Tuesday 19 March 2019 10:05 am

Metro Bank urged to shake up board amid regulatory probes as it looks to hire new risk managers

Metro Bank has come under pressure to shake up its board amid regulatory probes into a loans blunder.

The challenger bank is set to make changes to its senior management team but there are still no major casualties following the error, which has sent shares tumbling more than 50 per cent and has sparked two investigations.

Read more: Metro Bank boss remains defiant as shares continue to plunge

The Financial Conduct Authority (FCA), along with investors have pushed the bank to make significant changes to the nine-person board, according to reports.

“We would welcome the appointment of a few heavy hitters from the banking world, who would actually challenge the chairman and the chief executive’s thinking,” Goodbody analyst John Cronin said.

“Though Metro Bank appears to prefer to pluck ‘talent’ from the retail world given its self-defined status ‘power retailer’ status,” he added.

The lender admitted at the end of January that swathe of commercial loans had been incorrectly classified and should have been among its "risk-weighted assets" (RWAs).

It then emerged that the error was identified by the Prudential Regulation Authority and not, as first claimed, by Metro Bank.

Chief executive Craig Donaldson said he offered to resign in the wake of the discovery but the board insisted he should stay.

Independent director Ben Gunn will move to a new position of deputy chairman and Howard Flight will step down next month.

While the board looks to have survived, Metro Bank is looking to hire a swathe of new personnel to improve its risk resilience and regulatory reporting.

The bank has advertised for a new head of operational resilience to identify and manage risks, as well as a regulatory reporting manager to keep the Prudential Regulation Authority and the FCA in the loop.

Read more: Metro Bank shares continue to plunge after emergency cash call

A Metro Bank spokesperson said: “Metro Bank regularly engages with its regulators and shareholders on a number of areas.

“We always listen closely and seek to address any issues raised.”