Metro Bank shares have continued to recover this morning rising more than eight per cent after the board avoided a full-blown shareholder rebellion.
A number of directors, including chairman Vernon Hill, had been under threat ahead of yesterday’s annual meeting following a major loans blunder earlier this year.
Investors sent a clear message as more than 28 per cent voted against the re-election of two directors in charge of risk: Stuart Bernau and Eugene Lockhart.
Hill also survived but 12 per cent voted against his re-election, up from the 3.7 per cent who rebelled against him last year.
The bank’s share price, which hit all-time lows of 475p before a successful £375m capital raise last week, continued its recovery this morning climbing eight per cent to 763p.
Shares have still fallen 65 per cent since the bank admitted in January that a swathe of commercial loans had been wrongly classified and should have been among its risk-weighted assets.
The challenger bank was forced to tap up investors for extra cash through a discounted share placing and is still facing ongoing regulatory probes.
Some shareholder advisory groups had urged investors to block the re-elections of Hill, chief executive Craig Donaldson and a number of other directors.
ISS said accountability for the loans error sat with Hill, Donaldson, Bernau and Lockhart but noted regulators were still investigating, advising investors to abstain.
Pirc and Glass Lewis called for shareholders to block Hill’s re-election over payments 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 dissent.
The smattering of shareholders in attendance did not 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 said 2019 has been “somewhat of a challenge with a few ups and downs.”
A small group of investors told City A.M. they had been hoping for 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.”