On June 8, financial industry sources reported that NH Nonghyup Financial Group held an extraordinary board meeting on May 29, where it approved a third-party allocation capital increase of approximately 400 billion won for NH Investment & Securities.
This capital increase comes about ten months after a previous 650 billion won boost last August, with the funds intended to enhance the comprehensive investment account (IMA) business and strengthen corporate finance competitiveness. An NH Nonghyup Financial official stated, "This is a strategic decision to expand productive finance and secure competitiveness in future growth businesses."
Other financial groups are also actively bolstering their securities firms. Earlier this year, KB Financial Group decided to raise 700 billion won for KB Securities, marking its first significant capital increase for its securities subsidiary since the merger of Hyundai Securities and KB Investment Securities in 2016. Woori Financial Group also injected 1 trillion won into Woori Investment Securities in April and is considering additional support next year.
Although Shinhan Financial Group has not directly pursued a capital increase, it is focusing on enhancing the competitiveness of its related subsidiaries. Shinhan Financial Chairman Jin Ok-dong is set to preside over a group management meeting on June 10 at the TP Tower in Yeouido, where Shinhan Investment & Securities and Shinhan Asset Management are headquartered. This will be the first time Chairman Jin leads a group management meeting in Yeouido, and the agenda is expected to include strategies for enhancing the group's capital market competitiveness.
The trend of financial groups supplying capital to their securities subsidiaries reflects the growing importance of securities firms to overall group performance.
While banks have traditionally driven profits, their growth potential is now limited due to government regulations on household loans. The government's emphasis on productive and inclusive finance has increased demands for public roles, making it difficult to sustain a profitability-focused growth strategy.
In contrast, the securities sector is gaining prominence amid a booming stock market. The KOSPI index has surpassed 8,000, and investor deposits are increasing, contributing to a phenomenon known as 'money move' as funds shift into the stock market. With financial authorities selecting IMA operators and intensifying competition in issuance and corporate finance (IB), financial groups are focusing on nurturing their securities firms as future growth drivers.
According to the Financial Supervisory Service, the share of net profits from financial investments, including securities firms, accounted for 17% of the total net profits of the ten domestic financial holding companies last year, marking a 5 percentage point increase from the previous year. In contrast, other sectors, including banking (-2.4 percentage points), insurance (-2.6 percentage points), and specialized credit finance (-1.3 percentage points), saw declines in their shares.
A financial industry official noted, "While the banking sector faces growth limitations due to ongoing regulations and interest rate environments, the securities sector is experiencing significant growth potential amid a thriving stock market. We can expect continued active movements from financial groups aiming to secure growth drivers centered on capital markets."
* This article has been translated by AI.
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