BSP: Banks on solid ground vs irregularities

Despite an internal fraud that cost Metropolitan Bank & Trust Co. at least P900 million, the bank and the industry in general remain on solid ground, the Bangko Sentral ng Pilipinas (BSP) assured the public yesterday.

“These things happen. They’re isolated. And banks, as I’ve said, are well capitalized that’s why banks have controls so that these kinds of things can be mitigated and withstood,” BSP Governor Nestor Espenilla Jr. said, referring to the Metrobank anomaly involving a senior bank official.

National Bureau of Investigation (NBI) operatives arrested Maria Victoria Lopez in her office last July 17 in an entrapment operation.

“We’re looking into it. We have to look into the circumstances and the facts around it,” Espenilla said, referring to the reported fraud. “That’s really all that the BSP can say for now.”

He revealed the BSP is conducting its own investigation separate from the NBI inquiry.

“Our concern is on bank supervision matters. So potentially a crime may have been committed, so that’s a police matter and that’s really where the NBI plays a role. They have their own role and we have our own from a banking supervision view,” he said.

The BSP chief pointed out it is still too early to discuss possible sanctions against the listed bank led by George Ty as a team of investigators and examiners has just been dispatched.

“It’s too soon to talk about those things. We first have to establish facts. Our banks have their natural internal controls precisely to prevent these things from happening,” the BSP chief said.

“So we will have to look into the adequacy of those controls if in fact a significant crime happened within the bank,” he pointed out.

The Metrobank incident came on the heels of disruptions in the operations of the Ayala-led Bank of the Philippine Islands (BPI) and the SM Group’s BDO Unibank Inc. last month due to technical glitches.

An employee of Union Bank of the Philippines was also arrested for allegedly stealing about P17 million through unauthorized cash transfers.

“No system is perfect but the bank is expected to be resilient to these things. And I have no concern that the bank can’t handle these things,” he said.

He added Metrobank is a large bank that booked a net income of more than P18 billion last year. “I mean this is very unfortunate but they have to deal with it,” he said.

BSP Deputy Governor Chuchi Fonacier said the country’s banking system is well capitalized and strong enough to weather impact of irregularities. “Metrobank is a big bank. It can handle the situation. It is unfortunate that this thing happened,” she said. She added the BSP would establish the facts and determine what needs to be done.

In a statement, Metrobank said the individual involved in the case was arrested last Monday.

It added it is “reinforcing its commitment to the highest standards of integrity and upholds the protection of its customers as its main priority. No customer has been affected in this incident.”