Mirae Asset step closer to full-fledged investment bank

Mirae Asset Securities Co. has become South Korea's first brokerage company to boost its equity capital to 10 trillion won ($9 billion), taking a step closer to its goal of making a global investment bank.

As of the end of June, its shareholder capital slightly exceeded 10 trillion won as the Mirae Asset Group unit is preparing to launch the investment management account (IMA) service as part of its efforts to become a global top-tier investment bank by 2025.

The IMA service allows the brokerage company to manage customers' deposited money with the guarantee of the principal repayment. That will expand its capital to be used for corporate financing business and create a new revenue source. South Korea has yet to unveil the detailed regulatory guidance for the IMA service.

To qualify to do the IMA business, the brokerage company needs to satisfy the two conditions: having at least 8 trillion won in equity capital and a license to issue promissory notes.

Mirae is the only brokerage company in the country to meet the two conditions. It has started issuing promissory notes from June of this year.

Since its acquisition of then Daewoo Securities Co. in 2016, it has beefed up investments in foreign startups as well. In 2018, it poured $206.8 million into Didi Chuxing, China's biggest ride-sharing platform, which went public on Nasdaq in June of this year.

Mirae had also invested $150 million in Grab, the Uber of Southeast, jointly with Naver Corp., South Korea's dominant internet portal. Grab is preparing for a Nasdaq listing which is expected to generate more than a threefold return to both Korean companies.

In the first half of this year, Mirae Asset derived 20% of its net profit from abroad. Its overseas subsidiaries earned 180 billion won in net profit in the six months to June 30, close to their full-year earnings of 201 billion won posted in 2020. 

For the April-June quarter, it racked up its largest-ever quarterly operating profit and net profit of 434.3 billion won and 479.6 billion won.

Meanwhile, its balance of overseas alternative investments, of which real estate such as hotels take a big chunk, reached almost 4 trillion won as of the end of 2020, according to Korea Investors Service, part of Moody's Investors Service.

Write to Tae-hun Lee at beje@hankyung.com
Yeonhee Kim edited this article.