Metro Bank will stop hiring the architectural firm owned by its chairman’s wife after next year, bowing to pressure after several major proxy advisers and investors including the UK’s largest fund group criticised it over conflicts of interest.
Since it was founded nine years ago, the bank has paid more than £20m to InterArch for work on the design of its branches. InterArch is owned by Shirley Hill, the wife of Metro co-founder and chairman Vernon Hill.
Metro has consistently defended the arrangement, which it says was reviewed annually by the bank’s audit committee using independent benchmarks, which found the terms were “at least as beneficial as those which could be obtained in the market from an alternative supplier.”
However, on Friday the bank said it would start buying all its architectural, creative and branding services from alternative suppliers, with responsibilities handed over the next 18 months “to ensure a smooth operational transition”.
The decision was detailed in the prospectus for the bank’s closely watched share placing which was published on Friday afternoon. Metro raised £375m from investors to let it resume lending growth after the discovery of a reporting error earlier in the year hit its capital levels.
