcement that it was subject to an ongoing review and would require a substantial correction,” the FCA said.
“Metro Bank also failed to consider, and to seek legal advice on, whether the incorrect RWA figure ought to be qualified or explained in the October announcement. As a result, Metro Bank failed to take reasonable care to ensure that the October announcement was not false and misleading and did not omit relevant information.”
The FCA has also decided to fine Metro Bank’s former chief executive Craig Donaldson and former chief financial officer David Arden £223,100 and £134,600, respectively, for being “knowingly concerned” in Metro Bank’s breach.
Read more: Metro Bank narrows losses as RateSetter loans breach £1bn
“Listed firms must ensure that the information they are disclosing to the market is right,” said Mark Steward, executive director of enforcement and market oversight at the FCA.
“This is what investors are entitled to receive.
“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.”
Metro Bank said that it has cooperated fully with the FCA investigation and accepts the outcome.
“Since 2018, 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 in a stock exchange announcement.
“The conclusion of these proceedings and of the Prudential Regulatory Authority’s investigation in December 2021 brings the RWA legacy issues to a close.”
The RWA issues took place two years before Metro Bank acquired former peer-to-peer lender RateSetter.
Read more: Exclusive with Rhydian Lewis: A moment in time
On 14 September 2020, Metro Bank announced that it had completed its acquisition of RateSetter in a deal worth an initial consideration of £2.5m, with £9.5m paid out after the completion of the deal.
RateSetter founder Rhydian Lewis is now head of consumer lending at Metro Bank.