[Exclusive] First 'Management Strategy Meeting' Since CEO Kim Seonghwan's Appointment... "Securing the No.1 Position"

Since his inauguration, Kim Seong-hwan, President of Korea Investment & Securities, is holding his first management strategy meeting to reorganize the company’s approach to solidify its position as the leading domestic securities firm. After assuming the presidency on the 2nd, he plans to establish management strategies to overcome this year’s complex economic crisis together with the newly formed executive team. They will share a new vision to improve sluggish performance amid the project financing (PF) crisis and prolonged high interest rates, and discuss implementation plans to widen the gap with other securities firms.

Kim Sung-hwan, President of Korea Investment & Securities. (Provided by Korea Investment & Securities)

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According to industry sources on the 25th, Korea Investment & Securities will hold a management strategy meeting over two days and one night from the 27th to the 28th. This is the first management strategy meeting presided over by Kim Seong-hwan as president, not just as an executive. Kim, who took office this year, is regarded as a 'prepared CEO' with expertise and experience across all financial investment sectors, overseeing project financing (PF), bond management, corporate finance (IB), management planning, and retail. Korea Investment & Securities holds an annual management strategy meeting in January attended by executives and employees. Approximately 200 executives and employees are expected to participate in this meeting. They will share current issues reported during last week’s business report and discuss this year’s business plans.

As emphasized by President Kim in his New Year’s address, the meeting is expected to involve in-depth discussions on executing detailed strategies to become the top securities company not only in Korea but across Asia. Digitalization and risk management are anticipated to be key topics. Since the Legoland incident at the end of 2022, risk management related to PF and other areas has emerged as a major challenge for securities firms. On the 24th, Lee Bok-hyun, Governor of the Financial Supervisory Service, urged securities firms’ CEOs at an annual meeting to actively work on restoring trust in the securities industry by managing PF risks and strengthening internal controls.

Globalization across all business sectors is also expected to be a core topic of the management strategy meeting. Since his inauguration, President Kim has reportedly instructed the management team not to be complacent with the title of a major domestic securities firm but to create a super-gap with other securities firms through globalization of all businesses. Over the past three years, Korea Investment & Securities, Meritz Securities, and Mirae Asset Securities have been competing fiercely for the top spot in operating profit, and the super-gap strategy is interpreted as a move to solidify the number one market position.

Earlier, in his New Year’s address released on the 2nd, President Kim promised, “The company cannot grow without the help of employees, and the company’s growth will lead to the growth of its executives and employees,” setting the vision of becoming the 'No. 1 financial investment company in Asia' beyond Korea and presenting a top strategy to achieve this. One of the top strategies he emphasized is the globalization of all business sectors. Amid increased uncertainty in financial markets, the company aims to attract investor demand by leveraging its diversified business portfolio.

The challenging management environment is also a reason for actively pursuing globalization. Due to the global economic recession and the high interest rate trend, weakened investment sentiment raises concerns about a vicious cycle of reduced income in PF and brokerage sectors leading to deteriorating performance.

Despite facing adverse factors such as real estate PF provisions and overseas real estate valuation losses last year, Korea Investment & Securities posted strong results. Its cumulative operating profit for the third quarter of last year (consolidated basis) was 647.3 billion KRW, exceeding the full-year operating profit of 400.1 billion KRW in 2022, and net profit for the same period was 623.2 billion KRW, already surpassing the previous year’s net profit of 535.7 billion KRW.

Korea Investment & Securities also established a Global Business Group through an organizational restructuring at the end of last year. The company aims to offset domestic business sluggishness by driving overseas operations.

There have been tangible results from actively targeting overseas markets. In January, Korea Investment & Securities was the only domestic securities firm to participate as a lead manager in the issuance of a 2 billion USD global bond by the Export-Import Bank of Korea. On the 16th, it also led the issuance of a 225 million USD (approximately 292.5 billion KRW) global bond for Mongolia’s Mortgage Corporation (MIK). This deal marked the first time a domestic securities firm has led the issuance of a global bond for a Mongolian issuer.

Additionally, whereas past management strategy meetings focused solely on 'management,' this year a talk concert session has been added to strengthen internal communication. Since the 22nd, Korea Investment & Securities has been collecting questions from employees about the company as a whole. On the day of the management strategy meeting, President Kim is expected to answer the collected questions and release the video internally. This is interpreted as a commitment to listen to diverse voices within the company and incorporate them into management.

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