NBI nabs suspect in Metrobank P900-M fraud case

MANILA, Philippines (UPDATED) – The National Bureau of Investigation (NBI) on Friday, July 21, presented the bank officer suspected of committing the P900-million internal fraud at the Metropolitan Bank and Trust Co (Metrobank).

Maria Victoria Lopez, 54, Vice President of the Corporate Service Unit at Metrobank’s Makati head office, stood behind NBI officials in an orange shirt worn by detainees, her entire head covered by a scarf as authorities detailed her alleged fraudulent transactions.

NBI officials said in a news briefing that Lopez faces charges of qualified theft, falsification and violation of the General Banking Law.

NBI spokesperson Ferdinand Lavin said Lopez was arrested while trying to move the stolen money to an unspecified personal account. The money was taken from the credit facility of one of the Metrobank's biggest corporate clients.

"The biggest loser of this is the integrity of the banking system," Lavin said.

The NBI spokesman said Lopez had refused to cooperate in the investigation.  "At this point of the investigation, she’s not cooperating; she’s not talking," he said.

He said Lopez had served Metrobank for over 30 years and received a monthly compensation of at least P250,000. NBI officials said Lopez was trusted by big clients.

The Ty family-led bank on Friday announced the arrest of the suspect in an NBI entrapment operation earlier this week.

“Upon our own discovery, the Bank immediately caused the arrest of the individual involved in this case, who has been detained by the authorities since Monday,” Metrobank said in a disclosure to the stock exchange on Friday.

'Business as usual'

The bank did not confirm how much was stolen or the time-frame of the fraud, but stressed it did not affect its customers.

Metrobank pointed out that 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."

“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. The Bank cannot further comment on the case as it has already been filed,” it added.

The Philippine Daily Inquirer earlier reported that Metrobank had been hit by a multimillion-peso case of internal fraud involving a bank officer who had funneled at least P900 million into a fictitious Universal Robina Corporation (URC) account and then channeled the cash to other bank accounts.

The report said the amount involved could reach P2.5 billion.

NBI officials said on Friday while the period covered by the fraud has yet to be determined, it's possible that it was carried out over a long period of time.

'Qualified theft'

In response, the Bangko Sentral ng Pilipinas launched a probe into the internal security controls of the bank which BSP Governor Nestor Espenilla Jr called "qualified theft."

The House of Representatives’ Bank’s committee announced it will summon representatives from the BSP and Metrobank to explain how the incident happened.

News of the fraud caused the shares of publicly-listed Metrobank to drop by 4.97% as 2:35 pm on Friday.

Online stock brokerage firm COL Financial, however, maintained its buy rating for Metrobank (PSE: MBT) on the belief that  its financial health will not be affected in the long term.

“While the reported amount is alarming, we believe the incident should have no lasting effect on MBT’s operations. Note that the fraud has already been discovered and the alleged perpetrator caught. This should allow the bank to strengthen its internal operations to prevent similar incidents from happening in the future. In addition,” the brokerage said in a note to investors on Friday afternoon.

“We believe that the bank could realistically,get back part of the money that was taken, thus minimizing its losses. More importantly, note that no individual depositor lost money in this incident (as the funds were effectively taken from the bank itself). As such, it should have minimal impact on its relationships with MBT’s clients going forward,” it added.

COL Financial described the drop in Metrobank’s stock price as “an overreaction” by investors and said it fully expects it to weather the storm.

“Assuming the worst-case scenario of the bank losing P2.5 billion (assuming no part of the money will be returned and no insurance collection), MBT’s equity capital would go down by just 1.2%. While its 2017 income could drop by 12% assuming it fully provides for the reported amount, the drag will not be recurring.” COL Financial said.

Metrobank is the country’s second largest bank in terms of total assets with P1.9 trillion as of Q1 2017. It also reported a net income of P6.21 billion for the same period.

URC won’t incur losses

Meanwhile, the Gokongwei-led URC, a customer of Metrobank, said it would not be affected financially by the fraud. It noted that URC and its Metrobank account were mentoned in connection with the case.

"Even as Metrobank continues to conduct an internal investigation on the matter, we would like to assure everyone that URC will not incur any financial loss whatsoever and that the integrity and security of URC and its active accounts at Metrobank remain unaffected by the said incident," URC said.

It thanked Metrobank President Fabian Dee for alerting the company about the "unfortunate development and his assurance that URC will not be financially impacted in any way by this incident."

"We take this occasion to also reiterate our confidence with Metrobank as we continue to conduct regular, business as usual transactions with them,”  it added – With a report from Agence France-Presse/Rappler.com