Deutsche Securities Korea has decided to shut down its equities sales and trading business in Seoul as part of its global downsizing of investment banking entities by 2022 to achieve cost efficiency.
The plan does not translate into Deutsche Securities Korea’s outright departure, as it seeks to retain its brokerage business. Operations of Deutsche Bank AG’s Seoul branch will also remain intact.
The German banking group’s Seoul subsidiary held a shareholders’ meeting on July 24, as part of radical restructuring that involves cutting 18,000 jobs, removing the equities business and reducing its fixed-income business.
Following the meeting, it will seek approval from the Financial Services Commission, a financial regulator, for its restructuring plan.
This came after Deutsche Securities Korea gained approval from its board of directors on July 18 for plans to scrap equities sales, trading of equities and derivatives on the bourse and equities research capacity, according to a disclosure to the Korea Financial Investment Association.
Employees dedicated to the operation have reportedly been laid off. Deutsche representatives could not be reached for comment.
The restructuring comes in part due to slow growth and low interest rate globally that has undermined the profitability of Deutsche Bank worldwide.
Deutsche Securities Korea is wholly owned by Malta-based Deutsche Holdings. It was founded in 2000 and started operations in Korea in 2001. As of end-2018, its net income nearly halved to 1.3 billion won ($1.1 million). Its operating profit for 2018 fell to one-quarter from the previous year.
By Son Ji-hyoung (firstname.lastname@example.org)