Meritz Securities Reports Q3 Net Profit of 217.5 Billion Won... 'Earnings Surprise'

Equity Capital 5.84 Trillion Won... ROE 15.7% Industry's Highest Profitability
19 Consecutive Quarters with Net Profit Over 100 Billion Won
"Focused on Risk Management to Handle Volatility... Thorough Liquidity Management"

[Asia Economy Reporter Lee Seon-ae] Meritz Securities achieved an 'earnings surprise' in the third quarter by delivering strong results across all business divisions. It has consistently generated stable profits by recording over 100 billion KRW in net income for 19 consecutive quarters from Q1 2018 to Q3 2022, while also demonstrating its risk management capabilities.

Meritz Securities announced on the 31st that its consolidated net income for Q3 2022 was 217.5 billion KRW, up 13.8% year-on-year and 37.3% quarter-on-quarter. Operating profit and pre-tax profit were 247.7 billion KRW and 292.8 billion KRW, respectively, increasing 3.1% and 11.4% compared to the same period last year.

Despite worsening domestic and international economic conditions such as a sharp rise in market interest rates and a decline in stock market trading volume, the company recorded excellent performance across all business sectors, including Corporate Finance (IB) and Sales & Trading. In particular, the Corporate Finance (IB) division achieved solid results by adopting a more conservative approach to new deals for thorough risk management. The Sales & Trading division implemented optimized trading strategies in response to increased market volatility.

Cumulative net income up to the end of September reached 658.3 billion KRW, an 11.0% increase compared to the same period last year, while operating profit and pre-tax profit were 823.4 billion KRW and 887.0 billion KRW, respectively, up 7.7% and 9.1% year-on-year.

As of the end of Q3, shareholders' equity stood at 5.8402 trillion KRW, an increase of 208.4 billion KRW from the previous quarter. The consolidated annualized return on equity (ROE) was 15.7%. Along with rapid growth in equity capital, the company has maintained industry-leading profitability by recording double-digit ROE for nine consecutive years since 2014.

The net capital ratio (NCR), an indicator of financial soundness, rose 13 percentage points quarter-on-quarter to 1516% as of the end of September, and the liquidity ratio increased by 9.2 percentage points to 134.2%. The ratio of non-performing assets, an indicator of asset soundness for securities firms, significantly improved, dropping 2.13 percentage points from 3.28% in the previous quarter to 1.15%. Potential risk factors were closely monitored, and stable asset soundness indicators were maintained through thorough risk management.

A Meritz Securities official stated, “To cope with unstable market conditions and rising interest rates, we apply strict screening criteria for new investments and are fully committed to proactive liquidity management by forecasting funding demand. We will closely monitor market changes and focus on risk management capabilities to respond thoroughly to the current situation.”

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