The Bank of England said Metro Bank had presented an inaccurate picture of its regulatory capital position to the Prudential Regulation Authority
Metro Bank (LSE:MTRO) PLC was fined £5.37mln by the Bank of England (BoE) over failures in the regulatory reporting of its capital position between May 2016 and January 2019.
On 23 January 2019, Metro Bank (LSE:MTRO) announced it was making a £900mln adjustment to its assessment of its risk-weighted assets (RWA) for December 2018 after having applied the incorrect risk weighting to certain commercial loans.
The BoE’s Prudential Regulation Authority (PRA) said in a statement the incorrect risk-weight meant the bank had presented an inaccurate picture of its regulatory capital position to the PRA.
“We expect firms to invest appropriate and adequate resources to ensure that they submit accurate regulatory returns,” said Sam Woods, deputy governor for prudential regulation and chief executive officer of the PRA.
“In this case, Metro Bank failed to meet the standards of governance and controls expected of it, resulting in today’s enforcement action.”
Metro Bank pursued a rapid growth and expansion plan in the years before the accounting error was announced in 2019. However, during this period, the bank failed to develop adequate regulatory reporting governance and controls, the PRA said.
Metro Bank agreed to resolve the matter and therefore qualified for a 30% reduction in the fine imposed by the PRA. Without the discount, the fine would have been £7.68mln.
In a separate statement, Metro Bank said it has made “significant improvements to, and substantial investment in” its regulatory reporting processes and controls since the RWA errors were identified.
Metro Bank’s shares have fallen by over 90% since January 2019. The stock plummeted last month after US private equity firm Carlyle ended potential bid talks.
Shares rose 1.14% to 88.95p in midmorning trade.
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