Thursday 22 August 2019

Metro Bank shareholders approve £375m fundraising move

More than 92% of shareholder votes were made in favour of the deal at its general meeting on Monday.

Metro Bank staved off a shareholder revolt after the company’s annual general meeting last week (Nick Ansell/PA)
Metro Bank staved off a shareholder revolt after the company’s annual general meeting last week (Nick Ansell/PA)

By Henry Saker-Clark, Press Association City Reporter

Metro Bank shareholders have approved the retail bank’s £375 million fundraising deal, after it raised cash to drive its recovery following a major loans blunder.

The high street bank’s backers threw their support behind the discount share sale, which raised more than its original £350 million target.

More than 92% of shareholder votes were made in favour of the deal at its general meeting on Monday.

The equity raise followed an accounting error in January which left the bank short of the capital it needed to grow.

The lender, which had 67 branches in London and the South East, said in January that it had under-reported the risk element on some loans by almost £1 billion.

It later revealed a hit to profits and suffered a subsequent 75% decline in share price since the start of the year.

The Bank of England gave the lender a clean bill of health after the new equity was secured.

Despite securing the new funding, the bank saw shares dive by 8% to 629p on Monday, after The Sunday Times reported that it has stopped lending to new commercial real estate customers in recent weeks.

Metro Bank staved off a shareholder revolt after the company’s annual general meeting last week, as more than 20% of shareholders cast votes against its remuneration report.

A fifth of shareholders registered their anger by voting against executive pay plans which will give chief executive Craig Donaldson a £750,000 pay packet, chief financial officer David Arden a £405,000 pay packet and Metro Bank founder Vernon Hill a £385,000 pay packet.

Shareholders vented even greater frustration against directors Stuart Bernau and Gene Lockhart, who each saw about 28% of shareholder votes made against their re-election.

Last month the lender was also forced to quash rumours of fresh financial trouble after warnings spread across social media.

The bank said the rumours were false after concerned customers rushed to branches in London to withdraw cash and safe deposit boxes.

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