By Na Jeong-ju
Staff Reporter
The Korean financial industry needs to focus on developing value-added niche markets rather than copying the strategies of foreign investment banks to develop competitiveness in the market, a Goldman Sachs executive said Thursday.
During a lecture on the Evolution of Goldman Sachs at Seoul IB Forum, Goldman Sachs Asia Vice Chairman Carlos Cordeiro said South Korea may experience a financial ``big bang'' if the Capital Market Consolidation Act is implemented. The act will provide an opportunity for the country to remove barriers between investment banks and brokerage firms, he said.
He also advised Korean firms to pursue globalization, saying they will be able to find more investment opportunities in the global markets.
``There are many factors that define a market leader,'' Cordeiro said. ``Those are reputation, teamwork, client focus, people, innovation and focused strategy and execution. Korean firms need to develop such values to become competitive global players. ''
Goldman Sachs' business strategy is based on responding to the changing needs of clients in line with the evolution of the capital market. Driven by development of several large-scale business opportunities, the bank has earned an average return in excess of 20 percent over the last 20 years, he said.
Established in 1869, the bank now has around 28,000 employees around the world and has offices in 49 cities in 23 countries.
In 2006, its net revenue reached $38 billion, of which 38 percent came from a fixed income, currency and commodities businesses; 23 percent from equities; and 15 percent from investment banking, Cordeiro said.
In 1986, only 5 percent of Goldman Sachs' net revenue came from its international business, while the rest came from their business in the Americas. However, the portion of the Americas fell to 54 percent, while its operations in Asia and Europe produced 46 percent of its revenue in 2006, he said.
The Seoul IB Forum, launched in July, aims to provide advice for financial firms to nurture investment banking experts and make proposals to the government to upgrade legal and administrative frameworks to develop the country's investment banking business.
Participants include presidents of banks and securities firms, finance officials, researchers and executives of foreign financial firms.
jj@koreatimes.co.kr