Daily Emergency Meetings... Securities Firms on High Alert

Emergency Management Meeting Led by CEO... Soothing Investors with Share Buybacks

[Asia Economy Reporter Minwoo Lee] As the global stock markets reel from the spread of the novel coronavirus infection (COVID-19), domestic securities firms are tightening their vigilance. CEOs are directly leading daily emergency management meetings, strengthening various monitoring systems, and actively improving customer response processes.

◆CEO Directs Emergency Management=According to the securities industry on the 24th, Mirae Asset Daewoo has activated an emergency response committee chaired by CEO Choi Hyun-man. A Mirae Asset Daewoo official explained, "We have established internal response guidelines step-by-step according to each stock market situation, and they are being operated accordingly," adding, "Currently, we are operating at a response level one step stronger than before." The official further stated, "In particular, depending on the crisis level, crisis response organizations such as the Crisis Response Council have been formed, and CEO Choi, as chairman of the emergency response committee, is closely checking overall company matters and applying them to management."

Hana Financial Investment began holding emergency management meetings chaired by CEO Lee Jin-guk earlier this month. This was to respond swiftly and attentively as unprecedented volatility appeared in the global stock markets due to COVID-19. Since the KOSPI index fell below the 1500 mark on the 19th, it has been fluctuating daily by more than 5%. A Hana Financial Investment official said, "We are continuously monitoring the expansion of financial market volatility and liquidity conditions in the capital market to minimize the impact on business plans for each division," adding, "At the same time, we are preparing countermeasures to prevent further decline in customers' asset values."

Kyobo Securities also started emergency management meetings centered on the CEO from the 19th, continuing indefinitely until the financial market stabilizes. They report and share trends in COVID-19 infection spread, major business status, and any unusual matters by division. The support, sales, and operations divisions attend meetings every Monday, Tuesday, and Wednesday, while other divisions hold irregular meetings when specific situations arise.

Hi Investment & Securities has also formed and is operating an emergency response committee chaired by the CEO since last week. A Hi Investment & Securities official said, "It was established to prepare for risks and profit and loss fluctuations due to financial market uncertainty and real economy impacts," emphasizing, "The emergency committee will serve as a rapid consultation body to immediately resolve issues in each division during emergencies, including liquidity risk, credit risk, and profit and loss status by major business."

KTB Investment & Securities is conducting a 'daily emergency inspection,' confirming major matters and establishing and implementing countermeasures every day.

◆"Soothe Customer Anxiety"... Also Buying Back Treasury Shares= Securities firms have actively engaged in treasury stock buybacks. Korea Financial Group disclosed yesterday that Chairman Kim Nam-gu purchased a total of 211,000 treasury shares worth 6.8 billion KRW on the market in three separate transactions. The company explained, "This is to dispel investor anxiety caused by the sharp drop in stock prices." The previous day, Korea Financial Group's stock price fell more than 13%, dropping to 30,000 KRW. Previously, during the 2008 Lehman Brothers crisis, Chairman Kim (then president) and five top executives of affiliates also purchased about 200,000 treasury shares on the market.

Mirae Asset Daewoo announced on the 20th that it decided to purchase and then cancel 13 million treasury shares worth approximately 47 billion KRW to enhance shareholder value. Additionally, Eugene Investment & Securities and SK Securities also decided to purchase treasury shares worth approximately 4.5 billion KRW (3 million shares) and 7.7 billion KRW (14.2 million shares), respectively, to enhance shareholder value.

Shinhan Financial Investment presented concrete reform measures to reassure investors. Especially after customers suffered consecutive losses from investment products such as Lime Fund and German Real Estate DLS, CEO Kim Byung-chul even expressed his intention to resign, signaling a more proactive response. The aim is to regain trust through reform despite the unstable stock market.

First, they decided to provide provisional payments of 18.99 billion KRW, half of the 37.99 billion KRW balance of the German Real Estate DLS, to customers. Also, the product function under the Wealth Management (WM) group was separated to establish an independent Investment Product Service (IPS) division, which was expanded into an investment product selection committee involving consumer protection and internal control organizations. To improve the sales process, the weight of customer return rate and customer satisfaction in the performance evaluation system was increased. A new 'Product Audit Department' was also established to independently perform post-sale management and audit functions of investment products. They plan to improve the entire process from selection, sales, to post-management of financial investment products.

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