Many have tried.
The sale of Woori Investment & Securities in the biggest takeover of a South Korean broker may spark consolidation among local securities firms, furthering the government’s goal of creating a national champion.
Bloomberg reports that Woori Finance Holdings today received final bids for the $719m stake in its brokerage unit from KB Financial Group, NH Financial Group and PineStreet Group. The Financial Services Commission said last week that it would encourage further consolidation by allowing brokerages to enter into new businesses if they make acquisitions.
The changes signal South Korea’s intent to reshape the securities industry and set up an investment bank big enough to compete globally, highlighted in a 2011 pledge by the financial regulator to create 'the Goldman Sachs of Korea.' The FSC in October also began licensing some firms to offer prime brokerage services, margin financing and bridge loans to corporate clients as it seeks to make local securities firms more sophisticated.
'Size does matter for the South Korean brokerage industry,' said Jang Beom Sik, business administration professor at Soongsil University in Seoul. 'We simply have too many too small brokerages that can’t compete in the global market. The Woori Investment acquisition will be a trigger for much-needed industry consolidation'.
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