Monetary authorities have reportedly discovered a previously undisclosed financial “hole” at the Banco Mercantil to the tune of RD$2.4 billion. This new amount would increase the total sum of missing funds at Mercantil to RD$8.9 billion. According to Emilio Ortiz of El Nacional, the recent discovery is causing the new owners, the Republic Bank of Trinidad and Tobago to think about withdrawing their support for the bank. A source close to the scene told the reporter that the forensic audit carried out before Republic Bank took over the troubled local institution failed to turn up the missing monies. As the story goes, the RD$2.4 billion was used by a subsidiary of the Banco Mercantil called Servivent Corporation, which uses property mortgages and chattel mortgages to gain access to resources from Mercantil. Later on, these “guarantees” were nowhere to be found. During the most recent meeting of the Monetary Board, officials of the Republic Bank of Trinidad and Tobago said that if the government does not assume this additional debt, they will have to consider leaving the country. The Monetary Board was not willing to take on this burden as it would enlarge the quasi-fiscal debt and endanger the possibility of reaching an agreement with the IMF.
Nonetheless, in today’s press the Central Bank denies that the discrepancy exists. Apolinar Veloz, a manager at the CB, said that no such “hole” has been discovered in the Banco Mercantil. The official said that reports of the file presented to the Monetary Board were “erroneous” and the story carried in El Nacional was an incorrect interpretation of the facts. Veloz called the story an “exaggeration” and said that four weeks ago the Central Bank and the Superintendent of Banks began conversations with representatives of the Republic Bank and the Banco Mercantil. Veloz said, according to a report in Diario Libre, that the Central Bank was aware of the source of Mercantil’s claims and that they were the result of a series of factors that reflect negatively on the bank’s capital. According to Veloz, the problem comes from the poor performance portfolio of the Mercantil DR (MDR), an offshore subsidiary of Banco Mercantil, which does not appear on the books of Banco Mercantil Dominicano.