State-run Mega International Commercial Bank (兆豐銀行) has inked a contract for New York experts to establish a compliance mechanism, newly installed chairman Michael Chang (張兆順) said yesterday.
The mechanism requires the establishment of a new information technology system in all outlets worldwide and could further strain the lender’s profitability, after it paid stiff fines for compliance failures at its New York branch, Chang told a news conference.
“The compliance costs are significant and might put Mega Bank on unequal footing with domestic peers in earning ability,” Chang said.
He declined to give numbers about the compliance costs.
The mechanism is to include a database that allows Mega Bank to gain a better understanding of its customers and track their accounts and transactions, Chang said.
It also entails the purchase of information from news media for any mention of the company so it can better plan responses, Chang said.
However, Mega Bank would not spare the costs, as financial authorities in New York and elsewhere will likely adopt stricter standards when inspecting the bank, after the New York State Department of Financial Services fined Mega Bank’s New York branch US$180 million for compliance failures, Chang said.
The Financial Supervisory Commission two weeks ago imposed a fine of NT$10 million (US$318,147) on the bank for similar violations.
In addition, Mega Bank, the main source of income for parent Mega Financial Holding Co (兆豐金控), is barred from opening new overseas branches and offices until it meets compliance requirements, the commission said.
The punishments are to constrain earning ability, as overseas and offshore banking units generate about 60 percent of Mega Financial’s profit, Chang said.
Other domestic banks might also have to introduce expensive compliance mechanisms to avoid regulatory missteps, Chang said, adding that such mechanisms are commonplace in large foreign financial institutions.
Mega Bank is to consult foreign banks in Taiwan during a special board meeting tomorrow to discuss the mechanism and the costs involved.
Following one month of investigation, Chang attributed the compliance failure to a lack of professional knowledge and the underestimation of its seriousness by former executives.
The probe into potential irregularities is ongoing, he said.
The commission is scheduled to brief lawmakers about suspicious accounts and transactions at Mega Bank’s New York branch during a private meeting of the legislature’s Finance Committee today.
Units of Intel Corp and Samsung Electronics Co are targeting to resume full operations of their Ho Chi Minh City plants by the end of next month, a move that could provide relief to global supply chains. Saigon Hi-Tech Park is helping its tenants, many of which are running at about 70 percent capacity, to operate fully next month, park deputy manager Le Bich Loan said in a phone interview. She did not elaborate on the steps the park is taking, particularly efforts at bringing back workers who fled to home provinces. The Ho Chi Minh City unit of Nidec Sankyo Corp,
CHIP CRUNCH: Apple’s woes show that even the king of the technology world is not immune from global shortages made worse by the COVID-19 pandemic Apple Inc is likely to slash its projected iPhone 13 production targets for this year by as many as 10 million units as prolonged chip shortages hit its flagship product, people with knowledge of the matter said. The company had expected to produce 90 million new iPhone models in the final three months of this year, but it is now telling manufacturing partners that the total would be lower because Broadcom Inc and Texas Instruments Inc are struggling to deliver enough components, the people said. Apple gets display parts from Texas Instruments, while Broadcom is its longtime supplier of wireless components. One Texas
EVA Airways Corp (長榮航空) and China Airlines Ltd (中華航空), the nation’s two major airlines, reported accelerated revenue growth in the third quarter compared with the previous two quarters, thanks to robust air cargo business. EVA Airways yesterday said sales for last quarter rose 40 percent year-on-year to NT$25.81 billion (US$917 million), compared with an increase of 25 percent in the second quarter and a fall of 35 percent in the first quarter. China Airlines said sales grew 39 percent to NT$34.6 billion in the third quarter, after gaining 10 percent in the second quarter and falling 14 percent in the first quarter. EVA
Hon Hai Precision Industry Co (鴻海精密) is embarking on a recruitment drive to hire 200,000 workers in Shenzhen, China, as it ramps up production of the new iPhone 13 series, Chinese business news outlet Eastmoney.com reported. Hon Hai is seeking to recruit those heading back to the city after China’s seven-day National Day holiday, which began on Oct. 1, to help churn out the estimated 100,000 iPhone 13s produced on the site each day, the report said. Following last month’s global release of the iPhone 13, Hon Hai entered its traditional peak season, and workers at its Chinese production sites are said