Securities Stocks, Record-Breaking Performance Last Year

[Asia Economy Reporters Song Hwajeong and Park Jihwan] Securities firms recorded their highest-ever earnings last year. Strong performance in corporate finance (IB) and trading divisions drove the record results.

According to the Financial Supervisory Service's electronic disclosure system on the 31st, Mirae Asset Daewoo announced yesterday that its consolidated operating profit last year was 727.2 billion KRW, a 41.95% increase from the previous year. Revenue rose 16.0% to 15.4561 trillion KRW, and net profit increased 43.66% to 663.7 billion KRW. A Mirae Asset Daewoo official stated, "We achieved record-high earnings due to growth in overseas business and increased IB income," adding, "We will continue efforts to leap to a global top-tier firm, including reaching 10 trillion KRW in equity capital this year."

NH Investment & Securities, which also announced its results yesterday, posted record-high earnings. NH Investment & Securities recorded a pre-tax profit of 633.2 billion KRW and net profit of 476.4 billion KRW last year. These figures represent increases of 25.4% and 31.8% respectively compared to the previous year, marking the highest earnings in history. The IB division led the performance with record-high profits. Last year, NH Investment & Securities conducted a total of 16 initial public offering (IPO) deals including Hanwha Systems and Zinus, and underwrote rights offerings for Doosan Heavy Industries and Doosan Construction. Despite volatility in domestic and international stock and bond markets, the trading division contributed to the record earnings with a 55.2% growth in operation-related income compared to the previous year.

Samsung Securities announced yesterday that it recorded a pre-tax profit of 522.6 billion KRW and net profit of 391.8 billion KRW last year. These figures increased by 13.3% and 17.3% respectively compared to the same period last year, joining the ranks of record-high earnings. A Samsung Securities official explained, "Profits increased due to strong performance in equity capital management and the IB division, resulting in record-high earnings."

Meritz Securities continues to break its own record for highest earnings every year. Meritz Securities posted a net profit of 554.6 billion KRW last year, a 27.9% increase from the previous year. After achieving its highest net profit of 433.8 billion KRW in 2018 since its founding, it recorded another record-high earnings within a year. New revenue sources were discovered through alternative investments such as domestic and overseas real estate and ship financing, as well as overseas mergers and acquisitions (M&A) acquisition financing. Balanced growth across IB, trading, wholesale, and retail divisions was effective.

Researcher Park Hyejin of Daishin Securities analyzed, "Despite unfavorable conditions in the fourth quarter last year, bond-related income and equity-linked securities (ELS) related income led to strong earnings, and even though the fourth quarter is typically an off-season, IB-related income increased compared to the third quarter, showing good performance."

Although securities firms recorded record-high earnings last year, the outlook for this year is expected to be challenging. Researcher Park said, "As downward pressure on interest rates increases, bond-related income, which accounted for most of securities firms' profits last year, is expected to decrease starting this year. Generally, ELS income, which is affected by issuance volume from six months prior, is likely to be weak in the first half of this year due to low issuance volumes in the third and fourth quarters of last year. Additionally, the possibility of strengthened regulations related to IB cannot be ruled out."

This content was produced with the assistance of AI translation services.