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| Shinhan Investment Corp.'s head office on Yeouido, Seoul / Korea Times file |
Shinhan Investment Corp., Shinhan Financial Group's brokerage unit, is expected to decide to raise 700 billion won ($601.3 million) at its upcoming board meeting to join the league of Korea's so-called mega investment banks (IBs).
Shinhan Financial Group and its brokerage arm said Tuesday that each will hold board members' meetings on May 9 and 10, respectively, to discuss how and when to raise capital by issuing new stocks.
"Shinhan Financial and Investment will hold board members' meetings soon to discuss details about pooling necessary funds," a Shinhan Financial Group official said.
Under the current rule, a securities firm must have 4 trillion won in equity capital to become a mega IB. Only a mega IB is allowed to issue a promissory note with the maximum limit of 200 percent of its equity capital.
There are currently five mega IBs in Korea, and Shinhan Investment aims to become the nation's sixth.
Considering Shinhan Investment's current capital of 3.3 trillion won, the group is expected to raise 700 billion won through new stock issuances by the end of the year.
Shinhan Investment CEO Kim Byung-cheol stressed the importance to become a leader in the capital market by strengthening its IB business during his inauguration in March.
The group official denied speculation that the company would raise 700 billion won.
"CEO Kim vowed to raise capital to strengthen the brokerage's IB business during his inauguration, but no details have been discussed at this point," he said.
"We will give a public announcement once the size and timetable have been completed."
During his inauguration, Kim said Shinhan Investment lagged behind its competitors in the IB sector and should strengthen its competitiveness to meet customers' needs.
By capital, Shinhan Investment is the nation's sixth-largest brokerage after Mirae Asset Daewoo, NH Investment & Securities, Korean Investment & Securities, KB and Samsung Securities.
The five brokerages above have already managed to receive approval from the Financial Services Commission for mega IB businesses.
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