Metrobank vows compliance to BSP sanctions, assures clients

MANILA, Philippines — Metropolitan Bank and Trust Co. said it is ready to comply with sanctions imposed by the Bangko Sentral ng Pilipinas (BSP) over a P1.75 billion internal fraud allegedly perpetuated by a former executive.

Metrobank said in a statement the bank’s board of directors and senior management accept accountability and command responsibility for the incident and commit to implement the BSP directives.

The BSP said the Monetary Board has approved the imposition of sanctions against the bank owned by taipan George SK Ty including the suspension of directors and officers who failed to perform adequate oversight and have been complacent or remiss of their duties and responsibilities.

The central bank did not name the suspended officials but sources said those suspended include Metrobank president and director Fabian Dee as well as Metrobank director Vicente Cuna Jr. who is also president of Philippine Savings Bank.

Dee was appointed president in April 2012 while Cuna used to head Metrobank’s Institutional Banking Sector and Corporate Banking Group before he became president of PSBank in April 2013.

“Metrobank assures the public that bank operations remain business as usual,” the bank said in a statement.

According to Metrobank, it proactively reviews and improves its systems, which is exactly how the fraud was detected.

“The bank’s control framework remains effective and even stronger. Thus, the BSP recognized the immediate actions taken by Metrobank, as well as the medium to long-term initiatives that will serve to further improve governance, compliance, and control,” it said.

The BSP also required Metrobank to allocate approximately P4.45 billion of its capital on a consolidated basis to cover for higher operational risk.

“The requirement is subject to periodic review and would be lifted when the bank is determined to have put in place adequate risk control measures to address the weaknesses noted,” the central bank said.

The Ty-led bank pointed out it is in a strong position to set aside P4.45 billion of capital reserves in line with BSP’s directives as its assets stood at P2 trillion while its equity amounted to P210 billion.

“In addition, the bank has proactively absorbed the entire amount related to this incident in the third quarter. Despite this, the growth momentum of the bank remains robust and results for the year are ahead of plan,” Metrobank said.

The country’s second largest bank fell victim to an internal fraud involving P1.5 billion worth of funds allegedly committed by Metrobank’s corporate service management division head and account service manager Ma. Victoria Lopez.

Metrobank filed a complaint against Lopez together with Hubert Co and Sue Sai before the Makati City Prosecutor’s Office in August and the case is now pending with the Makati City regional trial court. Lopez is now detained at the Makati City Jail after being arrested in an entrapment operation while other respondents are at large.

Metrobank reiterated no customer was affected.

“This is an isolated incident. The perpetrator acted alone and for her sole benefit.  She has been apprehended and cases against her have been filed,” the bank added referring to Lopez.

The BSP also required Metrobank to execute and submit a letter of commitment to enhance corporate governance, credit administration, internal controls and audit, risk management, and customer on-boarding and monitoring processes over a one-year period.

In determining the appropriateness of the sanctions, the BSP said the Monetary Board took into consideration Metrobank’s strong financial condition and immediate corrective actions to contain further financial damage.

“Together with medium to long-term initiatives that will serve to improve governance, controls and compliance, the Monetary Board re-affirms the safety and soundness of Metrobank,” the BSP said.