NH Investment Securities will launch a 400 billion won rights issue for its largest shareholder, NH Nonghyup Financial Group. The move is aimed at strengthening its capital base to expand its key new business, comprehensive investment accounts (IMA), as well as corporate finance and venture-capital investments.
NH Investment Securities said on Monday it has decided on a third-party allocation paid-in capital increase worth a total of 400 billion won for its largest shareholder, NH Nonghyup Financial Group.
The offering was 추진됐다 to build a stable capital environment so that the IMA business and related corporate finance and venture-capital investments can enter a full-fledged growth track. NH Nonghyup Financial Group plans to support NH Investment Securities’ leap forward and underpin higher shareholder value.
The IMA business requires greater capital capacity and financial soundness than existing businesses. That is because securities firms must invest client funds in corporate finance and venture capital while also having the ability to make stable repayments above the principal.
NH Investment Securities’ net capital ratio stood at 159.3 percent in the first quarter, a lower level than major rivals. It plans to use the capital support to quickly strengthen its IMA capabilities and secure trust from clients and the market.
Part of the funds raised will also be used to expand retail credit provision limits. It explained that demand for credit provision from investors has been rising rapidly amid a recent revival in stock trading, but limits linked to equity capital have made it difficult to respond in a timely manner.
Chief Executive Yoon Byung-woon (윤병운) said, “This rights issue is a strategic decision to secure future competitiveness.” He added, “We will use the capital secured to improve profitability so that it can lead to shareholder returns.”