South Korea’s top securities firm Mirae Asset Daewoo Co. turned out an 84.3 percent surge in operating profit in the quarter ended June and best-ever six-month bottom line despite exceptionally poor stock performance thanks to its investment banking, non-equity strength and overseas businesses.
Mirae Asset Daewoo in its regulatory filing on Thursday announced its consolidated operating profit reached 261.8 billion won ($216.5 million) in the April-June period, up 84.3 percent from three months ago and 22.9 percent from a year earlier. Net profit rose 30.4 percent on quarter and 39.6 percent on year to 219.5 billion won, while revenue lost 9 percent on quarter but added 4.8 percent on year to 4.27 trillion won.
Its shares on Friday rose 4.11 percent to close at 7,340 won in Seoul trading.
For the first six months, the company raked in an operating profit of 403.9 billion won, down 5.6 percent on year. Net income hit a record half-year high of 387.6 billion won after adding 8.3 percent on year, and revenue gained 20.1 percent to total 8.96 trillion won over the same period.
The strong earnings were driven by sound IB, trading and overseas businesses that all posted largest-ever profit in the second quarter, the company said. Especially its return on equity (ROE) in the quarter reached 10.19 percent, suggesting the company has generated stable profit across its businesses.
The combined net operating profit made from the IB and trading businesses, brokerage and wealth management fees with interest income rose 19.8 percent from the first quarter to 458.7 billion won. In particular, the trading business generated 166.3 billion won, up 34.4 percent on quarter with an improvement in asset value on stable operation of debts derivatives.
The IB business also saw a rise in net operating profit that reached 108.6 billion won, up 31 percent on quarter and exceeding 100 billion won for five consecutive quarters.
The overseas operation raised 44.4 billion won in pre-tax net profit in the second quarter, and the half-year result already topped last year’s full-year profit.
By segment, margin in trading business hit 34.2 percent, IB 22.3 percent, brokerage 18.0 percent, interest P/L 14.0 percent and wealth management 11.5 percent.
Mirae Asset Daewoo attributed the stellar results to consistent equity capital investment that has helped bolster profitability in IB business, overseas operations and trading.
By Yoo Joon-ho and Lee Ha-yeon
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