19th Feb 2020 08:20
(Alliance News) - Metro Bank PLC, the UK challenger bank that has been facing challenges of its own of late on Wednesday confirmed Dan Frumkin as permanent chief executive officer, with immediate effect.
Frumkin has been working as Metro's interim CEO since the start of the year, having joined in September 2019 as chief transformation officer. Prior to this, he spent eight years at Bermuda-based Bank of NT Butterfield & Son and has held roles at Royal Bank of Scotland Group PLC and Northern Rock.
"The combination of three decades of experience across retail banking and the positive impact he has made since joining Metro Bank last year mean we have identified an impressive CEO to take Metro Bank into its second decade. I look forward to working with Dan as we deliver the next chapter," said Chair Michael Snyder.
Snyder said Metro carried out a "comprehensive" search in its effort to find a new boss, but Frumkin "stood out".
Sky News on Tuesday had reported the UK challenger bank was under pressure from the City to make Frumkin's role permanent.
In a statement on Wednesday, Frumkin added: "Having spent the past few months getting to know Metro Bank and meeting colleagues across the country, it is clear that their passion and commitment to delivering for customers is second to none. This is a business with robust foundations and real potential to shake up British banking. I am excited about the opportunity and look forward to updating the market on our plans on February 26."
Shares in Metro were down 0.8% in early trading in London on Wednesday at 193.50 pence each.
The lender has been dogged by financial problems over the past year, leading to a board shake-up at the end of 2019.
Metro hired Barclays PLC's former chief internal auditor, Sally Clark, to its board on January 1, but saw long-serving Deputy Chair Alastair Gunn step down.
Gunn left on December 31 following a 10-year stint on the board.
It was the latest board room change for the lender, after chief executive Craig Donaldson stepped down at the end of 2019. Donaldson, who took over as CEO in 2009, will remain "available to the board as an advisor" until the end of 2020.
The bank's founder Vernon Hill stepped down as chair in late October.
Metro Bank, dropped from the FTSE 250 index in the September quarterly review, has faced a string of accounting and financial issues in 2019.
Metro Bank had to postpone a debt issue in September due to "market conditions".
At the time, Metro Bank said a "broad number" of investors showed interest in a maiden MREL issuance, which it needed to complete to meet EU rules. MREL stands for minimum requirement for own funds and eligible liabilities and relates to EU solvency legislation.
The Financial Times had reported Metro Bank that had been forced to withdraw a GBP200 million to GBP250 million bond offering, after only receiving orders for GBP175 million.
The debt offering blow came after UK regulators spotted an error in the bank's loan book, though Metro Bank originally said it found the problem itself. Addressing the error required finding additional capital.
Then, in October, Metro Bank priced a GBP350 million six-year maturity MREL-eligible senior non-preferred debt transaction, saying it was looking into more actions to enhance capital efficiency. The debt had a coupon of 9.5%.
By Paul McGowan; [email protected]
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