Moving to Set up Securities Company in Korea
French bank Natixis is planning to set up a securities company as its branch in South Korea. Earlier, the bank attempted to enter the market in 2018.
It sought a preliminary Financial Services Commission approval on Feb. 24 for securities and OTC derivatives investment brokerage in South Korea. The preliminary approval can be given within two months, and then it must initiate final approval procedures within six months through due diligence by authorities.
Natixis sought an approval in 2018 as well, but it did not report itself at that time. This time, it is planning to debut in South Korea, without collaboration or M&A, before the end of this year. Natixis is a part of Groupe BPCE, a leading French banking group.
These days, foreign securities companies are paying more and more attention to the South Korean market. The two latest cases are IMC Securities and China Merchants Securities. They joined the market in June 2020 and 2017, respectively. This trend is because the domestic investment banking and M&A markets are expected to grow rapidly.
Those that did so earlier are doing domestic business based on investment banking to derive profits from acquisition and arrangement, purchase and merger, etc. When it comes to IPO management, companies to be listed tend to work with foreign securities companies in order to attract more capital from foreign investors. The examples include Kakao Bank (working with CS Securities and Citigroup Global Markets), Kakao Pay (Goldman Sachs and J.P. Morgan) and Krafton (CS Securities, Citigroup Global Markets and J.P. Morgan). Foreign securities companies have managed a lot of foreign currency bond issuance, too.
Last year, 17 foreign securities companies in South Korea with a fiscal year not ending in March posted an operating profit of over 617.23 billion won, up 36.17 percent from a year ago. J.P. Morgan’s profit was 130.8 billion won, followed by those of Credit Suisse (110.9 billion won), Morgan Stanley (91.7 billion won), UBS Securities (56.3 billion won) and Goldman Sachs (53.6 billion won).