Rogue bankers, rogue states

By: Malou Guanzon Apalisok July 24,2017 - 10:50 PM


As expected, Metropolitan Bank and Trust Company are trying to downplay the injury caused by the internal fraud that has the bank reeling not just from huge losses but, more importantly, from the damage to the integrity of its internal controls which is at the core of any financial institution.

Corporate officials are saying the in-house heist will not affect the business and no money was stolen from depositors. Even the Bangko Sentral ng Pilipinas (BSP) is highlighting the listed lender’s assets of P1.9 trillion, net earnings of P18.1 billion in 2016 and P5.6 billion during the first quarter of the current year to emphasize that the funds (amounting to as high as P2.5 billion) siphoned off by the rogue official would be inconsequential compared to the bank’s vast financial resources.

However, amid reports that Metrobank shares dropped by 5.03% to P86.90 on Friday last week coming from P91.50 per share the previous day, even owner George Ty will feel nervous by the impact of the swindle.

Financial scandals are comparable to earthquakes because they cause anxiety among investors who usually equate such disgrace to bad governance in the financial industry and regulatory bodies.

It will become even tougher for Metrobank in the coming days because aside from the Bangko Sentral ng Pilipinas doing its own probe, Congress is also joining the fray.

As we know, congressional investigations in aid of legislation tend to be sensational and are often without value except for potential media mileage for legislators who want to ride on the controversy.

In the center of the in-house heist is assistant vice president and Corporate Service Management head Maria Victoria S. Lopez. She is said to have made out fake loan disbursements using the credit line of Universal Robina Corp. (URC), a long-time client of Metrobank. Apparently, Lopez pulled rank and evaded internal controls such that she was able to draw tranches of P30 million over the past three years from the URC credit line. The question now is whether she acted alone or she had cohorts from inside and outside the bank.

There was a time when bank robberies are pulled off by masked men with high-powered firearms who will not have second thoughts of killing anybody who would try to stop them. These bank robbers of old are notorious for studying elaborate security control systems knowing they are made to guard the bank’s assets and the money of depositors.

But technology has changed the equation and although we still hear of old-style bank heists, bank robberies nowadays are done in the cyber space with the participation of insiders who are familiar not only with the system but also the weaknesses of the internal controls. The profile of bank robbers has also drastically changed. They include not just dishonest bank officials and elements of the underworld but also rogue states.

In February last year, the global financial sector was rocked by the cyber-heist of the Central Bank of Bangladesh after hackers tried to transfer $950 million from the New York Federal Reserve (where the Bangladeshi Central Bank has $1 billion in deposits) to fictitious bank accounts in several banks around the world. As we know, some $81 million was transferred to a commercial bank in the Philippines, a scandal which costed the head of its top official and prompted the US Federal Bureau of Investigation to launch a probe.

In case you missed it, the FBI disclosed in March this year that the cyber-heist of the Bangladesh Central Bank was “state-sponsored.” Subsequent reports tagged North Korea as responsible for the attack on the Bangladeshi financial system, one that stands as the world’s biggest cyber-heist to date.

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TAGS: bankers, rogue, States

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