Metro Bank profits plunge as it bids goodbye to chairman Vernon Hill
Metro Bank’s woes were laid bare today after the troubled high street lender posted a downbeat financial performance and called time on its colourful founder’s role as chairman.
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The under-fire challenger bank reported a sharp drop in profits for the six months to 30 June as it counted the costs of a major balance sheet blunder which rocked investor and customer confidence.
Pre-tax profits hit £3.4m in the first half of 2019, plummeting from £20.8m a year earlier. Customers also withdrew £2bn of deposits.
Vernon Hill, the 73-year-old American billionaire who founded the self-styled ‘dog-friendly high street bank’, also confirmed his plans last night to leave his role as chairman as part of a management shake-up.
The hunt for Hill’s successor begins amid a flurry of new appointments that the firm has made in recent days, as it looks to bolster its senior ranks in the wake of its recent crisis.
“Vernon’s concluded that where we are with our national growth, and where we are with regards to the longevity of the organisation, that he’s stepping down,” chief executive Craig Donaldson told City PM
“Vernon is the founder and the visionary. We’ve created 4,000 jobs because of his vision.”
This week’s reshuffle is the first since the firm spooked the City in January by slashing its growth plans and revealing an accountancy error in which some loans had been classified as less risky than they were.
Metro Bank’s share price has crashed more than 75 per cent since the revelation, which prompted fears of a regulatory crackdown and wider questions over the lender’s business model.
“We’ve faced more challenges in the first half of this year than we’ve ever faced,” said Donaldson. He said Metro wanted to “draw a line” under events in May when intense speculation about the bank’s future led to £1.4bn of outflows.
After it revealed the accounting error the lender asked investors to stump up £375m as part of an emergency cash call to shore up its finances.
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The company’s share price edged down four per cent today as investor caution mounted in the hours ahead of the firm’s results, which were released after trading closed.