IB Wingdan Hi and BNK, Holding Company-Affiliated Securities Firms Playing Key Roles as Profit Drivers

Poor Q1 Performance of Securities Firms Affiliated with 4 Major Financial Holding Companies

Hi Investment & Securities Records 82 Billion KRW in Net Operating Income from IB and PF Sectors
BNK Investment & Securities Earns 59.3 Billion KRW in Financial Advisory Fees in Q1 Alone

[Asia Economy Reporter Minji Lee] Hi Investment & Securities and BNK Investment & Securities, subsidiaries of regional financial holding companies, have demonstrated their role as profit drivers within their groups by posting relatively strong earnings. In contrast, securities firms affiliated with the four major financial holding companies reported sluggish first-quarter results, significantly reducing their contribution to net profits.

According to the financial investment industry on the 29th, Hi Investment & Securities announced operating profits of 49.3 billion KRW, a decrease of about 5% compared to the same period last year. Although the absolute figure declined, it drove growth in the non-interest income segment within DGB Financial Group. The non-interest income segment of DGB Group increased by approximately 15.5 billion KRW (18%), from 86 billion KRW to 101.5 billion KRW, with Hi Investment & Securities responsible for about 10 billion KRW of that growth. BNK Investment & Securities also contributed to BNK Financial Group’s improved performance by recording operating profits of 47.1 billion KRW and net profits of 34.5 billion KRW, up 20.9% and 9.5% respectively from the previous year.

On the other hand, the subsidiaries of the four major financial holding companies?NH Investment & Securities, KB Securities, Shinhan Financial Investment, and Hana Financial Investment?show a markedly different situation. While they significantly boosted non-bank sector earnings last year, their contributions within their groups have sharply declined this year due to a steep drop in profits. NH Investment & Securities posted net profits of 257.4 billion KRW in the first quarter last year, accounting for 42% of the holding company’s net profit (604.4 billion KRW), but this figure fell to 17% this year, the largest drop among peers. KB Securities (17% to 7%), Shinhan Financial Investment (13% to 7%), and Hana Financial Investment (16% to 12%) also saw significant decreases. Heeyeon Lim, a researcher at Shinhan Financial Investment, explained, “The poor performance of securities firms is due to unfavorable external factors such as increased volatility in the global stock market, decreased trading volume, and rising market interest rates.”

Conversely, Hi Investment & Securities and BNK Investment & Securities have further solidified their high recognition within their groups thanks to their IB (Investment Banking) divisions. Hi Investment & Securities posted net operating income of 82 billion KRW in the IB and PF (Project Financing) sectors in the first quarter, an increase of about 51% compared to a year earlier. The real estate PF sector continued its growth trend, and the traditional IB division also showed solid performance. The firm participated in the underwriting syndicate for LG Energy Solution’s initial public offering (IPO) and was also part of the public bond underwriting groups for LG Display, Hyundai Heavy Industries Holdings, and SK Siltron.

BNK Investment & Securities, having obtained an over-the-counter derivatives business license in the second half of last year, actively entered the real estate PF business and earned 59.3 billion KRW in financial advisory fees in the first quarter alone. Most of these fees came from PF guarantees, marking a roughly 120% increase compared to 26.9 billion KRW in the first quarter of last year. A BNK Investment & Securities official stated, “With the ability to conduct real estate PF business in the form of purchase commitments, the IB division’s share of total sales rose to 60%. Although profits in the bond division were not strong due to rising interest rates, losses were smaller compared to other securities firms.”

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