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[Herald Interview] IBK Securities eyes bigger opportunity, market trust as SME-specialized investor

CEO says growth stocks in next-generation energy, green, AI still attractive

IBK Securities CEO Suh Byung-ki (IBK Securities)
IBK Securities CEO Suh Byung-ki (IBK Securities)
IBK Securities, the brokerage arm of the state-run Industrial Bank of Korea, aims to cement its position as a leading medium-sized company by securing 1 trillion won ($886 million) of its own capital and expanding financial flow between SMEs in Korea and investors.

CEO Suh Byung-ki, entering his second year this month, said in an interview that its goal of securing 1 trillion won of capital may lead the way for the company to raise its credit rating and its reputation as a trusted company in the market.

The comment came as the company’s capital moves closer to the mark of 1 trillion won. As of the final quarter of 2020, IBK Securities held around 754 billion won. The brokerage firm saw 110 billion won of net profit before tax last year, the most since its establishment in 2008.

“We will be the first among the eight brokerages launched in 2008 to surpass the 1 trillion-won mark (of capital) and the goal is a part of efforts to become a midsized securities firm,” he said. “Based on (that goal), we hope the company’s credit rating will climb (one notch) from A+ to AA- so that we could expand the scale of our operations.”

On the prospects of stock markets, Suh said the markets will continue to operate under the influence of the pandemic and fiscal policies, highlighting the possibility of the US Fed raising rates in line with an economic recovery by the end of this year or next year.

“In the short term, (investors) may deal with (downward) risks by riding on value stocks and stocks sensitive to economic changes (such as steel, autos and chips) in the process of economic normalization. In the long-term perspective, I find growth stocks related to next-generation energy, environment-friendly and AI projects still attractive.”

IBK Securities has been named a SME-specialized investor for the third consecutive year, as the country’s top financial regulator designated six local brokerages as specializing in investing in SMEs. The brokerage house has structured systems to help smaller enterprises expand their businesses by providing initial public offering consulting services and technology-based financial investments. It has managed 47 firms to be listed on the third-tier Konex market so far, and further led some of them with high growth potential to hop to the secondary Kosdaq market, the CEO said.

“As an IPO underwriter, we also helped the firms to go public through a merger with a special purpose acquisition company worth between 6 billion won and 10 billion won. It was a strategy to minimize IPO risks of small and medium-sized capital stocks and to boost their stock prices after listing.”

Suh suggested expansion of venture capital funding from investment organizations such as private equity funds, new technology project financing firms, business development companies and special purpose acquisition companies as one of the key plans for the remainder of his two-year term.

The brokerage head also vowed to play its part in stimulating the economy by assisting with SME financing. Leading the firms to successful stock market debuts is another projected business for IBK Securities, he explained.

The 58-year-old CEO contributed to the brokerage’s record-high net profit last year amid the pandemic. He is looking to strengthen IBK Securities’ portfolio, including wealth management, investment banking and sales and trading.

Prior to taking office in 2020, Suh served as the vice president of the investment banking and wealth management divisions at Shinyoung Securities. He also worked at KEB Hana Bank, formerly known as Korea Exchange Bank, and the country’s sovereign wealth fund, Korea Investment Corp.

By Jie Ye-eun (yeeun@heraldcorp.com)  
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