Korean brokerages deliver record net profit in H1 despite poor stock market

2019.09.10 14:05:38 | 2019.09.10 14:07:15

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South Korean brokerage houses posted a record net profit in the first half despite a sluggish stock market, though the pace of gains slowed in the second quarter from the previous three months.

The net profit of 56 local brokerages totaled 2.85 trillion won ($2.39 billion) in the first six months, up 5.7 percent from the same period last year to break the previous record high, according to the Financial Supervisory Service on Tuesday.

Net profit in the first quarter surged to an all-time quarterly high of 1.46 trillion won. Second-quarter results slipped 5.6 percent from the previous quarter to 1.38 trillion won but were still 11.0 percent higher from a year earlier.

Commission profits in the second quarter were up 10.5 percent on quarter at 2.48 trillion won. Specifically, consignment fees remained nearly unchanged at 894.7 billion won while IB commissions jumped 17.1 percent to 894.2 billion won.

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Asset management fees climbed 16.3 percent on quarter to 298 billion won, with other commission fees also rising 17.8 percent to 390.6 billion won. Self-trading gains surged 47.8 percent to 1.08 trillion won as bond-related profits increased 14.2 percent to 2.35 trillion won and derivative-related losses narrowed 21.5 percent to 1.25 trillion won.

But a decline in stock indexes led to a 25.6 billion won loss, compared with a first-quarter profit of 260.8 billion won from self trading stocks. Profits from other assets plunged 43.7 percent to 832.6 billion won.

Total assets of brokerages in late June reached 490.6 trillion won, up 3.9 percent from late March. Total debt rose 4.1 percent to 432.2 trillion won. Equity capital was up 2.6 percent at 58.4 trillion won. The average net capital ratio, a key measure to assess financial soundness, was 552.9 percent, up 25.0 percentage points from the previous three months. The average leverage ratio was 717.6 percent, 11.5 percentage points higher than the previous quarter.​

By Jin Young-tae and Kim Hyo-jin

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