[딜사이트 이규연 기자] Standard Chartered Securities Korea (hereinafter referred to as SC Securities) has appointed Kwon Yong-gwan, former senior director of BNP Paribas Securities, as its new CEO. Once appointed as CEO, Kwon is expected to focus on recovering the performance of SC Securities, which was a ‘small giant’ in the corporate finance field.
According to SC Securities on the 26th, Kwon is scheduled to serve his term as CEO for three years from January 13th of next year. After former CEO Cho Jin-woo, who took office in 2020, resigned in July, SC Securities’ M&A (mergers and acquisitions) executive director Yoon Ki-hee has been temporarily serving as CEO.
Nominee Kwon is from BNP Paribas, a French IB (investment banking) company. Looking at his specific career, he worked as an analyst at BNP Paribas’ Hong Kong subsidiary and then served as the senior head of securities at BNP Paribas’ Korea subsidiary, where he was in charge of DCM (debt issuance market) work.
This appears to be a personnel change that takes into account the fact that SC Securities has been focusing on corporate finance. SC Securities introduced on its website, “We are concentrating our capabilities on comprehensive corporate financial services such as underwriting and arranging various bonds in domestic and overseas bond markets, brokerage of various overseas bonds, and corporate M&A advisory.”
SC Securities ranked 35th among 61 securities companies operating in Korea based on equity capital in the third quarter of this year. However, according to the deal site league table, SC Securities has made notable moves in corporate finance, such as serving as sole financial advisor when Swedish private equity fund EQT acquired SK Shielders for about 2 trillion won last year.
This legacy in the corporate finance sector was also the basis for supporting SC Securities’ performance. For example, SC Securities earned 27.3 billion won in net commission income on a consolidated basis last year, of which merger brokerage commissions accounted for 55.4%.
The appointment of Kwon to lead SC Securities is also interpreted as one of the measures to stabilize performance by strengthening corporate finance, which is the main business. This is because SC Securities has shown ups and downs in performance over the past few years, and this year’s performance outlook is also uncertain.
Looking at SC Securities’ annual net commission income over the past five years, it is ▲12 billion won in 2019 ▲18.6 billion won in 2020 ▲20.6 billion won in 2021 ▲17.7 billion won in 2022 ▲27.3 billion won in 2023. Net profit and loss is ▲3.2 billion won in 2019 ▲8.6 billion won in 2020 ▲5.3 billion won in 2021 ▲1.1 billion won in 2022 ▲9.9 billion won in 2023.
Looking at this, we can see that SC Securities’ performance hit a low point in 2022 and provided an opportunity for a rebound in 2023. However, looking at SC Securities’ separate performance for the first to third quarters of 2024 as announced by the Korea Financial Investment Association, it is unclear whether the rebound will be able to continue this year.
Cumulative operating revenue on a separate basis in the third quarter of this year, including pure commission income, was 12.6 billion won, a 56.5% decrease compared to the same period last year. SC Securities reported a net loss of 5.4 billion won during the same period, turning into a net profit loss compared to the same period last year.
This reflects the fact that underwriting and arrangement fee income linked to corporate finance was calculated at 3.6 billion won, a decrease of 81.5% compared to the same period last year. During the same period, purchase and merger fee income also decreased by 88.7% compared to the same period last year to 1.7 billion won.
This is also evidence that SC Securities did not achieve notable results in the corporate finance sector this year, unlike last year. This is something that puts a heavy burden on the shoulders of Kwon, the new leader of SC Securities from 2025.
An official in the financial investment industry said, “Although SC Securities is small in size, its importance in the corporate finance and asset management (WM) business sector promoted by SC First Bank is not low,” and added, “SC Securities also has experience in corporate finance considering this. “Many Kwon nominees will have been decided,” he said.
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