Bermuda Commercial Bank yesterday revealed it has written off almost $2.4 million after a former employee ran up the amount with "unauthorised transactions".

In September The Royal Gazette revealed fraud officers had launched an investigation at Bermuda's third bank into allegations that a former employee stole over $1 million.

The amount was revealed yesterday by the bank in its annual report to shareholders to be $2.4 million, and the bank said it was to vigorously pursue its insurance cover to collect the missing money.

The bank stated in its annual report: "Unusual items consist of a reserve taken for unauthorised transactions of a former bank employee that were identified during the year. Management of the bank has estimated the financial impact of these unauthorised transactions at $2,369,623 before insurance recoveries.

"Management intends to vigorously pursue insurance coverage on these losses and will record a receivable from its insurance provider when both the amount and collectibility are reasonably determinable."

In August the Commercial Crime Unit detectives arrested a 41-year-old Devonshire woman after management at the bank became alerted to a series of suspicious transactions.

The Royal Gazette understands management at the bank discovered the irregular transactions during an internal audit and called in the Commercial Crime Unit.

Detectives arrested the woman, who has since resigned from her position as a global custody administrator at Bermuda Commercial Bank, although it is believed she has not yet been charged with any offence.

A Police spokesman confirmed in September: "A 41-year-old Devonshire woman has been arrested in connection with a report of a theft at Bermuda Commercial Bank. The investigation is still on-going."

Commercial Bank president and chief operating officer Timothy Ulrich said at the time: "This matter is in the hands of our attorneys and the governmental authorities and those authorities and our attorneys need to be able to proceed with their investigation or legal action and the outcome will ultimately be determined by the courts."

Mr. Ulrich added: "It is our view that all client accounts and funds are secure."

A well placed source said: "I know the fraud squad officers were called in and it seems a substantial amount of money gone missing from an account that she had administered.

"I was very surprised because she was very popular at the bank. She had a security pass that would override some other passes so the security people came in and changed the locks."

The Royal Gazette understands no charges have yet been brought against the woman.

BCB results in Business.