Foreign Securities Firm on a Roll

The Korean operation of BNP Paribas Securities Services earned 1.86 billion won last year and decided on a dividend payment of 5.038 billion won to record a payout ratio of 271%.
The Korean operation of BNP Paribas Securities Services earned 1.86 billion won last year and decided on a dividend payment of 5.038 billion won to record a payout ratio of 271%.

 

The Financial Services Commission recently allowed BNP Paribas Securities Services to add exchange market derivatives investment brokerage to its business portfolio in South Korea. At present, BNP Paribas Securities Services is covering all types of derivatives traded on the South Korean stock exchange. This is one of many examples of foreign securities companies expanding their business in South Korea nowadays.

Last year, they succeeded in boosting their operating profits in the country. For instance, Goldman Sachs Securities’ reached 109.8 billion won and Credit Suisse Securities’ amounted to 92.9 billion won while those of UBS Securities, JP Morgan Securities, Merrill Lynch Securities and Morgan Stanley totaled 67 billion, 53 billion, 47.5 billion and 44.8 billion won, respectively.

They are paying huge dividends, too. According to the Korea Financial Investment Association, seven securities companies in South Korea recorded a dividend payout ratio of more than 90% this year and six out of them are foreign ones. BNP Paribas Securities Services earned 1.86 billion won last year and decided on a dividend payment of 5.038 billion won to record a payout ratio of 271%. The figures are 38.5 billion won, 38 billion won and 99% for JP Morgan while 36.6 billion won, 36 billion won and 98% for Morgan Stanley. The payout ratios of Credit Suisse, Goldman Sachs and Deutsche Securities reached 96%, 96% and 91%, respectively. In the meantime, the ING Group is preparing to start securities business in South Korea within the first half of this year.

Their move is quite contrary to that of the other foreign securities companies. Recently, Goldman Sachs Asset Management, the Royal Bank of Scotland and Barclays Capital Securities left the South Korean market one after another while rumors are circulating about the withdrawal of Standard Chartered Bank.

“Different foreign financial investment companies have different business focuses and the same situation does not apply to all of them,” said an industry insider, adding, “Their withdrawal from South Korea is unlikely to lead to an exodus as each of foreign securities companies doing business in the market follow directions from its headquarters in a flexible way.”

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