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South China Morning Post
22-07-2025
- Business
- South China Morning Post
HKMA takes action against 3 banks over money laundering, counterterrorism rules
The Hong Kong Monetary Authority (HKMA) on Tuesday took disciplinary action against three banks for failing to comply with regulations covering money laundering and counterterrorist financing. Advertisement The local branch of Indian Overseas Bank, Bank of Communications (Hong Kong), and Bank of Communications' Hong Kong branch were found to have weaknesses in their systems for monitoring suspicious transactions, according to an HKMA statement. Indian Overseas Bank faced the heaviest penalty, an HK$8.5 million (US$1.08 million) fine, and was ordered to conduct a review of its past transactions and implement new measures to fix its compliance shortcomings. The bank was found to have gaps in its transaction monitoring system and its management of anti-money-laundering and counterterrorism controls. Bank of Communications (Hong Kong) was fined HK$4 million, while Bank of Communications' Hong Kong branch received a HK$3.7 million penalty. Their breaches were linked to their failure to include certain types of transactions in their shared monitoring system, reducing their ability to detect suspicious activities. The disciplinary actions followed investigations conducted by the HKMA into the banks' systems and controls for compliance with the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AML/CFT). Advertisement The deficiencies identified were linked to the banks' failures to establish and maintain effective procedures for monitoring their business relationships with customers.
South China Morning Post
17-07-2025
- Business
- South China Morning Post
HKMA dismisses ‘bad bank' rumours, saying industry remains healthy
The Hong Kong Monetary Authority (HKMA) , the city's de facto central bank, said it had no plans to establish a 'bad bank' to absorb troubled debt in the financial system, saying that the local banking sector remained healthy and profitable. Advertisement 'Overall, banks in Hong Kong maintain a healthy balance sheet; their credit risk is manageable and provisions are sufficient,' the authority said in a statement on Thursday. 'The HKMA has no intention to set up the rumoured 'bad bank'. We understand that the relevant banks also do not have such a plan.' The banking regulator saw no need to create a bad bank, as the current provisions for bad debts at banks were already sufficient, an HKMA representative added. The HKMA's statement came hours after a Bloomberg report, citing unnamed sources, indicated that Hang Seng Bank, Bank of Communications, and other lenders were in discussions about creating a bad bank. A bad bank is typically set up to buy non-performing loans and other bad debts to clean up the balance sheets of another bank. The logo of Hong Kong Monetary Authority is seen at its office in Central. Photo: Yik Yeung-man The Bloomberg report, citing Fitch Ratings estimates, said that soured loans in Hong Kong climbed to US$25 billion at the end of March, representing 2 per cent of the total and reaching a two-decade high.
