Metro Bank will on Wednesday try to draw a line under a series of corporate governance rows with the City by announcing that it is kicking off a search for a new chairman.
Sky News has learnt that the high street lender will disclose alongside its half-year results that it is to seek a successor to Vernon Hill, its founder and chairman for most of its decade-long existence.
Sources said on Tuesday that Metro Bank was unlikely to commit to a firm leaving date for Mr Hill or say whether he would remain on the company’s board after he relinquishes the chairmanship.
That could deter some prospective replacements from accepting the role, but may also reassure many of the largely US-based shareholders who Mr Hill has been instrumental in persuading to back the company.
Metro Bank refused to comment ahead of its results statement, which unusually for a solely London‎-listed business will be published after the market closes.
However, sources acknowledged that the time was right to seek an independent chairman following a torrid few months which has seen it forced to raise £375m after an accounting crisis.
Banking regulators are understood to have expressed their strong view about the need to improve governance and oversight at the company.
Both the Financial Conduct Authority and Prudential Regulation Authority will be required to authorise the appointment of Mr Hill’s successor.
Sky News revealed at the weekend that the bank was putting the finishing touches to a £500m deal to‎ offload a mortgage portfolio back to Cerberus, the American hedge fund.
That transaction is also expected to be announced on Wednesday, providing a boost to Metro Bank’s capital position.
The recent fundraising, which allayed immediate fears about its ability to continue trading, had prompted renewed speculation about the tenure of Mr Hill, who recently declared that he would “probably die” in the chairman’s role.
Mr Hill owns a 5% stake in Metro Bank, and became the face of the business by implementing a dog-friendly policy that garnered publicity when it became Britain’s first new high street lender in a century after the banking crisis.
His supporters among the bank’s investor base have argued that Mr Hill should not be forced out despite concerns expressed by others about corporate governance and the slump in its shares over the last year.
Their backing may lead Mr Hill to seek to stay on the board in another capacity, according to one person close to him.
Some City insiders believe the Metro Bank chairman has been unfairly targeted after creating a financial services franchise that may‎ yet possess enduring value.
However, Mr Hill has courted unwanted scrutiny over commercial arrangements between Metro Bank and his wife, which has prompted them to be unwound amid City complaints.
The accounting error which emerged this year sent Metro Bank’s shares plummeting, partly because investors perceived it to have been a particularly egregious oversight on the part of the company’s finance team.
The impact of the mistake was illustrated by quarterly results showing that profits had halved and that it had suffered an exodus of corporate customers.
Metro Bank has about 1.7 million customers and describes itself as “the revolution in British banking”, deploying a model founded on friendly customer service.
Its recent travails, however,‎ have dented its hopes of growing its deposit base by 20% this year.
The bank, which has more than 60 branches and became the first new high street lender for more than a century when it opened its doors in 2010, is now worth £8/2m – just over 85% less than it was a year ago.
At its AGM in ‎May, just over one in ten investors opposed Mr Hill’s re-election, with a larger revolt against two non-executive directors.
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