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KGI Bank increases risk management following huge loss in March

2018/04/24 18:19:04

CNA file photo

Taipei, April 24 (CNA) Taiwan's KGI Bank has strengthened its risk management measures following a currency trading incident in March that led to a loss of NT$240 million (US$8.11 million) for the bank.

KGI addressed the incident Tuesday, saying that one of its traders made a wrong call in a trade involving the Canadian dollar, which yielded horrible results due to the volatility of the currency at that time.

The loss made up the bulk of March's after-tax loss of NT$283 million, although the bank maintained that it was trading with its own capital and not its clients' money, so its clients' interests were unaffected.

Spokesman Eddy Chang (張立人) of the China Development Financial Holding Corp., which is the parent company of KGI Bank, went on record to say that the incident was reported immediately to management, following which the bank reformed its risk management system to make up for any gaps.

Furthermore, the trader who was responsible for the mistake has voluntarily resigned from said position and has left the company, Chang noted.

The Financial Supervisory Commission said that it is currently reviewing KGI's report on its investigation into the matter, and should it find that KGI was at fault due to flaws in oversight and management, it could impose a fine of up to NT$10 million.

Even with the heavy loss, KGI Bank made an after-tax profit of NT$678 million in the first quarter of the year, posting NT$0.15 in earnings per share.

(By Tien Yu-pin, Tsai Yi-chu and Kuan-lin Liu)
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