[Click eStock] NH Investment & Securities, Bond Management Was Difficult but...

[Asia Economy Reporter Junho Hwang] Korea Investment & Securities has maintained its investment opinion on NH Investment & Securities as 'neutral.' This investment opinion is based on the assessment that the net profit for the second quarter of this year largely met market expectations by offsetting poor bond management with strong gains from IB-related valuation profits.

NH Investment & Securities' controlling net profit for the second quarter of this year was evaluated at 119.7 billion KRW, exceeding expectations. This is believed to be the result of IB-related valuation gains and non-operating income (such as equity method gains) surpassing forecasts.

Brokerage commissions amounted to 99.3 billion KRW, down 11% from the previous quarter. This decline is analyzed to be due to an 8% decrease in market trading volume during the same period and a reduction in overseas stock revenue to 17.3 billion KRW, down 18%.

IB fee income increased by 27% from the previous quarter to 110 billion KRW. Despite reduced gains from IPOs and bond underwriting, strong performance in acquisition financing, rights offerings, and financial advisory sectors contributed to this result.

Operating gains and interest income totaled 65.7 billion KRW, a 17% decrease from the previous quarter. IB-related valuation gains, centered on alternative investments, recorded 92.1 billion KRW, increasing by 27 billion KRW during the same period.

However, excluding IB-related valuation gains, the operating division posted a loss of 56.5 billion KRW, shrinking by 45.5 billion KRW compared to the previous quarter. This is believed to be due to continued poor performance in the bond management division.

WM-related interest income expanded by 7% from the previous quarter to 69.2 billion KRW. This is analyzed to be due to improved profitability related to customer deposits.

Baek Doosan, a researcher at Korea Investment & Securities, stated, "The combined IB-related income reaching a record high of 237.5 billion KRW, driven by capital expansion and competitiveness enhancement through rights offerings, is a positive aspect," but also noted, "It is regrettable that the general operating division's performance remained weak following the previous quarter amid volatile capital market conditions."

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