Cape Securities Abolishes Corporate Sales and Research Center, Expands IB... De Facto Restructuring

"Remaining Employees to Be Assigned Similar Tasks"
"Reorganization into Investment-Focused Securities Firm"
Clear Task Division Effectively Means Restructuring

[Asia Economy Reporter Hwang Yoon-joo] Cape Investment & Securities is abolishing its corporate sales and research divisions and reorganizing its structure into an investment-specialized company. This is interpreted as a decision to effectively undergo restructuring.

Cape Investment & Securities announced on the 2nd that it will abolish the Corporate Headquarters and Research Headquarters. A representative from Cape Investment & Securities stated, "We will close the organizations, and employees who wish to remain will be reassigned to similar tasks."

The representative explained, "We have been reviewing the closure of these organizations over several years to improve organizational and personnel efficiency," adding, "We plan to focus on investment banking (IB) and proprietary investment (PI) businesses going forward."

The securities industry views this restructuring of the research division, which has high fixed costs, as a response to liquidity deterioration among small and medium-sized securities firms due to recent incidents such as Gangwon Province's refusal to guarantee payment related to the Legoland Asset-Backed Commercial Paper (ABCP).

An official from a major securities firm explained, "The research center is not a profit-generating department, so when market conditions and liquidity worsen, it can become a burden for securities firms," adding, "Until last year, securities firms performed well and hired many employees, but this year, they will have to consider personnel reductions due to market conditions and real estate project financing (PF) risks."

Meanwhile, Cape Investment & Securities recorded operating revenue of 352.4 billion KRW and operating profit of 51.3 billion KRW last year. However, its performance has deteriorated due to the impact of this year's base interest rate hikes. It posted an operating loss of 2.3 billion KRW in the first quarter, and the deficit expanded to 5.9 billion KRW in the second quarter.

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