Big Customers Desert Metro Bank Over Accounting Error

Some of Metro Bank’s largest customers left the bank after the discovery of a historic accounting error in the first quarter, damaging growth at the under-fire British lender, the Financial Times reported. Chief executive Craig Donaldson said “adverse sentiment” had led to the departure of a “small number of large commercial and partnership customers”, contributing to a 4 per cent quarter-on-quarter reduction in deposits. Metro Bank in January revealed that it had miscategorised a large number of commercial loans, meaning it did not have as much capital against them as it should. The discovery prompted a sharp drop in its stock — it is down 54 per cent since the start of the year — and forced the lender to cut its long-term growth plans. It is also working on a new share issue to prop up its capital levels, but the bank gave no major update on the hotly-anticipated capital raise alongside its quarterly results, which were reported after markets closed on Wednesday. Read more