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Highlights
- Metro Bank has been fined by the BoE for almost £5.4 million for reporting and governance-related failures.
- The bank’s shares rose over 1 per cent despite the news
- The penalty comes amid several major banks being fined by the BoE over various types of failures
Metro Bank (LON:MTRO), a retail and commercial bank, has been fined by the Bank of England (BoE) for almost £5.4 million due to reporting and governance-related failures.
The UK’s financial services regulatory body, the Prudential Regulation Authority (PRA), stated that the penalty was imposed due to failures of the bank that occurred between May 2016 and January 2019.
Despite the penalty, the bank’s shares rose over 1 per cent in early trading on Wednesday.
Metro banks’ PRA investigation
The bank’s penalty of £5.376 million was imposed for the breach of Fundamental Rules 2 and 6 of the PRA Rulebook prior to 23 January 2019.
According to the PRA, the bank had earlier adjusted its reporting of risk weighted asset (RWA) for December 2018 by about £900 million, following the application of wrong weighting to certain loans.
The bank stated that it had improved its regulatory reporting processes and controls significantly since the RWA faults were detected. It had also made a substantial investment into the same.
The bank added that there was no update on the FCA investigation as yet.
Banks fined over failures
Metro Bank became the latest bank to face fines from UK’s regulatory authorities over different types of failures including reporting or control errors or anti-money laundering related failures.
In recent weeks, several banks have been imposed penalties from either the PRA or by another financial regulator, the Financial Conduct Authority (FCA).
Some of these banks, which were fined recently, included Standard Chartered (LON:STAN), HSBC Holdings (LON:HSBA), NatWest (LON:NWG).
Standard Chartered faced a penalty of £46.5 million by the PRA due to liquidity position reporting errors and over controls failures, whereas HSBC and NatWest were fined by the FCA over anti-money laundering failures.
Related Read: Are these 3 bank stocks worth buying now?
Metro Bank PLC’s (LON: MTRO) share price performance
Metro’s shares were higher by 1.19 per cent, trading at GBX 89.00, on Wednesday, 22 December at 10:21 AM BST. The company’s market capitalisation was at £151.64 million.
Comparatively, the FTSE All-Share index was at 4,145.70, up by 0.02 per cent. (Metro Bank is a part of the FTSE All-Share index). Additionally, the banking sector index was at 3,013.66, higher by 0.45 per cent.
Image source: Refinitiv
