New corporate banking division to develop DCM, coverage business

Restructured finance unit to focus on PF and alternative investments

The headquarters of Hyundai Motor Securities in Yeouido, Yeongdeungpo-gu, Seoul. [Hyundai Motor Securities]
The headquarters of Hyundai Motor Securities in Yeouido, Yeongdeungpo-gu, Seoul. [Hyundai Motor Securities]

Hyundai Motor Securities is expanding its investment banking operations beyond project financing and alternative investments into corporate banking. The brokerage has established a dedicated Corporate Banking Division to develop its debt capital market business, with plans to extend further into equity capital markets through initial public offerings and mergers and acquisitions.

The company announced Tuesday that it has reorganized its existing IB structure, splitting it into a Structured Finance Division and the newly created Corporate Banking Division. The former IB division has been renamed the Structured Finance Division and will concentrate on project financing and alternative investments, while corporate banking functions have been carved out into a separate unit.

The Structured Finance Division will pursue a strategy of selective focus on high-quality deals to maintain stable profitability. Kang Deok-beom, who led the previous IB division, has been appointed as its head.

The new Corporate Banking Division will be led by Executive Vice President Lee I-nam. It comprises two corporate banking units — Corporate Banking Team 1 and Corporate Banking Team 2 — along with a directly attached Corporate Banking Support Team. The DCM teams under Corporate Banking Team 1 handle bond brokerage and underwriting, while the coverage teams under Corporate Banking Team 2 are responsible for corporate client sales.

Hyundai Motor Securities plans to build out its DCM business as a starting point, then gradually broaden its corporate banking footprint. The company intends to strengthen general corporate bond sales before moving into ECM areas such as IPOs and M&A, diversifying its overall IB portfolio.

The restructuring reflects a drive to diversify revenue streams amid improving earnings. Hyundai Motor Securities posted a net profit of 59.31 billion won ($43.2 million) on a consolidated basis in the first half of this year, up 48.2 percent from the same period last year. Second-quarter net profit came in at 32.72 billion won, up 57.9 percent year on year. The company said at the time that solid retail revenue had underpinned its strong performance, and that it would focus on diversifying revenue sources in the second half.

"This reorganization is designed to respond flexibly to a rapidly changing market environment and maximize expertise in each business area," a company official said. "Building on the stable earnings of the Structured Finance Division, we will gradually expand our corporate banking operations to raise our IB competitiveness in the market to the next level over the medium to long term."


hajun825@heraldcorp.com