Metro Bank has appointed industry veteran Robert Sharpe as its new chairman, after controversial co-founder Vernon Hill resigned in the wake of a reporting scandal last year.
Mr Sharpe, currently chairman of Bank of Ireland UK and private equity-owned lender Hampshire Trust Bank, will join the challenger bank in November.
The lender had been searching for a chairman for almost a year, after Mr Hill was criticised over the bank’s handling of the reporting error and a series of earlier governance failings such as paying millions of pounds to a business owned by his wife.
Metro’s founding chief executive Craig Donaldson also quit the bank in the wake of the scandal, which involved miscategorising large quantities of loans when calculating its capital requirements. Mr Donaldson was replaced this year by turnround specialist Dan Frumkin.
Mr Sharpe said: “As we navigate the new economic environment caused by Covid-19, community banking has never been more important as people, businesses and communities adapt to this new normal.
“It is this community banking model that sets Metro Bank apart and will enable us to continue to grow.”
Mr Sharpe previously ran Bank of Ireland’s UK consumer business and several building societies, including leading a turnround at West Bromwich Building Society in the wake of the financial crisis.
Metro outlined its own turnround plan in February, abandoning its strategy of rapid expansion and shifting its focus from mainstream mortgages towards more profitable areas such as business lending and unsecured consumer lending.
The company said in May that the coronavirus pandemic would lead to “significantly higher” loan losses than it had previously experienced, but has yet to provide a detailed update on the impact of the health crisis. It will report second-quarter results in August.
John Cronin, analyst at Goodbody, said he did not expect the hire to affect Metro’s strategy, but added that Mr Sharpe’s contacts book could help the bank as it considers potential deals to help with its turnround or an eventual takeover.
“He’s been around a long time, that could help open doors from a dealmaking perspective, which they may need to do over time,” Mr Cronin said.
Last month Metro said it was in talks to purchase peer-to-peer lender RateSetter in an effort to boost its consumer lending business.
Shares in Metro rose 3.8 per cent on Wednesday to 115p. The stock has bounced back 61 per cent from its nadir in May, but is still down more than 40 per cent since the start of the year.
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