Britain’s Financial Conduct Authority (FCA) has imposed a £16.7 million fine on Metro Bank for significant failures in its anti-money laundering systems, which left £51 billion worth of transactions unmonitored over a four-year period.
The investigation revealed a critical technical fault in the bank’s automated detection system, implemented in June 2016, which resulted in approximately 60.5 million transactions escaping proper scrutiny until December 2020. The severity of the situation was amplified by the fact that junior staff members’ concerns about these issues went unaddressed by senior management.
The FCA initially considered a £23.8 million penalty but reduced it to £16.7 million after the bank agreed to cooperate in resolving the matter. Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, emphasised that Metro’s failings potentially compromised the financial system’s defence against criminal activity.
This penalty marks the latest setback for Metro Bank, which has faced a series of challenges since its founding in 2010. The bank previously shocked investors with an accounting error in 2019, leading to substantial share price declines and necessary capital raising efforts. The institution has already faced previous regulatory penalties, including a £5.4 million fine from the Bank of England in 2021 and a £10 million FCA fine in 2022.
A subsequent review of the unmonitored transactions resulted in 153 suspicious activity reports being filed and 43 customer accounts being closed. Despite these challenges, Metro Bank’s current chief executive, Dan Frumkin, maintains that this fine represents a conclusion to the bank’s transaction monitoring issues, allowing the institution to focus on future developments.
The announcement coincided with positive news from Metro Bank’s third-quarter trading update, indicating a return to profitability in October 2024. The bank’s shares responded favourably, rising by 1¾p to 86½p, representing a 2.25 per cent increase.
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