Daewoo Securities eyeing global opportunities
By Kwon Mee-yoo
KDB Daewoo Securities aims to expand its overseas operations by strengthening the capabilities of units abroad.
For that purpose, the firm plans to reinforce the localization of its overseas business as a part of its effort to step up as a global investment bank (IB).
Currently, the brokerage's base for overseas activities is its Hong Kong unit.
"We have set up a matrix system by which the head office coordinates with overseas branches since 2009," company spokesman Chwa Gyoung-suk said.
The matrix system allows swift functioning in each business unit, such as IB operations, sales and other important areas by streamlining a chain of command so as to enable employees to complete their missions with little distraction.
The Hong Kong branch recorded some 1.5 billion won of pre-tax profit last year, despite a sluggish global economy and aims to reach 2 billion won this year.
To boost independent capabilities, KDB Daewoo increased the Hong Kong unit's capital by $100 million to $200 million in 2011.
If needed, it is ready to put another $100 million into Hong Kong this year.
Though the branch is the biggest base for overseas expansion, KDB Daewoo Securities will not stop building a larger international network.
It established an investment consulting company in Beijing as part of increasing business with China. It focuses on deal sourcing of IBs such as initial public offerings (IPO) or mergers and acquisitions and works with Qualified Domestic Institutional Investors in China, in cooperation with existing Beijing and Shanghai offices. KDB Daewoo also elevated the status of its Tokyo office to a branch, allowing it to operate its own business there.
The securities firm believes that establishing independent revenue sources before building up human and resources infrastructure, enabling it to set up a stable revenue platform based on sales and trading.
The Global Trading Center in the Hong Kong unit will be the center for KDB Daewoo's management of foreign assets.
The center will also launch the Global Private Equity team to manage and invest its own capital and boost Hong Kong stock brokerage functions. KDB Daewoo has obtained membership to the Hong Kong Stock Exchange.
The firm will continue to develop the emerging market in Southeast Asia as well. It has been pushing to establish a local subsidiary in Singapore and it will be a foothold targeting overseas Chinese throughout Asia.
Efforts are being made in Central Asia. KDB Daewoo is promoting memorandums of understanding (MOUs) with financial companies and related organizations in Kazakhstan and other countries.
Last year, it signed an MOU with IS Investment in Turkey, gaining a foothold for further advance to the Middle East and Europe.
KDB Daewoo is ready to make use of the global network of its parent company KDB Financial Group.
"We can share local networks of each subsidiary and collaborate with them based on strength," Chwa said. "When we enter a new country, we can rely on established networks. We see further synergy with Korea Development Bank, which has a strong global network."
Currently, overseas operations account for 5 percent of KDB Daewoo Securities’s profit and the company aims to raise it to 20 percent by 2020.