이 기사는 2020년 01월 28일 08시00분 thebell에 표출된 기사입니다

South Korea’s Hana Financial Investment is readying to become a mega-sized investment bank (IB), with its IB business growing exponentially.

Hana Financial Investment’s IB department has grown dramatically over the past three years. Its net operating profit has tripled to 167.7 billion won in 2018 from 94.2 billion won in 2017 and 52.9 billion in 2016. Its net operating profit in the first three quarters of 2019 came to 214 billion won, exceeding the previous year’s record. The company’s net profit has increased by 10 times in three years, from 19.8 billion won in 2016 to 162 billion won during the first three quarters of 2019.

Accordingly, the IB department has become the firm’s main source of profit. The IB department accounted for 11 percent of the firm’s net operating profit in 2016, but the number soared to 40 percent as of the end of third quarter of last year. Hana Financial Investment’s overall earnings also have improved thanks to the IB business. Hana Financial Investment’s net operating profit increased more than 100 billion won from 2016 (462.9 billion) to 2018 (587.5 billion). The net operating profit of the first three quarters of 2019 was 579.8 billion, nearing previous year’s record.

Securities firms’ IB department is responsible for corporate bond deals in debt capital markets, initial public offering (IPO) deals in equity capital markets, rights offering, mezzanine deals, real estate financing, alternative investments, and M&A acquisition financing deals.

Hana Financial Investment’s IB department has stood out in real estate financing and alternative investment markets. The department has generated profits via liquefied natural gas (LNG) carriers, European port portfolio, European public-private partnership (PPP) project, and equity investment in foreign infrastructures.

Hana Financial Investment is readying to conduct a rights offering worth 500 billion won, which would increase the company’s equity capital to over four trillion won, the minimum capital standard required to run short-term loan and debt financing business.

“Everybody wants to run short-term loan business, but not anyone can do that unless they have enough experiences. First of all, [IBs] have to raise money smoothly by coming up with attractive products and have to build corporate financing portfolios composed of healthy companies,” said an IB industry source.

(By reporter Lee Kyung-ju)