Everywhere Shouting 'Record High'... Daishin Securities Alone Takes a Step Back

[Asia Economy Reporter Koh Hyung-kwang] Last year, most of the major domestic securities firms recorded their highest-ever performance. Despite sluggish stock markets due to the intensification of the US-China trade war and a global economic downturn, this is analyzed as a result of diversifying revenue sources such as investment banking (IB) and proprietary investment (PI) by each securities firm. However, Daishin Securities, which was late in business diversification, saw a sharp decline in performance.

According to the financial investment industry on the 7th, Korea Investment & Securities recorded a net profit of 709.9 billion won last year. Compared to the previous year's net profit of 499.3 billion won, it increased by 42.2%, marking the highest annual performance recorded by a domestic securities firm. Sales and operating profit increased by 27.2% and 34.3% year-on-year to 10.22 trillion won and 865.3 billion won, respectively. A Korea Investment & Securities official explained, "The increase in profits from the IB sector and asset management (Trading) sector led the growth in performance."

Mirae Asset Daewoo, which announced its performance earlier, also posted its best-ever performance with a net profit of 663.7 billion won, up 43.6% from the previous year, due to increased overseas business and IB profits last year. Sales and operating profit also increased by 16.0% and 41.9%, respectively, compared to the previous year. Performance greatly increased based on a broad overseas network, capital strength, and business strategies tailored to regional characteristics.

Meritz Securities once again set a record high performance in one year. Last year, net profit was 554.6 billion won, up 27.9% from the previous year. This marks the fourth consecutive year of record-breaking performance since 2016. The focus on discovering new revenue sources such as domestic and overseas real estate, ships, aircraft, and overseas mergers and acquisitions (M&A) acquisition financing was effective.

Samsung Securities also recorded its highest-ever consolidated net profit of 391.8 billion won last year, up 17.3% from the previous year. This was thanks to increased profits from proprietary capital management and the IB sector. NH Investment & Securities also achieved a record high with a net profit of 476.4 billion won, up 31.8% from the previous year. In addition, KB Securities and Hana Financial Investment posted net profits of 290.1 billion won and 279.9 billion won last year, increasing by 52.9% and 84.5% year-on-year, respectively.

Unlike them, Daishin Securities was almost the only one among the top 10 securities firms to experience negative growth. Daishin Securities' operating profit last year was 96.8 billion won, and net profit was 102.3 billion won, down 38.9% and 27.3% respectively from the previous year. Sales slightly increased by 5.6% to 2.6997 trillion won, but profits significantly declined. The company only explained, "The retail sector's performance shrank due to a decrease in commission income from transaction volume and a decline in interest income."

While securities firms are seeking business diversification to prepare for internal and external adversities, Daishin Securities still has a high proportion of brokerage trading. In particular, last year, the domestic stock market saw a significant decrease in stock trading volume due to the US-China trade war, so the performance deterioration of securities firms with a high retail proportion was expected, but Daishin Securities was insufficiently prepared for this. An industry official said, "At this point of increasing uncertainty, it is difficult to survive with a revenue structure concentrated on brokerage commissions," adding, "Despite difficult conditions, major large securities firms are posting record-high performances because they have moved away from the past brokerage-centered business model to diversify into asset management, investment banking, and asset management sectors."

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