ID :
197807
Thu, 07/28/2011 - 08:47
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https://oananews.org//node/197807
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S. Korean banks seeking to bolster investment banking business
SEOUL, July 28 (Yonhap) -- South Korean banks are stepping up efforts to bolster their investment banking business in a bid to brace for the potential creation of large investment banks following a capital market law revision, sources said Thursday.
Market watchers said local banks are seeking to expand the investment banking business to find new engines of growth as the retail banking market has almost been saturated.
But they also noted that the move comes as a revised law on capital markets allowed brokerages with over 3 trillion won (US$2.8 billion) in equity capital to set up investment banks.
"Banks have refrained from entering the investment banking business after the global financial crisis. But it's inevitable now for them to find a new source of profits as the home loan market has become a red ocean long before they realized it would," an industry watcher said.
In a related move, South Korea's top lender Kookmin Bank plans to gradually increase the number of staff at its Hong Kong unit, which currently has 14 employees.
The bank aims to boost the Hong Kong operation into its main post for overseas investment banking, but the number of staff to be added to that office has yet to be decided, according to spokesman Yoo Boon-jae.
Kookmin Bank also plans to team up with KB Investment & Securities Co. in a bid to underwrite offshore securities for Korean firms.
No. 3 banking group Shinhan Financial Group Co. is seeking to enhance its corporate and investment banking business by making the group comprehensively handle such business from next year, which its flagship bank unit and securities affiliate currently handle separately.
Hana Financial Group Inc., the country's fourth-largest financial services company, plans to beef up the investment banking business of the Hong Kong operation of its subsidiary Hana Daetoo Securities Co.
South Korea, where investment banking has been weak due to regulatory restraints, enforced the capital market law in 2009 to enhance global competitiveness by abolishing rules banning brokerages from pursuing futures trading and asset management operations.
Market watchers said local banks are seeking to expand the investment banking business to find new engines of growth as the retail banking market has almost been saturated.
But they also noted that the move comes as a revised law on capital markets allowed brokerages with over 3 trillion won (US$2.8 billion) in equity capital to set up investment banks.
"Banks have refrained from entering the investment banking business after the global financial crisis. But it's inevitable now for them to find a new source of profits as the home loan market has become a red ocean long before they realized it would," an industry watcher said.
In a related move, South Korea's top lender Kookmin Bank plans to gradually increase the number of staff at its Hong Kong unit, which currently has 14 employees.
The bank aims to boost the Hong Kong operation into its main post for overseas investment banking, but the number of staff to be added to that office has yet to be decided, according to spokesman Yoo Boon-jae.
Kookmin Bank also plans to team up with KB Investment & Securities Co. in a bid to underwrite offshore securities for Korean firms.
No. 3 banking group Shinhan Financial Group Co. is seeking to enhance its corporate and investment banking business by making the group comprehensively handle such business from next year, which its flagship bank unit and securities affiliate currently handle separately.
Hana Financial Group Inc., the country's fourth-largest financial services company, plans to beef up the investment banking business of the Hong Kong operation of its subsidiary Hana Daetoo Securities Co.
South Korea, where investment banking has been weak due to regulatory restraints, enforced the capital market law in 2009 to enhance global competitiveness by abolishing rules banning brokerages from pursuing futures trading and asset management operations.
