Crunch time for Metro Bank as embattled leadership meets with shareholders

Metro Bank is set to hold its first meeting with a shareholder critical of multimillion-pound payments to an architecture firm owned by the chairman's wife.

Craig Donaldson, the boss of Metro Bank : John Stillwell/PA Wire
Craig Donaldson, the boss of Metro Bank : John Stillwell/PA Wire

The lender’s chief executive Craig Donaldson told the Press Association he was surprised by the amount of attention the issue has received in the lead-up to Tuesday’s annual general meeting (AGM), and that he was looking forward to speaking with Royal London Asset Management about its grievances.

“We reached out, saying we’d like to speak to them because, of course, I speak to all my shareholders.

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“I’d love to engage if people have any concerns ... I want to be able to talk them through, to understand them and hopefully to be able to give people comfort about what we do.

“It’s very hard to do that though when people haven’t spoken to you about it.”

The meeting with Royal London is scheduled to take place in June.

It is understood that Metro Bank offered to meet with Royal London Asset Management in April but was told its representatives were too busy during AGM season and would instead send through a formal letter to air its grievances ahead of Metro Bank’s annual meeting.

Royal London Asset Management said: “When Metro Bank contacted us, we had already submitted our vote and offered to meet with them in June.”

Details of the sit-down are now being arranged.

Royal London, which holds a 0.44% stake in Metro Bank worth £13.6 million, made headlines earlier this month when it confirmed plans to vote against a raft of resolutions at Metro Bank’s AGM.

They included the lender’s remuneration report, citing a lack of transparency around performance targets for executive pay, as well as the re-election of chairman Vernon Hill due to payments to his wife’s firm InterArch.

However, the chairman dodged a shareholder rebellion at the AGM, clinching 96.3% approval for his reappointment.

“My view is it’s very simple, we have overwhelming support for what we are doing,” Mr Donaldson said.

“We’ve always been exceptionally transparent about the subject that was raised - have never hidden it, have published everything.”

Close to £4.6 million in fees were paid by Metro Bank to InterArch last year, bringing the total shelled out to Mrs Hill’s firms to £21 million, based on accounts filed between 2010 and 2017.

“As far as I’m concerned, the review that we do periodically continues to tell me that we’re getting unbelievably good value ... and therefore we’ll continue doing what we’re doing because I’m very happy that we’re growing the bank in an unbelievable way,” the chief executive said.

“InterArch have experience building hundreds and hundreds of stores and we’re leveraging that experience to build Metro Bank,” he added.

Metro Bank is planning to open 12 new stores this year, with an eye on reaching around 200 to 250 branch locations within the next 10 years.