Rattled savers pull £566m out of Metro Bank

CUSTOmErS withdrew £566m from metro bank at the start of 2019 after an error in its accounts.

Deposits dropped by 4pc in the three months to the end of march as it fights to restore its credibility after admitting in January that it miscalculated the risk of some loans.

The resulting hit means that its £15.2bn book of loans is slightly more than total deposits, which stand at £15.1bn.

This means all the money it has been given by savers has been loaned to borrowers, giving it a loan-to-deposit ratio of 100pc.

analysts tend to consider banks more secure if the ratio is at 90pc or lower, although ratios of 100pc or more are not unusual.

John Cronin, an analyst at goodbody, said: ‘ These can only be characterised as a truly horrible set of numbers. maybe the only solution is to sell to a third party.’

The bank said deposits fell because a small number of commercial and partnership customers pulled their money out in January and February.

Chief executive Craig Donaldson insisted metro does not have a credibility problem, saying: ‘Shareholders know we take seriously what we say, and we do it.’

metro is being probed over the problems with its loans by the Financial Conduct authority and the bank of England.

its woes got worse when the mail revealed the error was discovered by regulators at the bank of England, not its own staff as first suggested.

The bank’s flamboyant billionaire founder and chairman Vernon Hill is also under the spotlight. He gets £10,000 a month in expenses and an £385,000 annual salary. metro has paid more than £25m to an architecture firm run by his wife Shirley since the bank was launched in 2010.

Shares are down 80pc from their peak in march last year.