Shin Geumtu Breaking 'Purebloodism', Aiming to Leap into Top Ranks of Major Financial Holding Companies

[Asia Economy Reporter Park So-yeon] Former Mirae Asset Securities IB (Investment Banking) Head Kim Sang-tae will be newly appointed as the CEO of Shinhan Financial Investment GIB following the shareholders' meeting on the 22nd. Shinhan, which had been cultivating and nurturing CEOs internally within the holding company, has boldly broken away from its 'pure-blood' tradition. Following the recruitment of Lee Young-chang, formerly of Daewoo Securities, Kim Sang-tae is the second external talent to be brought in. Industry attention is focused on whether Shinhan can shed its 'lower-tier' label among major financial holding company-affiliated securities firms through this new personnel experiment.

With Kim's appointment, Shinhan Financial Investment will shift to a 'co-CEO' system to achieve balanced growth between the retail and IB divisions. The existing CEO Lee Young-chang will oversee the retail division, including WM (Wealth Management), while the newly recruited CEO Kim Sang-tae will lead the IB division.

Shinhan Financial Group has viewed enhancing competitiveness in the IB sector as essential to strengthening the group's capital market capabilities and has actively pursued the recruitment of top domestic IB experts with proven performance and capabilities.

Additionally, through acquisitions such as Asia Trust and Shinhan Venture Investment, the establishment of Shinhan REITs Management, and the integration of asset management companies, Shinhan has continuously pushed to strengthen its capital market competitiveness. It has been judged that the IB division of Shinhan Financial Investment needs to play a more central role to secure additional growth momentum.

Before recruiting CEO Lee and Kim Sang-tae, Shinhan Financial Investment mainly preferred CEOs from within the company. Former CEO Kang Dae-seok, appointed in 2012, was from Good Morning Shinhan Securities, and former CEO Kim Hyung-jin, appointed in 2017, was from Shinhan Bank. Former CEO Kim Byung-chul, appointed in 2019, was promoted after serving as head of the investment management division at Shinhan Financial Group.

Industry insiders interpret Shinhan Financial Investment's recent bold external recruitments at the C-level as a realistic judgment that, despite being a financial holding company owning the country's largest leading bank, Shinhan Bank, it faces limitations relying solely on internal personnel in the securities sector, where it ranks among the lowest compared to major financial holding companies.

Looking at the net profit of the five major financial holding company-affiliated securities firms last year: NH Investment & Securities recorded 947.9 billion KRW, KB Securities 594.3 billion KRW, Hana Financial Investment 506.6 billion KRW, and Shinhan Financial Investment 320.8 billion KRW. The gap with the top-ranked NH is about threefold, and the difference with banking rival KB is also significant.

An industry official in the financial investment sector explained, "Compared to other large firms, Shinhan Financial Investment has been stronger in derivatives manufacturing and retail, such as equity-linked securities (ELS) and derivative-linked securities (DLS), rather than IB. However, with strengthened regulations on derivatives following the derivative-linked fund (DLF) incident and the Lime Asset Management scandal, retail momentum has significantly declined, and performance has been sluggish over the past two years."

The newly recruited CEO Kim is a 'traditional securities professional' who previously served as Head of IB at Mirae Asset Securities. He has been recognized for his deal sourcing capabilities and drive in areas such as the equity capital market (ECM) and debt capital market (DCM). Notably, he contributed to establishing Mirae Asset Securities as a traditional powerhouse in the initial public offering (IPO) market and demonstrated leadership in fostering stability and harmony during the integration of Daewoo Securities and Mirae Asset.

Within Shinhan Financial Group, it is understood that the capital markets, including IB, require the role of 'Big Names' with a certain level of track record. Following the recruitment of Cho Jae-min, CEO of Shinhan Asset Management, at the end of last year, the recent appointment of CEO Kim is expected to mark Shinhan's full-scale entry into capital market competition.

The financial investment industry anticipates that former CEO Kim will actively pursue deal sourcing based on his accumulated experience and know-how in the IPO market. The immediate goal is to elevate the ECM league table ranking, which stood around 10th last year, to a top-tier position.

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