Securities Industry Fires Performance Salvo, But Stingy on Donations

Despite Large Net Profits, 10 Companies' Q3
Donations Decrease by 20.541 Billion Won, Down 11.49%

[Asia Economy Reporter Park Jihwan] Despite the impact of the novel coronavirus disease (COVID-19) this year, the securities industry recorded large-scale net profits thanks to the stock market boom, but it was found to be stingy in donations.

According to the electronic disclosure by the Korea Financial Investment Association on the 3rd, the donations made by the top 10 securities firms by equity capital until the third quarter of this year amounted to 20.541 billion KRW, down 11.49% from 23.208 billion KRW during the same period last year. On the other hand, the net profit of these securities firms increased by 13.43%, from 2.8867 trillion KRW accumulated until the third quarter last year to 3.2745 trillion KRW this year.

Although their coffers have become ample, donations by securities firms have declined. The ratio of donations to net profit of securities firms decreased by 0.17 percentage points from 0.80% accumulated until the third quarter last year to 0.63% during the same period this year. Last year, they spent 80 KRW for every 10,000 KRW earned, but this year they donated 63 KRW.

The securities firm that donated the most was KB Securities. KB Securities spent 4.134 billion KRW until the third quarter this year, the highest among the surveyed companies. This nearly doubled compared to 2.135 billion KRW during the same period last year. Following were NH Investment & Securities (4.047 billion KRW), Hana Financial Investment (3.413 billion KRW), Shinhan Financial Investment (2.515 billion KRW), Korea Investment & Securities (2.286 billion KRW), Mirae Asset Daewoo (2.046 billion KRW), Samsung Securities (1.590 billion KRW), Meritz Securities (243 million KRW), Daishin Securities (199 million KRW), and Kiwoom Securities (150 million KRW).

In particular, Mirae Asset Daewoo, which ranked first in performance, was found to have significantly reduced its donation expenditure compared to last year. The company cut its donation amount by 1.367 billion KRW (40.1%) from 3.413 billion KRW last year, while its net profit increased by 163.9 billion KRW (46.7%) during the same period. Kiwoom Securities (62.6%), NH Investment & Securities (24.1%), Hana Financial Investment (37.4%), and Daishin Securities (15.82%) also reduced their donation expenditures but saw significant increases in performance.

Shinhan Financial Investment had the highest ratio of donations to net profit. It spent 1.59% of its net profit of 157.8 billion KRW until the third quarter on donations. KB Securities and Hana Financial Investment also donated at a rate of 1.38% and 1.21%, respectively, relative to their net profits. The firm that was most stingy in donations relative to its net profit was Kiwoom Securities. The company donated 150 million KRW until the third quarter this year. However, considering its accumulated net profit of 425 billion KRW, ranking second in the industry, its donation activities were deemed insufficient. Meritz Securities (0.08%), Daishin Securities (0.19%), Mirae Asset Daewoo (0.40%), and Samsung Securities (0.43%) were also found to have relatively low donation activities compared to their net profits.

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