Hanyang Securities Achieves 'Best Performance in 20 Years' in First Half... What Happened?

Net Profit Increased by 78% in the First Half of This Year

[Asia Economy Reporter Minji Lee] Hanyang Securities has posted excellent results in the second quarter despite the impact of the novel coronavirus (COVID-19), setting a record for the highest half-year performance in 20 years. Significant increases in profits from the Investment Banking (IB) division and the asset management division were key factors.

According to the Financial Supervisory Service's electronic disclosure on the 13th, Hanyang Securities' net profit for the second quarter of this year was 10.85 billion KRW, a 55% increase compared to the same period last year. During the same period, operating revenue and operating profit were 97.86 billion KRW and 14.3 billion KRW, respectively, marking increases of 29% and 55%. On a cumulative half-year basis, net profit reached 19.949 billion KRW, up 78% from the previous year's half-year, approaching the full-year net profit of 22.1 billion KRW in 2019. Operating revenue recorded 234.752 billion KRW, an 84% increase.

Looking at operating revenue by division for the first half of the year, brokerage sales amounted to 658.1 million KRW, a 37% increase from one year ago. Proprietary trading (asset management) and the IB division recorded 183.24 billion KRW and 36.072 billion KRW, respectively, showing explosive growth rates of 100% and 67%.

The IB division's performance was driven by the bond issuance (DCM) sector and the real estate project financing (PF) sector. The company achieved significant performance improvements in the bond sector by recruiting top talent and establishing a diverse portfolio of operations. Despite the adverse effects of COVID-19, the asset management division shone through thorough risk management and stable operations. However, operating expenses (206.9 billion KRW) increased by 84% compared to the first half of last year due to higher personnel costs from recruiting top talent.

Since the appointment of CEO Lim Jae-taek in March 2018, net profit has rapidly increased. Net profit, which was only 4.6 billion KRW in 2018 on an annual basis, grew to 22.1 billion KRW in 2019, and this year, net profit nearly reached 20 billion KRW in just two quarters. A company official explained, “As a result of building a balanced portfolio and a sustainable growth platform, performance has risen evenly across all divisions.”