April 20, 2024
Finance
NongHyup, IBK CEOs to brief NY authorities on anti-money laundering efforts
[THE INVESTOR] The heads of NH Nonghyup Bank and Industrial Bank of Korea are heading to New York to brief financial authorities on the steps they have taken to curb money laundering, industry sources said on Nov. 12.
“The New York State Department of Financial Service is believed to have recently completed its inspection of some domestic banks. Before the results are announced, NongHyup Bank CEO Lee Dae-hoon and IBK CEO Kim Do-jin will have a chance to brief the authorities on steps they have taken to boost their compliance monitoring systems,” according to a source.
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IBK CEO Kim Do-jin (left)and NongHyup Bank CEO Lee Dae-hoon |
The financial regulator launched probes into six Korean banks operating in the state in June. It came several months after NongHyup’s New York branch became the first Korean bank to be fined for negligence of anti-money laundering compliance. It faces a hefty fine of US$11 million, almost twice as much as the net profit of its branch in 2016.
Lee is scheduled to meet officials from the Federal Reserve Bank and the New York DFS next week. This is his second visit after he checked the progress of the AML monitoring system in February. Since then, NongHyup has ramped up its compliance team from a mere two to seven members and adopted an AML monitoring system.
IBK’s Kim will also meet New York’s financial authorities in December. Its branch underwent a regular DFS inspection in July. It had received a warning in 2016 for a lax AML system and underwent an investigation this summer.
“The bank has spent a lot of money to boost AML and compliance systems since 2012. Once the DFS results are out, it would be an opportunity to resolve some uncertainties,” an IBK official said.
Korean lenders are closely watching the action by US financial authorities as the Terrorism and Financial Intelligence department of the US Department of Treasury met seven local banks to warn them of North Korea-related business in September.
“As the US has strengthened monitoring of domestic financial organizations following recent sanctions on North Korea, we have no choice but to be nervous about the DFS results,” the industry source said.
By Park Ga-young (gypark@heraldcorp.com)
