Chairman Yoon Jong-kyoo of KB Financial Group. (Photo:KBFG)

Chairman Yoon Jong-kyoo of KB Financial Group is ready to set up an investment banking unit to operate in New York next month to launch the group’s global IB plan.

The move is intended to explore the IB market overseas, backed up by KB’s substantial experience from infrastructure financing in Korea.

A high-ranking official of the group said on Aug. 26 that the IB unit is likely to start its operation from the middle of next month as soon as key personnel are hired. Three professionals will run the unit.

The group will hire additional personnel including those to take charge of credit evaluation when the situation requires them, the official said. The new IB unit will take charge of seeking out profitable deals for the group’s local subsidiary.

The London IB unit will be set up after only after there is time to analyze the New York unit’s performance. Perhaps that will happen by the end of this year, with the group fully aware that the IB global operation would go a long way to supplement the group’s overall operational results in the future.

Chairman Yoon plans to set up a triangular base for its global IB operation combining China and Hong Kong, which it just entered, and New York and London, which it plans to enter soon to round out its global IB operational network, the official said.

KB Securities plans to take a leap toward the massive expansion of capital to around 4 trillion won, largely aimed at boosting its investment banking operations.

The securities arm of KB Financial Group will seek to set up a beachhead overseas and boost the capital of its Hong Kong subsidiary by $80 million, bringing its capital to 120 billion won from 29 billion won at the end of last year. The company had a long and hard internal discussion on quadrupling the capital of the Hong Kong subsidiary.

The center of discussion was that the Hong Kong subsidiary should have enough capital to expand its investment banking activities with KB Securities about to seek a proper role following the merger with KB Investment Securities and Hyundai Securities, which is to expand the roles of sales and trading. Boosting the capital of its overseas subsidiaries were fundamental to the ambitious plan.

The mega investment bank, KB Securities, was officially launched on Jan. 2 with equity capital of some 4 trillion won ($3.3 billion).

KB Securities, an integrated entity of KB Investment & Securities and Hyundai Securities, held an inauguration ceremony and announced a new vision on the same day. The ceremony was attended by KB Financial Group executives and employees, including Chairman Yoon Jong-kyoo.

KB Financial Group is a major player in South Korea's financial services sector.
The holding company presides over KB Kookmin Bank, KB Kookmin Card, KB Investment & Securities and KB Life Insurance. As of the end of December 2014, the consolidated total assets of KB Financial Group ranked alongside those of South Korea's top financial holding companies.

KB Kookmin Bank was formed over time through the merger of a number of other major South Korean financial institutions, especially in 1998 and 2001. It shifted to the financial holding company system in 2008.

In terms of assets, KB Financial Group ranks alongside the holding companies of other major institutions such as Shinhan Financial Group and Hana Financial Group. The group was the latest to reorganize itself into a holding company structure.

KB Financial Group has operations in Japan, the U.S. and Britain as well as in China, India and Southeast Asian nations such as Vietnam. It is expanding its overseas network as corporate clients set up shop abroad.