Deutsche Securities Korea Co. is closing down its stock brokerage business in South Korea.
The company's board of directors decided on July 18 to wind up its stock sales and trading, exchange-traded derivatives trading and research businesses, according to investment banking industry sources on July 22. Accordingly, the company is planning to ask the Financial Services Commission to cancel its license for investment trading.
Deutsche Securities Korea will confirm the decision at a regular general meeting of shareholders on July 24. As a result, the firm will only operate fixed income, currency and commodity (FICC) businesses. It said, “This follows a decision by Deutsche Bank Group to shut down its global stock business.”
Earlier this month, Deutsche Bank’s headquarters in Germany announced that it would end its global stock business as part of its restructuring plans to improve profitability. It is planning to cut 18,000 jobs globally by 2022 as well as spend 7.40 billion euros (US$8.30 billion or 9.78 trillion won) to implement its restructuring plans. With the global headquarters-level restructuring, the bank group’s subsidiaries in Asia, including South Korea, are expected to withdraw its stock business one after another.
Deutsche Securities Korea once ranked among the top foreign securities companies operating in Korea in terms of assets, but the firm received severe disciplinary measures such as a suspension of business operation from the financial regulator on Nov. 11, 2010 due to the “options shock” incident. The company’s performance has since been deteriorating, forcing it to downsize its business through restructuring.