Korean asset managers’ Q1 bottom line hits record high on ample liquidity

2021.06.08 11:20:26

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South Korean asset management firms’ combined net income in the first quarter hit record high, soaring more than five times on year on ample liquidity at home and abroad from coronavirus relief packages that has kept investors’ bullish bets on a wide range of investment offerings.

According to data from the Financial Supervisory Service on Tuesday, asset managers in Korea saw their combined net profit surge 52.6 percent on quarter and a whopping 424.7 percent on year to record 615 billion won ($552.8 million) during the January to March period.

It was the highest quarterly figure, breaking the previous record of 457.5 billion won set in the third quarter last year.

Their operating profit gained 6.4 percent from three months earlier to 529.5 billion won.

Their stellar earnings came as a decrease in commission income was offset by a fall in operating expenses, data showed.

Their return on equity rose 7.8 percentage points on quarter to 25.7 percent.

The investment houses’ combined assets under management stood at a historic high of 1,247.8 trillion won as of end-March, expanding 3.3 percent, or 40 trillion from the previous quarter.

Fund assets totaled 772.5 trillion won, up 4.4 percent against a quarter ago despite the fund redemption suspensions by Lime Asset Management and Optimus Asset Management last year.

Assets for public fund investment came to 279.5 trillion won, up 9.1 percent on quarter while those for private fund investment stood at 443 trillion won, expanding 1.7 percent on quarter.

Discretionary assets came to 515.3 trillion won, climbing 1.9 percent from the year-end owing to increase in bond-type assets.

The share of loss-making asset managers fell 0.8 percentage point from last year to 21 percent. Of the total 328, 69 reported a loss. 24.5 percent, or 62 out of total 253 private equity fund managers, were in the red, up 0.6 percentage point from a quarter ago.

There were 330 asset managers at the end of March, with four new players added from the previous quarter. The number of their workers jumped to 10,291, expanding 3.3 percent from last quarter.

By Lee Soo-min

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