As of 2013, as many as 11 securities firms were in the state of capital impairment. (image: Tom Page/flickr)
Seoul, Korea, April 14, 2014 (Korea Bizwire) – As NH Nonghyup Securities finalized its acquisition of Woori Investment & Securities and is set to be reborn as a behemoth, the securities industry is accelerating its pace of consolidation.
Before Woori Investment, Tongyang Securities had been sold and now Hyundai Securities is looking for a new owner. Some other securities houses are going out of business without finding a merger partner after years of losses.
According to financial investment industry sources on April 11, the present number of securities firms reaching as high as 60 might be reduced to ten by the year’s end if the current pace of consolidation goes on unabated.
As for Tongyang Securities that has been sold to Yuanta Securities of Taiwan, it is waiting for approval from the financial regulators. Hyundai Group has earlier put Hyundai Securities on the sales block and now Korea Development Bank has been assigned to the task of selling the firm as an underwriter.
Recently the Financial Services Commission approved the application of Apple Investment & Securities for liquidation. Hanmag Investment & Securities, which has been in financial difficulties since it placed a mistaken order with KOSPI 200 options, is also unlikely to revive. Unless the Financial Services Commission accepts Hanmag’s plans to improve its financial standing, there will be no way for the mid-sized securities firm to get back on its feet.
As of the end of 2013, as many as 11 securities firms were in the state of capital impairment. IM Investment & Securities and E-Trade Securities are also likely to be sold anytime soon. Financial regulators are in a position to encourage consolidation within the industry.
Earlier on April 9, a commission official reported in the National Assembly’s State Affairs Committee, “We will urge marginal securities firms to voluntarily liquidate themselves while we expedite the approval process for such applications.”
Written by Sean Chung (schung10@koreabizwire.com)
Policies & Law (Follow us @Policynews_Korea)
