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Metro Bank chief executive Craig Donaldson will be in the spotlight next week as the lender continues to struggle with the fallout of an accounting error that has seen nearly 40% of its value cleared in a day.
The challenger bank will unveil its annual results on Wednesday, just weeks after Metro told the market that it had miscalculated the risk weighting of commercial property-backed commercial loans and certain specialized borrowing.
As a result, badysts in the city expect Metro to raise up to £ 300 million in fresh capital and curb expansion plans as it seeks to fill the gap. to win.
Goodbody badyst John Cronin said, "We believe that one of the key levers that management will be calling next week is a significant slowdown in growth ambitions in the short and medium term.
"However, we do not think that a fundraiser will be organized next week, because the management will probably want to organize a recovery of the share price. We know that some shareholders are in favor of reducing growth, but others will be disappointed. "
Mr Donaldson was particularly criticized for insisting that it was the bank that had detected the accounting error as part of the review of his year – end accounts.
We feel nervous about updating next week.
John Cronin, Goodbody Analyst
But Metro later admitted that it was in fact first reported by the Bank of England and not by the lender.
The episode has raised serious questions about the future of the CEO and he will be asked about the saga of the results.
At the time, the revelations had resulted in a 40% drop in the shares of the big bank and Mr. Cronin was planning another mbadive sale.
"We are nervous about next week's update. We believe that sales pressure will follow in response to the slowing message of growth.
"In fact, a broader strategy recalibration will probably not excite because Metro has not proven its ability to deliver on its promises and we struggle to see how new shareholders can be drawn to this story.
Better news for Metro, the bank Friday won the bulk of a fund to boost competition in the business banking sector.
Metro will receive a grant of £ 120 million, followed by Starling with £ 100 million, then £ 60 million for ClearBank.
Figures released next week should also point to Metro's underlying pre-tax profit of £ 50m, up 138%, but below expectations of £ 59m.
Before taxes, profits should rise from 18 to 48 million pounds sterling.
Metro has grown rapidly since its inception by US bank mogul Vernon Hill in 2010, operating in more than 60 branches across the UK and employing nearly 4,000 people.
However, this made headlines last year after Mr. Hill, the bank's president, was targeted by payments made by the lender to his wife's architectural firm.
Press Association
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