Meritz Securities Reports Q2 Net Profit of 155.7 Billion KRW... 10 Consecutive Quarters with Over 100 Billion KRW Net Profit

[Asia Economy Reporter Ji-hwan Park] Meritz Securities announced on the 10th that its consolidated net profit for the second quarter of this year reached 155.7 billion KRW, a 6.7% increase compared to the same period last year. Compared to the previous quarter, it increased by 52.2%.

Meritz Securities has achieved net profits in the 100 billion KRW range for 10 consecutive quarters from the first quarter of 2018 through the second quarter of this year.

Operating profit and pre-tax profit for the second quarter of this year recorded 221.8 billion KRW and 213.8 billion KRW, respectively, marking increases of 32.9% and 4.4% compared to the same period last year. In the second quarter, the trading division achieved excellent operating income through strategic position responses and arbitrage, and Meritz Securities explained that all business sectors including Corporate Finance (IB), Wholesale, and Retail achieved balanced performance.

The net profit for the first half of the year was 258.1 billion KRW, a 10.1% decrease from last year, but operating profit was 366.5 billion KRW, a 10.1% increase compared to the same period last year. This is evaluated as a meaningful achievement despite the spread of COVID-19 and the unstable financial market environment.

Financial soundness has also improved significantly. The consolidated annualized return on equity (ROE) recorded 12.3%, rising by 2.1 percentage points from 10.2% in the first quarter of this year, maintaining a steady double-digit ROE.

Total capital (equity) increased by 382.9 billion KRW to 4.4022 trillion KRW compared to 4.0193 trillion KRW at the end of December last year. The expansion of equity and improvement in financial soundness were achieved thanks to a 200 billion KRW third-party allotment capital increase conducted in May this year targeting Meritz Financial Group and an increase in retained earnings.

As of the end of June, the Net Capital Ratio (NCR) for business operations was 1389%, an increase of 485 percentage points compared to the end of the previous quarter. The Net Capital Ratio (formerly NCR), a measure used by credit rating agencies to assess capital adequacy, also increased by 37 percentage points to 188% as of the end of June compared to the previous quarter. The leverage ratio improved by 26 percentage points to 731% from 757% at the end of the last quarter.

The scale of debt guarantees was reduced by 2.3 trillion KRW in just six months, from 8.5 trillion KRW at the end of December 2019 to 6.2 trillion KRW at the end of June this year. Meritz emphasized that as a result of active risk management and efforts to improve financial soundness in the first half of the year, they achieved both profitability and stability simultaneously.

A Meritz Securities official stated, "In the second half of the year, based on industry-leading risk management capabilities, we will fulfill the fundamental role of an investment bank by providing productive finance to industrial infrastructure," adding, "We will respond quickly and flexibly to changing market demands by demonstrating operational competitiveness based on thorough liquidity management and strengthened financial soundness."

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