Bangko Sentral ng Pilipinas Governor Benjamin Diokno said over the weekend none of the missing $2.1-billion fund of German payments company Wirecard entered the Philippine financial system.
“The international financial scandal used the names of two of the country’s biggest banks”•BDO [Unibank Inc.] and BPI [Bank of the Philippine Islands]”•in an attempt to cover the perpetrators’ track,” Diokno said in a statement Sunday.
Wirecard, a financial services provider which is listed on the German stock exchange, was reported to have been the victim of fraud after some $2.1 billion allegedly went missing from its accounts which were supposed to have been deposited in BDO and BPI.
Diokno said both BDO and BPI had already stated the German firm was not their client nor did they have any business relationship with the firm.
“Both banks informed Ernst & Young, the external auditor, that the documents that attested to the presence of the supposed funds were ‘spurious’,” Diokno said.
He said the matter was reported to the BSP, which is currently conducting its own investigation.
“The initial report is that no money entered the Philippines and that there is no loss to both banks,” Diokno said.
Wirecard chief executive Markus Braun resigned on Friday after the company’s stocks tumbled by more than 70 percent last week on reports of missing funds.
BDO and BPI described as fake documents showing Wirecard has deposits in the two banks.
A Reuters report said on Sunday that BPI had suspended an assistant manager whose signature appeared on one of the fraudulent documents while a BDO marketing officer may be involved in fabricating a bank certificate.
Wire reports said “Markus Braun, who built the German company into one of the hottest investments in Europe, leaves Wirecard facing a looming cash crunch amid allegations of fraud over the missing money, which has hit a dead end in the Philippines.”
BDO, the country’s biggest bank in terms of assets controlled by the Sy family, and the Ayala-led Bank of the Philippine Islands said in separate statements on Friday that Wirecard was not a client.
“Wirecard is not a client of the bank. The document claiming the existence of a Wirecard account with BDO is a falsified document and carries forged signatures of bank officers. The matter has already been reported to the Bangko Sentral,” BDO said.
BPI also said Wirecard was not a client. “Their external auditor presented to us a document that claimed that they are a client. We have determined that the document is spurious. We continue to investigate this matter,” the bank said.
Diokno said the Philippine banking system was in a strong position going into the coronavirus pandemic. Its assets rose to P18.7 trillion ($374 billion), up by 9.3 percent compared to the level in the same period last year.
He said the banking system was also well capitalized as its capital adequacy ratio of 16 percent was well above the minimum threshold set by the Bangko Sentral at 10 percent and the Bank for International Settlements at 8 percent.
Loan quality remained satisfactory amid continued loan growth. The non-performing loan ratio was a manageable 2.3 percent as of end-April 2020, slightly higher than the 2.1 percent as of end April 2019.
The Japan Credit Rating Agency upgraded its rating on the Philippines from “BBB+” to “A-” with a stable outlook on June 11, saying it believes the country can withstand the impact of the pandemic. It also underscored the strength of the banking system for the stable outlook.