Listed asset finance lender Shawbrook Bank has disclosed that it will charge itself £9m (10.82m) after it discovered "irregularities" in leases underwritten between 2013 and 2015.
A spokesman for Shawbrook could not say whether the leases, with a total value of £14.7m and written from one office in the UK, were from direct business or from an introducer, but confirmed that they ‘did not meet the business’s strict lending criteria’.
Leasing Life understands that none of the lessees have yet defaulted on the loans but that the bank is taking precautionary measures by making the charge.
The ‘irregular loans’ were identified by Shawbrook’s Group’s upgraded risk management systems and controls, which the bank said were implemented "following significant investment through 2015 and H1 2016."
Shawbrook was resolute that the breaches would not happen again.
Steve Pateman, chief executive, said: "While this is extremely disappointing, the irregularities were identified by the upgraded risk management systems and controls we implemented earlier this year. They have been investigated thoroughly and appropriate action has been taken.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
"Since the year end we have simplified our business model into three divisions with clear management lines, implemented an upgraded risk management framework and are confident that our disciplined approach to risk is fully embedded across the business.
"Whilst the additional impairment charge arising from these irregularities will impact pre-tax profit for the year, performance is otherwise in line with our expectations. Our specialist and diversified market positioning provides a significant advantage as the Group continues to grow strongly and deliver superior returns through a strong balance sheet, a stable funding platform and a clearly articulated strategy."
Shawbrook will announce its results for six months to 30th June 2016 on 27th July 2016.
Chief financial officer Tom Wood resigns
At the same time, the Shawbrook board announced it had accepted the resignation of its chief financial officer Tom Wood, effective June 30th.
A spokesman for the bank said the two events were not connected, and that Wood was leaving to spend more time with his family.
The bank wrote: "Tom joined Shawbrook in 2012 and the Board would like to thank him for the important contribution he has made in helping successfully guide the Company through its IPO and first year as a quoted company. He will leave the Company on 30th June and a search for his successor will now begin."
Dylan Minto, currently director of strategy, will become interim chief financial officer while the search takes place.
Pateman added: "Tom joined Shawbrook in 2012 and the Board would like to thank him for the important contribution he has made in helping successfully guide the Company through its IPO and first year as a quoted company."