Meritz Securities Achieves 'Net Profit of 100 Billion KRW' for 10 Consecutive Quarters

Q2 155.7 Billion KRW... 6.7% Increase
Balanced Profit and Significant Improvement in Financial Soundness

Hee-moon Choi, CEO of Meritz Securities.

[Asia Economy Reporter Park Jihwan] Meritz Securities has achieved net profits exceeding 100 billion KRW for 10 consecutive quarters.

Meritz Securities announced on the 10th that its consolidated net profit for the second quarter was 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%. As a result, the company has maintained net profits exceeding 100 billion KRW for 10 consecutive quarters from the first quarter of 2018 to the second quarter of this year.

Operating profit for the second quarter was 221.8 billion KRW, a 32.9% increase from the same period last year. Meritz explained that in the second quarter, the trading division achieved excellent operating income through strategic position responses and arbitrage, and all business sectors including corporate finance (IB), wholesale, and retail posted balanced results.

Financial soundness also improved significantly. The consolidated annualized return on equity (ROE) recorded 12.3%, rising 2.1 percentage points from 10.2% in the first quarter of this year, maintaining a 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 last year. This was largely due 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%, up 485 percentage points from the end of the previous quarter. The Net Capital Ratio (formerly NCR), an indicator used by credit rating agencies to assess capital adequacy, also rose 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 previous quarter. The scale of debt guarantees decreased from 8.5 trillion KRW at the end of last year to 6.2 trillion KRW at the end of June this year. Meritz emphasized that the results of risk management and financial soundness improvement efforts in the first half of the year 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 core role of an investment bank by providing productive finance to industrial infrastructure," adding, "We will demonstrate flexible business competitiveness based on thorough liquidity management and strengthened financial soundness."

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