KB Securities will launch a 1 trillion won rights offering to enter the integrated managed account (IMA) business and strengthen the competitiveness of its megascale investment bank (IB). The strategy is to expand equity capital to more than 8 trillion won to meet the entry requirements for the IMA business and to reinforce the foundation for future growth businesses such as corporate finance (IB) and short-term notes.
KB Securities said on the 26th that it decided on a shareholder-allotted rights offering of about 1 trillion won to raise operating funds. The new shares are 56,753,688 common shares, and the issue price is 17,620 won per share.
The core of this capital increase is entry into the IMA business. An IMA is an integrated managed account in which a securities firm bears the obligation to repay principal, a product that generates revenue by managing client deposits in corporate finance-related asset and other areas. Only comprehensive financial investment firms with equity capital of at least 8 trillion won can apply for designation.
As of the end of May this year, KB Securities' equity capital was 7.896 trillion won. When this capital increase is completed, equity capital will exceed 8 trillion won, and the company is expected to secure the capital requirements to push forward with the IMA business.
Based on the capital secured, KB Securities plans to raise the competitiveness of existing core businesses such as corporate finance (IB), bonds, and treasury, while expanding the short-term notes business to secure both venture capital supply capabilities and a stable revenue base. In addition, it will continue to strengthen client-focused businesses such as wealth management (WM), retirement pensions, and digital platforms, while also managing capital adequacy and financial soundness in preparation for increased market volatility.
Through this capital increase, KB Securities will also begin in earnest to streamline its internal readiness for promoting the IMA business. The company expects this to serve as an opportunity to expand its business portfolio from its traditional brokerage focus to a focus on corporate finance and capital markets.
Kang Jin-du, CEO of KB Securities, said, "Based on the bolstered capital, we will fulfill the role of productive finance and build a balanced business portfolio, while further solidifying our position as a megascale IB grounded in financial soundness and risk management capabilities."