The colourful American founder of Metro Bank (MTRO.L) will step down as chairman of the bank in the wake of an accounting scandal that has left the company’s share price reeling.
Metro Bank said late on Wednesday it was beginning the search for a new chair to replace Vernon Hill II. American billionaire Hill founded Metro Bank in 2010. At the time, it was the first new high street bank to open in the UK for over 100 years.
Metro Bank didn’t set a timetable for Hill resigning as chair and said he would remain a non-executive director and president of the bank.
Senior independent director Sir Michael Snyder said it was thanks to Hill’s “vision and leadership that we have grown to 67 stores around the country, serving over 1.8m customer accounts.”
He added that Metro Bank has “now reached a point where an independent chair is appropriate to oversee the next stage of our journey and that process will start immediately.”
Metro Bank has been under pressure to shake up its governance since it suffered an accounting blunder at the start of the year.
Metro Bank admitted in January that it had misclassified some loans and, as a result, did not have the required capital to cover them. It was forced to raise £375m to shore up its accounts and is currently in talks to sell a loan book worth £500m to bolster funds.
Metro Bank’s share price has fallen almost 80% since its peak in January and has faced persistent questions over its governance since the accounting blunder became public. CEO Craig Donaldson offered to resign but the board told him to stay on.
News that Metro Bank has begun searching for a new chair came as the bank reported first half results. Revenues grew by 45% year-on-year to £189.8m and pre-tax profit grew by 373% to £20.8m.
“Our blend of service, convenience and award winning technology is not just attracting new customers in London and the South, it is helping to make us famous across the UK,” Hill said in a statement. “The Revolution goes from strength to strength.”
Hill is wellknown in UK business circles for his unusual approach to banking. He had invested heavily in growing an extensive branch network for Metro at a time when others were closing at a record rate. A former golfing buddy of Donald Trump, Hill also refers to his customers as “fans”, is often pictured with his Yorkshire terrier Duffy, and claims to personally inspect each new Metro branch before it opens.
However, Hill’s tenure as chair of Metro Bank has also faced controversy. Aside from the accounting problems, he has faced criticism for paying his wife £21m since 2010 for design services at Metro branches and paying for private jets on company expenses.
Sky News first reported that Metro Bank was kicking off a search for Hill’s replacement on Tuesday. Neil Wilson, chief markets analyst at Markets.com, said Hill’s departure would be “a big move” ahead of the official announcement.
“There have of course been questions on corporate governance and the company needs to square a few things with the City,” Wilson said. “It’s been a tough few months and a sensible time to get new blood in.”
Metro Bank had been bolstering its management ahead of the announcement about Hill. Earlier on Wednesday it appointed a new non-executive director and earlier this week it appointed a new chief information officer and chief transformation officer.
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.