NongHyup-Bank-CEO-Lee-Dae-hoon
NongHyup Bank CEO Lee Dae-hoon Courtesy of NongHyup Bank

NongHyup Bank, also known as NH Bank, is trying to deal with anti-money laundering (AML) issues, which left its New York branch facing an $11 million fine in 2017.

NH Bank chief Lee Dae-hoon made the point during a recent interview with the Yonhap News Agency.

Last year, I visited the Federal Reserve Board and Department of Financial Services (DFS) twice to explain our improvements,” Lee said. “I plan to visit them this year in May and November to build up perfect trust.”

He added that its New York branch will concentrate on building trust rather than expanding business operations. In addition, he said it could record a deficit this year because of consulting fees.

In late 2017, the New York State DFS levied the $11 million fine on NH’s New York branch for its negligence in AML compliance.

In consideration of the track record of the New York State DFS, some said the amount was not that large _ it has slapped much bigger fines on others. But $11 million was almost twice as much as the net income of the NH New York branch in 2016.

Back then, the FDFS was very negative about the lender’s practices after conducting three examinations following the branch’s launch in 2013.

Ideally, a bank’s examination ratings should improve over time as the institution receives the benefit of the guidance provided by the examiners and works to implement solutions to issues uncovered during the examinations,” it said.

As described more fully below, the opposite occurred at NongHyup – each successive examination uncovered an increasing number of deficiencies in connection with the New York branch, including its transaction monitoring processes and procedures.”

Click here to see the full text of New York State DFS’s consent order to NongHyup Bank.

Overseas expansion

CEO Lee, who took charge of the lender early 2018, also said that the lender now works on making inroads into such southeast Asian countries as Vietnam, Myanmar and Cambodia.

Over the long term, he noted that the Seoul-based outfit looks to set up branches in Dubai and Belgium.