The share price of Metropolitan Bank and Trust Company, the country’s second largest lender, tumbled Friday, after the Bangko Sentral ng Pilipinas said it is investigating an alleged P900-million internal fraud perpetuated by an executive of the bank.
Metrobank’s share price fell 5 percent Friday to P86.9, while most other stocks advanced. The benchmark Philippine Stock Exchange index gained 1.1 percent Friday.
Reports said a vice president of Metrobank was arrested for diverting between P900 million and P2.5 billion in bank funds.
Bangko Sentral Governor Nestor Espenilla Jr. downplayed any significant impact of the internal fraud in Metrobank on the banking industry.
“These things happen. They’re isolated. And banks, as I’ve said, are well capitalized that’s why banks have controls so that these kind of things can be mitigated and withstood,” Espenilla said.
“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. This is a large bank. It made more than P16 billion last year, so I mean this is very unfortunate but they have to deal with it,” Espenilla said.
Espenilla said Bangko Sentral was already looking into the circumstances and facts about the incident.
“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 [National Bureau of Investigation] plays a role. They have their own role and we have our own from a banking supervision view,” Espenilla said.
Metrobank said it immediately caused the arrest of the individual involved in the case, who was detained Monday.”©”©
“The bank 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. In the context of the bank’s P1.9 trillion financial resources, rest assured that we continue to operate business as usual for the bank and our customers,” Metrobank said.”©
The Bankers Association of the Philippines expressed confidence that Metrobank would quickly resolve the reported theft, saying the incident appeared to be an isolated one.
“Such incident is quite unfortunate but we wish to reiterate that banks have established internal controls and systems and instituted separation of functions designed to help prevent crimes of this nature from happening,” BAP said.
“Suffice it to say, Metrobank assures the public that none of its customers have been affected by this incident as it reinforces its commitment to the highest standards of integrity and uphold the protection of each and every one of its customers,” the group said.