Securities Industry Gradually Increasing Entertainment Expenses

Resumption of In-Person Sales After COVID Contraction
Approximately 10% Increase Compared to Same Period Last Year

[Asia Economy Reporter Park Ji-hwan] Major domestic securities firms have increased their entertainment expenses for business activities in the first quarter of this year by nearly 10% compared to the previous year. This rise in entertainment expenses is interpreted as a result of the expansion of face-to-face sales activities, which had been significantly curtailed due to COVID-19 last year.

According to the Korea Financial Investment Association on the 27th, the total entertainment expenses of the top 18 securities firms by equity capital with December fiscal year-end amounted to 28.589 billion KRW in the first quarter of this year, up 9.01% from 26.226 billion KRW in the same period last year.

By company, Mirae Asset Securities ranked first with 4.206 billion KRW spent from January to March this year. Following were KB Securities (2.725 billion KRW), Korea Investment & Securities (2.056 billion KRW), NH Investment & Securities (2.442 billion KRW), Kiwoom Securities (2.375 billion KRW), Hana Financial Investment (1.829 billion KRW), Hi Investment & Securities (1.711 billion KRW), Kyobo Securities (1.665 billion KRW), Meritz Securities (1.535 billion KRW), IBK Investment & Securities (1.232 billion KRW), Yuanta Securities (1.177 billion KRW), BNK Investment & Securities (1.129 billion KRW), Shinhan Financial Investment (990 million KRW), Daishin Securities (781 million KRW), Eugene Investment & Securities (734 million KRW), Hyundai Motor Securities (634 million KRW), Samsung Securities (578 million KRW), and Hanwha Investment & Securities (339 million KRW).

The company with the largest increase in entertainment expenses compared to the same period last year was Kiwoom Securities, showing an 88.6% growth. While the scale was around 1.2 billion KRW in 2019-2020, the entertainment expenses nearly doubled within a year. A Kiwoom Securities official stated, "The continuous expansion of the sales organization recently seems to have led to a corresponding increase in entertainment expenses."

Following were BNK Investment & Securities (45.9%), Eugene Investment & Securities (34.9%), Korea Investment & Securities (17.5%), Kyobo Securities (16.8%), Hana Financial Investment (16.1%), Yuanta Securities (15.9%), and Mirae Asset Securities (12.7%), all showing increases above 10%. On the other hand, KB Securities (-18.5%), Shinhan Financial Investment (-16.3%), Meritz Securities (-10.1%), and NH Investment & Securities (-1.6%) reduced their spending.

An industry insider said, "Entertainment expenses are mainly spent in investment banking (IB) and wholesale (corporate sales), but last year, due to the impact of COVID-19, face-to-face sales activities were greatly reduced, leading to a decrease in related expenses. Recently, as securities firms have begun to actively expand face-to-face sales activities, related spending is also on the rise."

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