Last Year in Asset Management Industry: Assets 1,198 Trillion KRW, Net Profit 1.3329 Trillion KRW, Record High

[Asia Economy Reporter Park Jihwan] As of the end of last year, the assets under management (AUM) of asset management companies nearly reached 1,200 trillion KRW, marking an all-time high. Net profit also recorded the highest annual revenue of 1.332 trillion KRW due to increased fee income.

According to the "2020 Asset Management Company Business Performance" (provisional) released by the Financial Supervisory Service on the 24th, the total AUM of 326 asset management companies as of the end of last year was 1,197.8 trillion KRW, an increase of 61.3 trillion KRW (5.4%) compared to the end of the previous year.

Fund custody balances were recorded at 691.9 trillion KRW, up 42.3 trillion KRW (6.5%) from the end of the previous year. Public funds amounted to 256.2 trillion KRW, an increase of 19 trillion KRW compared to the end of the previous year. While equity funds decreased by 10.6 trillion KRW, MMFs increased by 28.3 trillion KRW. Private funds rose by 23.3 trillion KRW to 435.7 trillion KRW.

Discretionary investment contracts totaled 505.9 trillion KRW. Mainly, bond-type discretionary investments increased by 20.7 trillion KRW, resulting in a 19 trillion KRW (3.9%) rise compared to the end of the previous year.

Net profit of asset management companies was 1.332 trillion KRW, up 511.8 billion KRW (62.4%) from 820.2 billion KRW the previous year. Operating profit (982.6 billion KRW) increased by 407.9 billion KRW (42.1%) from 968.9 billion KRW the previous year due to increased fee income from the growth in AUM. Non-operating income rose from 110.4 billion KRW to 328.5 billion KRW, influenced by increased equity method valuation gains.

The Financial Supervisory Service analyzed, "Last year, the AUM and net profit of asset management companies continuously increased due to the stock market boom. The asset management industry maintained overall stability, with a significant decrease in the ratio of loss-making companies due to improved profitability."

By company, out of 326 companies, 254 posted profits while 72 posted losses. The ratio of loss-making companies decreased by 13.2 percentage points to 22.1% from 35.3% the previous year. Return on equity (ROE) rose by 3.4 percentage points to 15.6% from 12.2% the previous year.

By sector, fee income increased by 536.8 billion KRW (20.0%) to 3.2188 trillion KRW from 2.682 trillion KRW the previous year due to growth in AUM and performance fees. Selling and administrative expenses rose by 283.5 billion KRW (16.5%) to 2.0051 trillion KRW from 1.7216 trillion KRW the previous year, attributed to new asset management company establishments and increased staff numbers.

Securities investment gains (including derivatives gains) from proprietary asset management amounted to 335.8 billion KRW, showing a continuous upward trend after the temporary slump caused by COVID-19 in the stock market, increasing by 211 billion KRW (169.0%) from 124.8 billion KRW the previous year.

A Financial Supervisory Service official stated, "We plan to review the financial and profit and loss status of newly established asset management companies and other companies with weak revenue bases to prepare for future market volatility. We will also continue to strengthen monitoring of fund custody trends and potential risk factors."

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