Hana Financial Investment, "Completing March Capital Increase and Leaping to a 'Mega IB'"

[Asia Economy Reporter Koo Eun-mo] Hana Financial Investment is accelerating its entry into the ultra-large investment bank (IB) sector by raising capital through a 500 billion KRW rights offering.

Hana Financial Group announced on the 4th through a disclosure that its subsidiary, Hana Financial Investment, will proceed with a rights offering to raise 499.7 billion KRW in operating funds. Hana Financial Group will acquire 8.47 million shares issued through this offering, with the scheduled acquisition date set for the 26th of next month.

Hana Financial Investment plans to join the ranks of ultra-large IBs through this rights offering to strengthen its competitiveness within the industry. A representative from Hana Financial Investment explained the background of the capital increase, stating, "This offering was conducted to enter the ultra-large IB sector," adding, "It aims to enhance competitiveness within the industry, expand overseas business such as equity participation in emerging global markets, and proactively prepare for recent regulatory tightening by supervisory authorities."

Hana Financial Investment plans to complete the rights offering within next month and, once it secures over 4 trillion KRW in equity capital, will apply to financial authorities for designation as an ultra-large IB. As of the end of last year, Hana Financial Investment’s equity capital stood at 3.4751 trillion KRW, and upon completion of this offering, it will exceed 4 trillion KRW, meeting the ultra-large IB requirement of 4 trillion KRW in equity capital. A Hana Financial Investment official stated, "The payment for the capital increase is scheduled for March 26, and with the inclusion of first-quarter net profit this year, we expect equity capital to exceed 4 trillion KRW by the end of the first quarter." Currently, there are no plans for additional capital increases.

Hana Financial Investment increased its equity capital to over 3 trillion KRW through a rights offering of approximately 1.2 trillion KRW in 2018, and in July last year, it was designated as the eighth comprehensive financial investment business operator (CFIBO) among domestic securities firms. After this capital increase, once equity capital exceeds 4 trillion KRW, it will be designated as an ultra-large IB CFIBO. Since the system was introduced in 2016, it will be the seventh such designation following Mirae Asset Daewoo, NH Investment & Securities, Korea Investment & Securities, Samsung Securities, KB Securities, and Shinhan Financial Investment.

Once Hana Financial Investment is designated as an ultra-large IB, it will be able to engage in short-term finance business such as issuing commercial paper. If it obtains approval for short-term finance business from the Financial Services Commission, it can issue commercial paper with maturities of up to one year within a limit of 200% of its equity capital. A Hana Financial Investment official said, "Regarding new business applications such as short-term finance business that allows raising funds up to twice the equity capital, we plan to coordinate the timing of the application considering the securing of related organizations and personnel."

This content was produced with the assistance of AI translation services.