Mirae Asset rebuilds US business portfolio

Mirae Asset Securities' headquarters in Seoul / Yonhap

By Lee Min-hyung

Mirae Asset Securities is overhauling its business portfolio in the United States by merging two subsidiaries there, in a move to strengthen the competitiveness of its cash cow brokerage business.

In recent public disclosures, Mirae Asset Securities Holdings, the Korean securities firm's U.S. subsidiary, decided to absorb its wholly owned subsidiary there, Mirae Asset Wealth Management.

The decision is part of Mirae Asset's efforts to maximize organizational efficiency by downscaling less-lucrative offices and enhancing investments into its cash cow businesses.

“We have merged Mirae Asset Securities Holdings with Mirae Asset Wealth Management amid the growing need for efficient management of our overseas subsidiaries,” an official from Mirae Asset Securities said.

The disclosures also contained a notice that Mirae Asset Securities Holdings will push for a capital increase by issuing new stocks worth 279.1 billion won ($222.74 million), and invest the capital in strengthening the competitiveness of its core businesses such as brokerage and trading.

“Our U.S. subsidiary will reduce capital in its Los Angeles operation and increase capital in New York under the capital expansion strategy, in a move to expand our private brokerage services in the U.S.,” the official said.

Under the plan, Mirae Asset Securities' head office in Korea will not make any capital investment for the U.S. subsidiaries, according to the company.

Mirae Asset Securities has for years adopted such a strategy in its overseas businesses, which have continued to see robust sales performance. According to the company, Mirae Asset's overseas operations generated a combined net profit of 243.2 billion won in 2021, up 21 percent from the previous year, a new annual high.

Of particular note is that Mirae Asset's overseas earnings have jumped drastically even during the COVID-19 pandemic. In 2020, the company's combined net profit from overseas soared by 17.54 percent from the previous year.

The solid overseas earnings growth was driven by Chairman Choi Hyun-man's global strategy under which each overseas operation of the company pushes ahead with thorough localization and focuses on core businesses, rather than simply diversifying its revenue streams.

Choi's longer-term vision is to make Mirae Asset Securities a mega-sized global investment bank beyond the Korean market. Toward that end, he has urged employees to maximize productivity by cutting unnecessary costs in less lucrative businesses and realign businesses from time to time to enhance core competitiveness.

According to data from the Financial Supervisory Service, Mirae Asset Securities' overseas net profit last year accounted for more than 60 percent of all the overseas net profit reaped by Korea's 13 securities firms.