As banks' interest income models hit a ceiling, the role of securities firms within financial holding companies is gaining emphasis, but the securities competitiveness of each holding company shows clear differences. KB Securities, which has pushed aggressive capital expansion alongside balanced growth across businesses, is consolidating its lead, while Shinhan Investment & Securities and Hana Securities are failing to narrow the gap with the front-runner.
In particular, with Woori Financial Group relaunching Woori Investment & Securities, all four major financial holding companies—KB, Shinhan, Hana and Woori—now have full securities lineups, making the differences among securities firms under the holding companies even more pronounced.
As the limits of the existing interest income-centered model have become clear, analysts say securities competitiveness centered on wealth management (WM) and investment banking (IB) is emerging as the key variable that will determine the future "leading financial firm."
Among the four financial holding companies, KB Financial Group has most aggressively expanded its nonbanking portfolio centered on securities. KB Securities, which scaled up early by acquiring Hyundai Securities, is maintaining balanced growth in IB and WM on the back of capital support from the holding company.
Notably, KB Financial Group decided on a paid-in capital increase of 700 billion won for KB Securities for the first time in 10 years. Once the capital increase is completed and equity nears 8 trillion won, KB Securities will rise to become the fourth-largest mega-securities firm after Korea Investment & Securities Co., Mirae Asset Securities and NH Investment & Securities.
Yang Jong-hee, chairman of KB Financial Group, emphasized the importance of noninterest revenue at a KB Securities workshop, saying, "As the MoneyMove into the capital markets has been gaining momentum recently, the role of securities firms is becoming more important."
By contrast, the securities units of Shinhan Financial Group and Hana Financial Group have little presence within their groups. Although profits grew on a recent surge in trading value, they have struggled to close the growth gap with KB Securities.
Last year, KB Securities' net profit neared 700 billion won, while Shinhan Investment & Securities and Hana Securities posted 380 billion won and 200 billion won, respectively.
All three have the solid backing of large bank affiliates, so differences are not large in the WM segment, but the gap is clear in IB. Observers note that in financial groups still centered on conservative banks, securities units remain focused on stability rather than fulfilling their core role in the capital markets.
Shinhan Investment & Securities is constrained in aggressive business expansion as a series of financial accidents has highlighted internal control issues. Jin Ok-dong, chairman of Shinhan Financial Group, after his term was extended last year, noted, "In 2026, we see the capital market as an important pillar at the group level," while also stressing that "internal control and trust are the core of sustainable finance."
Hana Securities has a much smaller footprint within the group. It has not secured a clear competitive edge in either IB or WM—both considered cash cows for securities—leading to assessments that it has failed to demonstrate competitiveness in a market expansion phase. Although Korea's capital market has seen an unusual boom since last year, Hana Securities' scale remains stuck.
The size gap among securities firms is also affecting the net profits of the financial holding companies as a whole. Last year, KB Financial Group's net profit was 5.843 trillion won, ranking first among the four major financial holding companies, followed by Shinhan Financial Group and Hana Financial Group at 4.97 trillion won and 4 trillion won, respectively.
Considering that the net profits of the banking affiliates—KB Kookmin Bank, Shinhan Bank and Hana Bank—were similar at around 3.7 trillion to 3.8 trillion won each, the competitiveness gap in nonbanks such as securities widened the groupwide performance disparity.
In groupwide net profit, the share of nonbanks including securities is 33.9% at KB Financial, 24.1% at Shinhan Financial, and only 6.4% at Hana Financial.
The latecomer Woori Investment & Securities is instead mounting a rapid chase. Launched in Jul. 2024 through the merger of Woori Financial and Korea Post Securities, Woori Investment & Securities has been in existence for less than two years but is quickly building out its IB and WM lineups.
Woori Investment & Securities has equity of 1.2 trillion won and posted net profit of 27 billion won last year, still a level difficult to compare with other securities firms. However, Woori Financial Group has unveiled a phased paid-in capital increase plan totaling 1 trillion won to scale up securities, and by relocating the bank's acquisition finance unit to Yeouido, it is bolstering Woori Investment & Securities' competitiveness.