South Korean securities firms reported strong earnings in the first quarter ended in March this year thanks to their diversified investment portfolio amid low interest rate and sound business performances.
Net income of Korea Investment & Securities Co. surged 104.5 percent from a year ago to 130.1 billion won ($116 million) in the January to March period, the highest among Korean brokerage firms. Its operating profit also jumped 142.6 percent to 169.1 billion won, and revenue rose 13.7 percent to 1.91 trillion won, the company announced in a regulatory filing on Monday.
Market analysts attribute the stellar performance to the firm’s portfolio diversification. It has expanded alternative investments like overseas real estate at a time when the stock market has become bullish amid political uncertainties and robust earnings of listed firms. Last month, its Hana NASA Real Estate Investment Fund Ⅰ worth 90 billion won was sold out within less than two hours. An official from the company said its profitability has been buoyed by diversified businesses.
The nation’s top securities firm Mirae Asset Daewoo Co. by asset came in second in terms of the first quarter net income. Its net income surged 174.2 percent on year to 110.2 billion won, boosted by the merger of Mirae Asset Daewoo Securities and Mirae Asset Securities in December last year. Operating profit reached 143.5 billion won, up 196.8 percent on year and revenue totaled 3.99 trillion won, up 93.9 percent, the company said on Monday.
According to the firm, the amount of client assets in its trust and asset management business expanded 5 trillion won from the previous quarter to 219 trillion won, and the number of clients also increased about 3,100 to 132,820 in the first quarter. “Our profit-making structure has been more stabilized with profit from consignment accounting for 26 percent, asset management 16 percent, investment banking 12 percent and trading 27 percent in the net operating profit of 297.9 billion won in the first quarter,” said an official from the company.
NH Investment & Securities Co. recorded net profit of 88.6 billion won, up 38.3 percent from the previous year. Operating profit rose 40 percent to 120 billion won and sales were up 16.5 percent to 3.62 trillion won. “Our earnings improved thanks to good performance in the investment banking businesses such as corporate bonds, new share issues and initial public offering on top of expanded profits from asset management,” said an official from the company.
Daishin Securities Co. posted 26.9 billion won in operating profit, up 55.5 percent from a year-ago period. While its revenue fell 10.6 percent to 1.28 trillion won, net profit jumped 42.3 percent to 24.4 billion won, beating the market expectation of 10.4 billion won. The better-than-expected earnings were driven by sound performance of its brokerage and savings banking businesses.
By Yoon Jin-ho and Lee Yong-gun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]