Bank of England fines Metro Bank £5.4m after accounting blunder

The Prudential Regulation Authority said Metro Bank received a 30% discount to the fine because it agreed to resolve the matter.

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The Bank of England has fined Metro Bank almost £5.4 million for failures in its regulatory reporting, it said on Wednesday, after the lender revealed an accounting blunder in 2019.

The central bank’s Prudential Regulation Authority (PRA) watchdog confirmed it imposed the penalty on the challenger bank over failings between May 2016 and January 2019.

On January 23 2019, Metro Bank saw its shares plunge after confirming to investors that it had been forced to make corrections to the risk weightings of certain commercial loan portfolios on its balance sheet.

The Bank of England has fined Metro Bank almost £5.4 million over the quality of its reporting and governance failures.
The Bank of England has fined Metro Bank almost £5.4 million over the quality of its reporting and governance failures.

Sam Woods, deputy governor for prudential regulation at the Bank of England and chief executive officer of the PRA, said: “We expect firms to invest appropriate and adequate resources to ensure that they submit accurate regulatory returns.

“In this case, Metro Bank failed to meet the standards of governance and controls expected of it, resulting in today’s enforcement action.”

The PRA said the bank adjusted its reporting of risk weighted assets for December 2018 by around £900 million after applying incorrect weighting to some loans.

The regulator said that, as Metro Bank expanded its high street portfolio across the UK in recent years, it “failed to ensure the commensurate development” of its governance arrangements and reporting systems.

It added that the bank failed to “take sufficient care to ensure that it complied with its obligations to make accurate reports to the PRA”.

Metro Bank also failed to “allocate appropriate and adequate resources to enable it to comply with its reporting obligations”, the central bank said.

In a statement, Metro Bank said: “Metro Bank has co-operated fully with the PRA’s investigation and agreed the resolution of this matter with the PRA.

“In the time since the RWA (risk weighed asset) errors that were the basis of the PRA’s investigation were identified, Metro Bank has made significant improvements to, and substantial investment in, its regulatory reporting processes and controls.

“It has also strengthened its broader risk management and governance, demonstrating its commitment to accurate regulatory reporting and compliant growth.”

The fine comes just days after the Bank of England hit Standard Chartered with a £46.5 million fine for misreporting its liquidity position and controls failures.

The PRA said Metro Bank received a 30% discount to the fine because it agreed to resolve the matter.