Q2 Asset Management Firms See 46% Net Profit Increase as Net Assets Grow with Market Recovery

[Asia Economy Reporter Eunmo Koo] As domestic and international stock markets recover from the impact of the novel coronavirus disease (COVID-19), the net profits of domestic asset management companies in the second quarter have also significantly increased.

According to the Korea Financial Investment Association on the 25th, the combined net profit of 10 domestic asset management companies (ranked by assets under management) in the second quarter of this year was 145.8 billion KRW, a 46.0% increase compared to the same period last year.

All 10 companies saw an increase in net profit, with 7 companies showing double-digit growth rates. This is an increase compared to the first quarter, when only 4 companies recorded net profit growth.

The increase in net assets due to market recovery in the second quarter appears to be the main factor behind the improved performance. An industry insider explained, "The fund market in the second quarter improved, bond yields declined, and the operating environment for asset management companies got better, leading to a significant increase in assets. The value of the investment assets also rose considerably, which is believed to have contributed to the strong second-quarter results."

In addition, the active participation of individual investors in the stock market, which had sharply declined in the first quarter due to COVID-19, helped lift stock prices, contributing to the recovery of fund returns and influencing the increase in net profits.

Looking at individual companies, Mirae Asset Global Investments recorded net profits exceeding 50 billion KRW in the second quarter, following the first quarter. It posted a net profit of 74.4 billion KRW in the second quarter, nearly a 70% increase. Combined with the first quarter (52.1 billion KRW net profit), it earned over 100 billion KRW in the first half of the year alone. A Mirae Asset Global Investments representative explained, "Not only domestically but also overseas, the performance of subsidiaries was good, and the equity method valuation gains increased significantly, which helped the results."

Samsung Asset Management posted a net profit of 18.3 billion KRW, a 33.6% increase compared to the same period last year. In the first quarter, it was at a similar level as last year (14.3 billion KRW). KB Asset Management and Korea Investment Management also recorded net profits of 13.0 billion KRW and 10.9 billion KRW, respectively, marking increases of 23.1% and 26.0% compared to the same period last year.

In terms of profit growth rate, Kiwoom Asset Management stood out. Kiwoom Asset Management’s net profit increased by 147.4%, from 2.4 billion KRW in the second quarter last year to 6.0 billion KRW this year. In the first quarter, net profit was 3.9 billion KRW, a decrease of 18%. A Kiwoom Asset Management representative stated, "The increase in institutional investors’ entrusted bond assets contributed significantly to the profit."

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