[MANILA] The Philippine central bank sanctioned Metropolitan Bank & Trust after the regulator investigated an alleged internal fraud that cost the lender 1.75 billion pesos (S$47.1 million).

Sanctions ranged from a reprimand to the suspension of directors and officers who were complacent in their duties, the Bangko Sentral ng Pilipinas said, without naming them.

The nation's second-largest lender was also ordered to allocate about 4.45 billion pesos of its capital to cover higher operational risk, the central bank said in a statement.

Police in July arrested a Metrobank official after she was suspected of funneling loans into fictitious accounts that were transferred electronically to other private accounts she owned, investigators said.

In deciding on penalties, the central bank said it took into account Metrobank's strong financial condition and the corrective actions the bank took to contain further financial damage. The lender owned by billionaire George Ty is sound, the regulator said.

The board and senior management accept accountability for the incident and will implement the directives, Metrobank said in a statement. "The perpetrator acted alone and for her sole benefit" and no customer was affected, it said.

Shares of Metrobank rose 0.1 per cent at 10.11am in Manila. The nation's benchmark stock index slid 1 per cent.

BLOOMBERG