Natixis to enter Korean securities market in 2019

By Lee Kyung-min

Natixis, one of France's major financial services providers, will enter the local securities market in the first half of 2019, government and industry sources said Tuesday.

“Natixis Seoul Securities Branch will begin business in the first quarter of next year, or in the second quarter at the latest, once it gets approval from the financial regulator,” an industry source close to the matter said on condition of anonymity.

According to the Financial Supervisory Service (FSS), the French entity filed for regulatory approval Sept. 18, seeking to operate in the securities brokerage and equity-linked securities (ELS) brokerage sectors.

“The company's headquarters in Paris is known for its expertise in securities and ELS brokerage. The new branch is expected to fully capitalize on its experiences in successful management,” the source added.

About two months will be required for the final green light, given that it will take some time to resolve regulatory issues with the FSS and the French headquarters of the group.

“The necessary procedures are ongoing. We cannot disclose details other than the fact that a review is under way with the Securities and Futures Commission. A deliberative body will also be convened at the Financial Services Commission to check on the matter,” an FSS official said.

According to the source, the opening of the securities branch is part of a broader strategic move by Natixis, the second-largest bank in France, to increase profitability by reducing global banking operations, as margins for these have been shrinking following the 2008 global financial crisis.

Natixis' move came after the French bank closed its banking representative office in Seoul in May.

“The securities business, whose profit is largely accrued through per-transaction commissions, is a rather substantially lucrative business as opposed to banking, whose business relies heavily on interest from loans,” the source said.

The French lender has been prioritizing investment banking over commercial banking for the past few years.

In May, Natixis appointed former Royal Bank of Scotland (RBS) Korea CEO Cho Su-young as chief of the envisioned securities branch, the source said.

Well versed in the related business with broad expertise, she worked at the RBS from May 2013 to September 2017 and served as a director at Deutsche Bank Korea from March 2003 to November 2012, according to her online profile.

While lesser-known in Korea, Natixis is an affiliate of the BPCE Group, which ranks fourth among French financial groups in 2016. The group has over 8,200 branches nationwide under their respective brand names serving nearly 40 million customers.

Natixis with 20,898 workers has a net worth of 520 billion euros, equivalent to 683 trillion won. It has 38 branches in China, Hong Kong, Indonesia, Japan, Malaysia, Singapore, Taiwan and Thailand.