https://www.koreaherald.com/article/10475622

Shinhan Bank America, the US unit of South Korea’s Shinhan Bank, has been released from an injunctive order by the US government that subjected it to heightened scrutiny under its anti-money laundering program.

The Federal Deposit Insurance Corporation, the US agency insuring deposits in commercial banks and savings institutions, announced its consent order against the bank terminated as of March 13, ending nearly eight years of intensified supervision for the New York-based institution.

Shinhan Bank America had been under regulatory oversight since June 2017, when the FDIC issued the original consent order citing deficiencies in compliance controls. The order was amended and restated in October 2022 to incorporate updated requirements, with the bank agreeing to bolster oversight of its anti-money laundering and countering the financing of terrorism program as part of the revised settlement.

A consent order is a formal agreement between the FDIC and a bank to address regulatory violations or unsafe practices. While entered voluntarily, the agreement becomes legally binding once signed and can trigger enforcement actions if violated.

In September 2023, Shinhan Bank America was fined a combined $25 million by US state and federal regulators — including the FDIC, the Financial Crimes Enforcement Network and the New York State Department of Financial Services — for repeated violations of the Bank Secrecy Act and failure to address systemic weaknesses in its anti-money laundering program. The penalties contributed to the US subsidiary posting a net loss of 26.7 billion won ($18.5 million) that year.

With the termination of the consent order, Shinhan Bank America is poised to strengthen its US operations. During the order’s duration, the lender faced various operational restrictions, including the inability to enter new business ventures or make management changes without FDIC approval.

A wholly owned subsidiary of Shinhan Bank, the US unit operates 14 branches across five states: New Yorklead, New Jersey, California, Texas and Georgia. As of the end of 2024, it held $173 million in assets. Its performance improved significantly last year, reporting operating revenue of 131.34 billion won and a net profit of 4.85 billion won.

Shinhan Financial Group, Shinhan Bank’s parent and Korea’s second-largest financial conglomerate, leads peers in global business, generating around 760 billion won in net profit from overseas operations in 2024.