Asset Management Firms' Q2 Net Profit Soars 92% YoY to 609.4 Billion Won... Record-Breaking Streak

[Asia Economy Reporter Ji-hwan Park] Asset management companies have continued to record their highest-ever quarterly net profits again in the second quarter of this year, following the previous quarter.

According to the Financial Supervisory Service's '2021 Q2 Asset Management Companies' Operating Performance' report on the 2nd, the net profit of 335 asset management companies in the second quarter was 609.4 billion KRW, an increase of 19 billion KRW (3.2%) compared to 590.4 billion KRW in the previous quarter. Compared to the second quarter of last year, it increased by 291.4 billion KRW (91.6%).

As the profit scale increased, the return on equity (ROE) of asset management companies rose by 8.1 percentage points compared to the same period last year. However, it decreased by 0.8 percentage points compared to the previous quarter.

Among the 335 companies, 253 recorded net profits in the second quarter. The number of companies with losses was 82, and the ratio of loss-making companies increased by 2.9 percentage points compared to the previous quarter. Among professional private equity investment firms, 68 out of 260 companies (26.2%) were in the red. This is an increase of 1.3 percentage points compared to the 24.9% loss ratio last year.

Operating profit was 678.6 billion KRW, with operating income such as fee income increasing by 132.3 billion KRW, resulting in a 173.2 billion KRW (34.3%) increase compared to the previous quarter. Non-operating income (99.8 billion KRW) decreased by 124.1 billion KRW (55.4%) compared to the previous quarter (223.9 billion KRW) due to a decline in equity method gains, improving the performance of asset management companies.

As of the end of June this year, the assets under management, including fund custody and discretionary investment contracts of asset management companies, amounted to 1,268.5 trillion KRW, an increase of 30.7 trillion KRW (2.5%) compared to 1,237.8 trillion KRW at the end of March last year. This continues the record-breaking trend every quarter.

As of the end of June, public fund custody assets reached 285.9 trillion KRW, increasing by 6.4 trillion KRW over three months. Private fund custody assets also contributed to overall growth, recording 465.1 trillion KRW, an increase of 22.1 trillion KRW during the same period.

The Financial Supervisory Service stated, "Asset management companies generally maintained stability in the second quarter," and added, "We will continue monitoring asset management companies and the fund market by checking potential risk factors affecting fund soundness, such as the stock market."

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