As sanctions loom, Metrobank boosts controls
“This cannot happen again.”
Thus vowed Metropolitan Bank and Trust Co. chair Arthur Ty as the country’s second-largest financial institution braced itself for a slew of sanctions over a P1.75-billion internal fraud case that was uncovered last July.
The scam—blamed on former Metrobank vice president Maria Victoria Lopez, who allegedly faked loans by legitimate corporate clients, but diverted the proceeds to bank accounts she controlled—was alleged to have been going on for several years before the bank official was caught red handed and arrested.
Yesterday, Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said regulators would announce today the punitive measures that the BSP’s policy-making Monetary Board would impose on the bank after a four-month audit and investigation.
Apart from ordering Metrobank to tighten internal controls, BSP may also impose administrative sanctions on bank officials who had oversight over the processes that allowed the rogue banker to perpetuate the scam.
Even as the central bank was conducting its probe, however, the management of the publicly listed financial giant has already taken proactive steps to prevent a repeat of one of the biggest cases of bank fraud in the country.
Ty said Metrobank was spending no less than P4 billion on new automated systems that would strengthen its core banking processes, including the use of artificial intelligence to help speed up processes for legitimate clients and their transactions, while isolating problematic or suspicious cases for the proper human intervention.
“It’s a major investment that we’ve embarked on even before this happened, but it’s even more important now,” he said.
Ty—the son of Metrobank founder George S.K. Ty—said the bank would also commission an external review and audit by an international third party firm to serve as a “fresh set of eyes” that would take a closer look at internal processes and recommend improvements.
“It’s actually a top-down review,” he said, explaining that the goal was to bring in global standards and best practices. “There are a lot of threats now that are being addressed on a one-off basis. Cybersecurity is one. Solutions have to be integrated.”
Meanwhile, Metrobank president and CEO Fabian Dee said that efforts to recover the funds allegedly stolen by Lopez looked “very promising,” adding that a search of the rogue banker’s personal records yielded a breakthrough that has “facilitated asset search and recovery.”
“We know exactly what [properties] to attach,” he said. “And the more you attach, the more she wants to cooperate. It’s pointless for her to resist. But we’re still pursuing even offshore assets and accounts.”
The Metrobank chief described his 54-year-old former employee as “cold hearted” who seemed unfazed and has remained stoic from the time of her arrest at the Metrobank headquarters last July to her eventual transfer from the National Bureau of Investigation detention facility to the Makati City jail.
“When she was arrested, she didn’t even cry. It was like she was expecting it,” Dee said. “When she was transferred to the Makati City jail, we thought the discomfort and the presence of [hardened criminals and difficult living conditions] would have an effect on her. But no. She’s good.”
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