1. Shawbrook finds breaches in asset finance business, Chief Financial Officer Tom Wood resigns

Shawbrook finds breaches in asset finance business, Chief Financial Officer Tom Wood resigns

British bank Shawbrook Group Plc said it expected to book an additional impairment charge in the second quarter due to some irregularities in its asset finance business....

By: | Published: June 28, 2016 2:22 PM
British bank Shawbrook Shawbrook shares were down 27 percent at 120 pence per share at 0717 GMT, making the stock the largest percentage loser on the FTSE midcap index on the London Stock Exchange. (Reuters)

British bank Shawbrook Group Plc  said it expected to book an additional impairment charge in the second quarter due to some irregularities in its asset finance business and that its Chief Financial Officer Tom Wood had resigned.

The charge of about 9 million pounds ($12 million) related to a number of loans being underwritten in its asset finance business that did not match its lending criteria, the lender said.

Shawbrook shares were down 27 percent at 120 pence per share at 0717 GMT, making the stock the largest percentage loser on the FTSE midcap index on the London Stock Exchange.

ALSO READ:British bank Shawbrook to take $12 mn charge, CFO Wood to leave

The bank said the charge would have an impact on pretax profit for the year, but it was confident that such a breach would not recur in the future as it had upgraded its risk management systems and controls.

Shawbrook had reported underlying pretax profit rose to 80.1 million pounds for the year ended Dec. 31.

The announcement comes after a sharp drop in UK banks on Monday, spurred by earnings downgrades and sell-offs by shell-shocked investors amid heightened fears over the fallout from Britain’s decision to leave the European Union.

Shawbrook said on Tuesday that excluding the impairment, its performance remained in line with its own expectations. It added that second-quarter loan originations were flat on the first quarter and up about 35 percent from a year earlier.

Founded in 2011, Shawbrook is one of several “challenger banks” to emerge since the financial crisis to fill a gap in small business lending after larger banks slimmed down to focus on bolstering their capital to meet tougher regulatory requirements.

The company said separately that CFO Wood would leave on June 30. Wood, who during his four years at Shawbrook played a pivotal role in it going public last year, said he wanted to spend more time at home.

Dylan Minto, currently director of strategy, would step in as interim CFO, Shawbrook added.   ($1 = 0.7528 pounds)

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