Metro Bank is facing a penalty of £10 million after it breached listing rules by publishing incorrect information to investors.

Craig Donaldson, the bank’s former chief executive, and ex chief financial officer David Arden are also being fined a combined £350,000 by the Financial Conduct Authority (FCA) for allegedly knowing about the error.

As part of its quarterly financial results, Metro Bank regularly reports to the market on its prudential position, including the Risk Weighted Assets (RWA) on which its regulatory capital requirements are based.

According to the financial watchdog, the bank published incorrect information concerning its RWA figure during its third quarter trading update in October 2018.

The regulator says that while Metro Bank was aware that the figure was incorrect, it did not explain that it was subject to an ongoing review in its October announcement.

The bank also did not seek legal advice on whether the incorrect RWA figure ought to be qualified or explained, failing to “take reasonable care” to ensure the announcement wasn’t misleading.

The FCA claims that both the former chief exec and CFO were aware the figure was wrong.

When the correct RWA was announced in January 2019, it saw the bank's share price drop by 39 per cent.

“Listed firms must ensure that the information they are disclosing to the market is right,” said Mark Steward, executive director of enforcement and market oversight. “This is what investors are entitled to receive.

“The UK’s Listing Rules impose high standards on issuers and their officers which Metro Bank, Mr Donaldson and Mr Arden failed to meet in this case.

The former bosses are to present their case to the Upper Tribunal, which will decide whether or not to uphold the FCA's decision.

The news comes days after the authority fined Santander £107 million after it found “serious gaps” in its anti-money laundering (AML) controls.

The Financial Conduct Authority (FCA) said that the bank failed to properly oversee and manage its AML systems between December 2012 and October 2017, impacting more than 560,000 business customers.

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