Disgruntled Metro Bank shareholders have sent a clear message to the bank’s board but stopped short of a full-blown rebellion at today’s annual general meeting.
More than 28 per cent of investors voted against the re-election of two directors in charge of risk, Stuart Bernau and Eugene Lockhart.
Under-fire chairman Vernon Hill survived but 12 per cent voted against his re-election, a significant jump from the 3.7 per cent who rebelled last year.
It comes after the lender admitted in January that a swathe of commercial loans had been wrongly classified and should have been among its “risk-weighted assets.”
Shares have fallen 68 per cent since the error was discovered and the bank was forced to raise £375m in extra capital last week through a discounted share placing.
Chief executive Craig Donaldson, who offered to resign earlier this year, was the most popular board member with just 10 per cent calling for him to leave.
Shareholder advisory groups had urged investors to block the re-elections of Hill, Donaldson and a number of other directors.
Hill came under particular scrutiny for payments made by the bank to his wife’s architecture firm Interarch.
Ahead of the meeting the bank promised to drop Shirley Hill’s company as a supplier by the end of 2020 in a bid to quell investor fury.
The eagerly anticipated AGM lasted less than 20 minutes, most of which was taken up by chief financial officer David Arden reading out the resolutions.
The smattering of shareholders in attendance elected not to ask any questions, while the majority of investors stayed at home.
Donaldson apologised and described the events of recent months as a “humbling and chastening experience.”
Hill opted for “somewhat of a challenge with a few ups and downs.”
A small group of investors told City A.M. they had been hoping for much more.
Small shareholder Michael Johnston said: “It was appalling, I wanted a full explanation and assurances that it won’t happen again.
“Instead they filed in like a football team, held the meeting and filed out like a football team.”
He added: “Not only have our shares lost value but they have been diluted by a share placing that completely bypassed small shareholders.
“Yet all of the board increased their stake at a discounted price.”
Another said: “I’m not happy at all – they should have anticipated an accounting error like that and this should never have happened.”