By Carolyn Cohn
LONDON (Reuters) -The Bank of England has fined Metro Bank 5.38 million pounds ($7.13 million) for failures in its regulatory reporting, it said on Wednesday, after the lender revealed an accounting blunder in 2019.
Metro Bank said in January 2019 it had corrected https://www.reuters.com/article/uk-metro-bank-outlook-idUKKCN1PH0J7 risk weightings of some of its commercial loan portfolios, wiping hundreds of millions of pounds off its share value and forcing its top bosses to quit.
The Bank of England's Prudential (LON:PRU) Regulation Authority (PRA) said the incorrect risk weightings meant the bank had presented an inaccurate picture of its regulatory capital in its regulatory returns between May 2016 and Jan 2019.
"We expect firms to invest appropriate and adequate resources to ensure that they submit accurate regulatory returns," PRA Chief Executive Sam Woods said.
"In this case, Metro Bank failed to meet the standards of governance and controls expected of it, resulting in today’s enforcement action."
Metro Bank, founded in 2010, pursued a rapid growth plan in the years before 2019 without adequate investment in regulatory reporting governance and controls, the PRA said.
Metro Bank said in a statement it had agreed the resolution of the issue with the PRA and that the bank had since made "significant improvements to and substantial investment in its regulatory reporting processes and controls".
Metro Bank said there was no update on a separate investigation by the Financial Conduct Authority.
The PRA said Metro Bank received a 30% discount to the fine because it agreed to resolve the matter.
Metro Bank's shares, which plunged last month after U.S. private equity firm Carlyle said talks about a possible takeover offer for the bank had ended, fell 1.9%. The bank's shares have fallen by more than 90% since January 2019.
The PRA said this week it was fining Standard Chartered (LON:STAN) 46.55 million pounds for misreporting its liquidity position to the regulator and for failings in its controls.
($1 = 0.7549 pounds)