BANKING
Banamex to forfeit US$97m
Banamex, the Mexican affiliate of US giant Citigroup, is to forfeit US$97.4 million after admitting to having a weak anti-money laundering program, the US Department of Justice announced on Monday. The penalty resolves a criminal probe at Banamex USA after investigators found that from 2007 through 2012, Banamex conducted fewer than 10 investigations on more than 18,000 alerts involving more than US$142 million in potentially suspicious transactions totaling more than US$142 million, the department said. The department signed a non-prosecution agreement with Banamex USA after it agreed to invest in remediation and cooperated with the criminal probe, the agency said. The penalty is on top of US$140 million in civil fines Banamex paid to US and California agencies over a separate bank secrecy act probe. In October, Citigroup announced it was renaming its Mexican unit Citibanamex and pumping US$1 billion into the business. In February 2014, Citigroup announced a one-time charge of US$235 million after uncovering fraud involving a client that borrowed US$583 million from a Banamex unit.
MANUFACTURING
Arconic board to expand
Elliott Management is to add three members to the board at Arconic Inc, with one to have a say in naming the firm’s next CEO. Elliott owns more than 13 percent in Arconic and has pushed for management changes, complaining of underperformance at the New York-based maker of aluminum parts for the aviation and automotive industries. Arconic was created after Alcoa Inc was split in two last year. As part of the agreement announced on Monday, one of Elliott’s board members will also be added to the CEO search committee. Elliott’s replacement choice — former Spirit AeroSystems CEO Larry Lawson — will be considered. Former CEO Klaus Kleinfeld resigned abruptly last month after he sent a letter containing veiled threats to Elliott founder Paul Singer. Arconic also said on Monday that three of its own nominees will be added to the board.
MORTGAGES
Paragon profit falls
British buy-to-let mortgage lender Paragon Group of Companies PLC reported a marginal fall in first-half profit, but said its buy-to-let pipeline had more than doubled, pointing to full-year lending volumes topping its expectations. Paragon, which has been diversifying its business from its core market, made a pretax profit of £69.4 million (US$90.1 million) in the six months to the end of March, down from £69.5 million the year before. The company is paying an interim dividend of £0.47 per share, up 9.3 percent.
STOCK MARKETS
Exchange nears deal
Singapore Exchange Ltd is nearing a deal with the city-state’s technology regulator to develop a system designed to encourage local start-ups to list on the bourse, people familiar with the matter said. According to the agreement, the bourse operator would help pair technology companies with investors with the aim of securing their listing in the city-state, the people said. SGX and Infocomm firm Media Development Authority are close to finalizing the accord, said the people, who asked not to be identified because the talks are private. SGX’s tie-up with the regulator will deepen the exchange’s so-called sector approach, with four industries, including technology, the focus of its listings strategy.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by