Metro Bank taps investors for another £350m

Boss offered to quit after Mail revealed truth over accounts blunder

METRO ADMITS TRUTH OVER LOANS ERROR From the Mail, January 31

THE boss of Metro Bank is giving up his annual bonus over an accounting error which triggered claims he had misled the market.

Craig Donaldson told the Mail he had offered to resign after the debacle, but this was rejected by the board.

Instead he is forfeiting his 2018 bonus to make amends.

The year before, Donaldson was given a bonus of £800,000.

It came as Metro unveiled plans to raise another £350m from investors – sending shares down 15.8pc, or 243p, to 1300p.

The bank also announced 2018 profits of £40.6m, more than double the £18.7m it generated a year earlier.

And in a bid to reassure investors that further cash will not be needed, Metro has vowed to slow the pace of new branch openings and reduce the speed at which it brings in more deposits.

Donaldson said: ‘ The last few weeks have been a really, genuinely chastening experience – I did offer to resign, and the board wanted to support me and continues to support me.

‘I’ve asked the remuneration committee to waive my bonus for 2018. I’m not proud about what happened. What I want to do is ensure this organisation continues to focus on the strengths that are at its core.’

Metro stunned markets last month by revealing it had underestimated the riskiness of some property loans.

Donaldson ( pictured) originally claimed this problem was discovered by Metro’s own staff, but the Mail revealed it had in fact been spotted by regulators at the Bank of England.

It prompted calls for Donaldson to quit amid claims he had misled the market.

Last night’s fundraiser was the fourth time Metro has sought cash from the markets in just three years, with £1.2bn raised since 2017.

Metro was founded in 2009 by US billionaire Vernon Hill – who serves as its chairman – becoming the first new British bank in more than a century.

It has focused on opening large branches in prominent spots on the High Street, and attracted legions of customers with gimmicks such as safety deposit boxes and coin counting machines.

Hill, who made his first fortune from fast food and owns New Jersey’s largest mansion, has also promoted the lender by making his terrier Sir Duffield II its mascot.

But Metro has also been dogged by questions over its finances.

It sucked in £ 278m from investors in 2017 to fund breakneck expansion, then nabbed another £250m on the debt markets last year.

Donaldson vowed in April that there would be no further fundraising from shareholders in 2018 – but within weeks Metro went back to the markets for another £303m.

The lender’s shares have fallen around 68pc from their peak in March last year, wiping £2.6bn off its value.

Investors are now mulling a lawsuit over the share price fall.

Therium Capital, an organisation which funds legal action against large businesses, is looking closely at the case.

Senior independent director Ben Gunn has been promoted to the role of deputy chairman in a bid to strengthen Metro’s board.

Last week the bank won £120m from a state-sponsored competition fund to boost its business lending services.