Chairman Yoon Jong-kyoo of KB Financial Group.

"We will strengthen the wealth management and corporate investment banking sectors and create synergy among the affiliates of KB Financial Group,” Chairman Yoon Jong-kyoo said in regards to his plan after taking over Hyundai Securities. “We will be an integrated securities firm.” 

The KB Financial Group chairman made the statement at a meeting of top officials of KB Investment and Securities, Hyundai Securities and KB Financial Group, where they got to know each other for the first time since the takeover of Hyundai Securities by KB Financial. 

The chairman stressed the “spirit of the first” for the group becoming the best wealth management firm in Korea.

In the meeting, they also decided to share the group’s operational strategy, with Hyundai Securities taking charge of the wealth management and corporate investment banking sectors of the group. Branches of major affiliates will be expanded, including bank and securities affiliates, around the country to the extent that they can handle wealth management and corporate investment banking. 

The group’s 16 multi-outlets, securities and insurance affiliates will be joined by 96 branches of Hyundai Securities in operation, especially the outlets of securities affiliates around the country as counted on by the group.

They expect Hyundai Securities to have strong advantages in the equity capital market and real estate project financing, while the advantages that KB Investment Finance has, including in the bond capital market, can create synergy between them.

In this regard, the group plans to supplement the outlets that are located the industrial complexes around the country to improve their services to SMEs, especially in the area of corporate investment banking.

In addition, Hyundai Securities is considered to have leeway in the brokerage business in connection with banks, as before the takeover the securities firm’s brokerage sales exchange with KB Kookmin Bank and KB Asset Management was minimal. That means there is a lot of room for expansion.

KB Financial obtained a license from the Financial Services Commission to acquire Hyundai Securities on May 31 and is now working to make the securities firm a member of the group through a task force by June 1.

Officials of the group said the initial meeting of key officials took place in an amicable atmosphere. They tried to learn and understand each other as they are about to work on the merger of the two securities firms.

“KB Financial’s acquisitions in the past two years will lead to an adjustment of the group’s profitability and diversification of its revenue sources,” wrote Kim Soo-hyun, an analyst at Shinhan Financial Investment, in a research note.

To maximize the benefits, the group should raise its stake in the new subsidiaries, she added.

KB Financial plans to continue buying Hyundai Securities shares to raise its stake beyond 30 percent, the group said. By law, a financial holding company must hold more than a 30 percent stake in its listed subsidiary. KB will take over 16.7 million treasury stocks from Hyundai Securities for 107 billion won, it said in a regulatory filing Tuesday. The transfer, due to take place on Aug. 29, would lift KB’s stake to 29.62 percent

KB Financial’s mainstay has been commercial banking, with KB Kookmin Bank contributing to 64 percent of its total profits in 2015. With lending margins hitting rock bottom, the group has been trying to bolster its nonbanking businesses through mergers and acquisitions. 

A view of the building in Yeouido, Seoul, where the financial group and its affiliates have offices.(Photos:KB Financial)