By Kim Yoo-chul

Korea’s leading financial institutions are reconsidering their investment banking strategies in the face of challenging market conditions, heated competition and dwindling profits. They increasingly turn to the international market.

In recent years, lenders have attempted to cut their longtime reliance on the local market. But the results have been mixed in terms of profit growth. Many of them failed to chalk up good results due to lack of business focus.

Nonghyup Financial Group Chairman Kim Yong-hwan is trying to make a difference. The group is attempting to actively take part in large financing projects through close collaboration with banks and life insurance companies. Its eventual goal is to become the Korean version of Goldman Sachs.

“Nonghyup handles deals worth about 6 trillion won from overseas, annually. I want NH Investment Securities, the group’s securities unit, to lead the way for external growth of corporate investment financing business. All Nonghyup bank branches in the country are asked to revamp their business structure,” Kim said in a recent meeting with newly promoted executives.

“If everyone follows the same business model, a systemic risk tends to rise. We have to facilitate resources to continuously grow our investment banking business. Nonghyup Financial is the only financial holding company in Korea which holds more than 200 trillion won management in assets.”

Nonghyup’s focus on the investment banking sector would surprise its competitors, which have mostly relied on traditional retail and corporate banking.

Commercial banking and investment banking are totally different businesses and have different logic. Hence, a powerhouse of the former does not automatically develop into a leader of the latter.

The chairman has pushed for improving communication between front and back offices and for swifter implementation of strategies.

“All key information relating to investment banking businesses must be shared between relevant group affiliates. I believe the latest wins in mega project financing deals were the results of the partnership between our units,” the chairman said.

Nonghyup aims to achieve 1 trillion won in profit by the end of this year. Kim hopes Nonghyup Bank would take up 78 percent of its year-end profit target.

He said the bank will expand its business territory beyond Korea to make the financial group more sustainable. Nonghyup is in talks with several banks in Indonesia with an aim to acquire stakes. It also plans to invest in banks in Cambodia and Vietnam.

Despite repeated efforts for external growth through mergers and acquisitions, Korean players still lag far behind major overseas investment banks.

As of 2015, Goldman Sachs, a top-tier investment bank, was known to have over $100 billion in net capital, while its rival Morgan Stanley was known to have more than $85 billion.







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Fonte: http://www.koreatimes.co.kr/www/common/vpage-pt.asp?categorycode=488&newsidx=242243

Os textos, informações e opiniões publicados neste espaço são de total responsabilidade do(a) autor(a). Logo, não correspondem, necessariamente, ao ponto de vista do Central da Pauta.

​Os textos, informações e opiniões publicados neste espaço são de total responsabilidade do(a) autor(a). Logo, não correspondem, necessariamente, ao ponto de vista do Central da Pauta.