Monetary Board approves sanctions on Metrobank

November 28, 2017

The Monetary Board (MB), the policymaking body of the Bangko Sentral ng Pilipinas (BSP) approved the imposition of sanctions on Metropolitan Bank and Trust Company (MBTC) in connection with the examination conducted by the central bank relating to the P1.75 billion fraud allegedly perpetrated by one of its officers. The fraud case, which was uncovered in August, involved the granting of loans into a fictitious account made in the name of a legitimate client, Universal Robina Corp. A Metrobank vice president was arrested by authorities as a suspect. "The sanctions imposed ranged from reprimand to suspension of directors and officers who failed to perform adequate oversight and/or have been complacent/remiss of their duties and responsibilities," the Monetary Board statement said. "MBTC was required 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," added the Monetary Board. Metrobank was also required to execute and submit a letter of commitment, to be implemented and completed within one year, to enhance corporate governance, credit administration, internal controls and audit, risk management, and customer on-boarding and monitoring processes. In a disclosure to the Philippine Stock Exchange, Metrobank said " the board and senior management accept accountability and command responsibility for the incident and commits to implementing the directives. MBTC assures the public that bank operations remain business as usual." Metrobank said a 100 percent audit, the bank "reiterates that 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," Metrobank said. Metrobank said "with P2.0 trillion in assets and P210 billion in equity, MBTC is in a strong position to set aside P4.45 billion of capital reserve in line with the BSP’s directive.". Metrobank said it "has proactively absorbed the entire amount related to this incident in the 3Q. Despite this, the growth momentum of the bank remains robust and results for the year are ahead of plan." DMS