Daol Investment Securities Reports Operating Loss Last Year... Returns to Profit in Q4

Q4 Real Estate PF Reserve of 33.8 Billion Won Set Aside
"Establishment of S&T Division and Strengthening Retail Sales"

Daol Investment & Securities announced on the 26th that its consolidated operating profit for the fourth quarter of 2023 reached 6.1 billion KRW, marking a successful turnaround to profitability on a quarterly basis. Although the company posted a loss on an annual basis, it is significant that it broke free from four consecutive quarters of losses and achieved a quarterly performance turnaround.

Daol Investment & Securities disclosed on the 26th that it recorded an operating loss of 60.7 billion KRW on a consolidated basis for 2023, turning to a loss compared to the previous year. During the same period, sales decreased by 18.22% to 1.5064 trillion KRW, and net loss amounted to 8.3 billion KRW, also turning to a loss. The company explained, "Revenue declined due to worsening external conditions."

However, in the fourth quarter, the company recorded an operating profit of 6.1 billion KRW on a consolidated basis, turning to profitability compared to the previous year. Sales for the same period were 382.7 billion KRW, and net profit was 4.1 billion KRW. The company escaped from four consecutive quarters of losses that began in the fourth quarter of 2022. The company stated, "Looking at the fourth-quarter results alone, operating profit before deducting allowance for bad debts (consolidated) reached 32.2 billion KRW, returning to the level before the Legoland incident," adding, "This is the result of diversifying revenue sources away from a real estate finance-centered profit structure."

The newly established S&T (Sales and Trading) division led the performance improvement. The Bond Headquarters and FICC Headquarters showed improved results compared to the previous quarter, and with the launch of the Trading Headquarters and Equity Derivatives Headquarters last year, the S&T division achieved operating profits in the 15 billion KRW range.

Daol Savings Bank, a key subsidiary included in the consolidated results, also improved its performance compared to the previous quarter and recorded a profit. Supported by improved interest income on deposits and gains on securities valuation, it achieved an operating profit of 22.1 billion KRW in the fourth quarter.

Considering exposure to real estate project financing (PF), Daol Investment & Securities set aside a provision of 33.8 billion KRW in the fourth quarter. Recently, the Financial Supervisory Service ordered securities firms to proactively accumulate provisions related to real estate PF.

A Daol Investment & Securities official said, "Last year, we aimed to build a balanced business portfolio by establishing the S&T division and strengthening retail sales," adding, "We have recruited many talented personnel and are in the final stages of organizational restructuring, so we expect more stable profit generation in 2024."

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