Metro Bank revealed last week that regulators had discovered an accounting problem which meant the bank had underestimated the risk level of some of its commercial loans.
It said: “Metro Bank has received initial notification that the PRA and FCA intend to investigate the circumstances and events that led to the risk-weighted assets (RWA) adjustment announced on 23 January 2019.”
In early February the lender pulled its range of portfolio commercial buy-to-let (BTL) products.
Share price plunge
In the third quarter of 2018, Metro Bank reported a 58 per cent annual uplift in residential mortgage lending and underlying pre-tax profits of £50m for the year, up 140 per cent on 2017.
For the year over all, it reported a 48% increase of total customer loans to £14.2bn. Retail mortgages were the largest component of Metro Bank’s lending book at 67%.
Last month, Metro Bank came top for over all service in the quarterly banking customer satisfaction survey.
Last week, however, following news of the blunder and investigation, the price of shares in the bank fell by 36% in 48 hours.
Shares in Metro Bank, which was founded in 2010, had already plunged by 29% in January after the bank said slowing growth would hit its profits.