Metro Bank to cut ties to design company run by founder’s wife
METRO Bank has promised to end its relationship with founder Vernon Hill’s wife by the end of next year after growing criticism about payments made to her design firm.
The decision marks an about-turn for the lender and its flamboyant founder Mr Hill, who made it clear before setting up Metro that he would not work without his wife. Sources said he insisted “no Shirley, no Vernon”.
Since it was set up in 2010, Metro has paid more than £21m into Shirley Hill’s architecture firm Interarch. Last year alone it raked in £4.5m in fees, despite investors raising concerns about the arrangement.
However, in a prospectus yesterday the bank said that it has decided to end the relationship with Interarch by the end of next year, having previously said it would this year hire another design agency to work alongside her business.
The company did not give a reason for the change, reiterating that its audit committee found the arrangement to be at “arm’s length”.
However, criticism about the relationship and calls for Mr Hill to step aside are piling up after a major accounting blunder earlier this year left investors nursing heavy losses, shining a spotlight on the bank’s leadership and corporate governance. The move is likely to appease those who planned to vote against Mr Hill’s re-election as chairman at next Tuesday’s annual meeting.
Its largest City investor, Legal & General Investment Management, unveiled its plans yesterday to vote against him and others.
Mr Hill survived a shareholder rebellion over payments made to Interarch last year, but the bank’s decision to now move away from the relationship suggests that even his loyal club of US investors, many of whom have made huge amounts of money backing his previous lender Commerce Bank, are losing patience.
The move comes a day after the bank raised £375m from new and existing investors – £25m more than expected following a surge in demand. Shares in the lender soared by 26pc to 677p in response to the raise.
Sources told The Telegraph that Mr Hill had tried to drum up demand from investors over the weekend, promising financiers that things were looking up.