US investment firm Fidelity cuts Metro Bank stake by almost a third
One of Metro Bank's biggest investors has cut its shares in the lender by just under a third ahead of a £350m rights issue.
Read more: Metro Bank shares plunge to all-time lows as hedge funds circle
Fidelity Management and Research (FMR) held a 7.55 per cent stake in the challenger bank, but has cut that down to 5.37 per cent, according to a regulatory filing today.
The move comes from the bank's second biggest shareholder just as the lender tries to win a further £350m of investment from shareholders.
Metro Bank has seen more than £1.5bn wiped off its market value since an accounting error in January, in which the company admitted that a lot of business had been incorrectly classified and should have been among its “risk-weighted assets”.
First quarter results failed to ease shareholder fears as profits halved and a number of commercial customers left.
Its share price has continued to plummet, falling to an all-time low of 515p per share yesterday – a 75 per cent fall since announcing its error in January.
It fell further to 521p early in Friday's morning session but has since recovered back to 535.5p, a one per cent drop.
Pressure on the bank's board has also grown this week with shareholder advisory firm ISS recommending that investors do not re-elect current chief executive Craig Donaldson and chairman Vernon Hill.
ISS held the pair responsible for the loans error, along with directors Stuart Bernau and Gene Lockhart, but noted that there were still two regulatory probes ongoing.
Read more: Metro Bank investors urged to block re-election of chairman Vernon Hill
The advisory firm also suggested that stakeholders vote against the bank's remuneration report, which is set to award chief financial officer David Arden a £288,000 bonus, when investors gather at the bank's annual general meeting at the end of May.
“This payment is not considered appropriate given the recent shareholder experience, including the significant fall in share price,” ISS said in a note.
Both FMR and Metro Bank have declined to comment.