"We are seeking a meeting with the company to understand the steps it is taking to reassure shareholders and improve governance and accounting oversight."
Last night, the Bank unveiled plans to raise the £350m from investors to make up for the shortfall on its balance sheet which occured after it miscalculated the risk level of a large number of commercial loans.
Shares in the bank fell sharply following the announcement and by a further 17.7% this morning, reducing its value from a peak of £3.5 billion to just over £1 billion.
In its full-year results released yesterday, Metro recorded underlying pre-tax profits of £50m for 2018, up 140% year-on-year but below forecasts of £59m.
Ashley Hamilton Claxton, head of responsible investment at Royal London Asset Management, commented: “Governance issues are always the canary in the coal mine. This case is no different. We are seeking a meeting with the company to understand the steps it is taking to reassure shareholders and improve governance and accounting oversight.”
Simon Bittlestone, CEO of Metapraxis, said: “The news of the Metro Bank share slump once again proves that, as in all these accounting misses, management information is simply not up to scratch. The issue isn’t that the bank knew about the mistake and claimed they didn’t; the point is that it should have been spotted far earlier. If the board had access to more effective management information, this situation would have been very easy to resolve.
To avoid making the same mistakes, companies need to promote a greater collaboration between financial and management accounting. If these two parts of the organisation learn to work together and complement one another, the board will have a heightened understanding of the entire business and will know when something’s not quite adding up.”
