Asset Management Firms Report Q3 Net Profit of 620.2 Billion KRW...Continued Record High Profit Streak

[Asia Economy Reporter Park Jihwan] The domestic asset management industry continues its streak of breaking the record for the highest quarterly net profit, posting 620.2 billion KRW in net income for the third quarter of this year.

According to the Financial Supervisory Service on the 9th, as of the end of September, the assets under management (AUM) of asset management companies were tentatively estimated at 1,290.4 trillion KRW, an increase of 21.9 trillion KRW (1.7%) compared to the end of June.

Fund custody assets stood at 768.8 trillion KRW, and discretionary investment contracts amounted to 521.6 trillion KRW, increasing by 17.8 trillion KRW (+2.4%) and 4.1 trillion KRW (+0.8%) respectively from the end of June. Public offering fund custody assets rose by 80 billion KRW to 286.7 trillion KRW. Equity and fund-of-fund custody assets increased by 2.2 trillion KRW and 1.2 trillion KRW respectively, while bond-type assets decreased by 2.4 trillion KRW. Private fund custody assets grew by 17 trillion KRW from the end of June to reach 482.1 trillion KRW. Real estate, special assets, and mixed assets all increased evenly by between 2.9 trillion KRW and 3.8 trillion KRW.

As the size of assets under management grew, the profits of asset management companies also showed a clear upward trend. The net profit of asset management companies in the third quarter was 620.2 billion KRW, breaking the previous record again following the second quarter. This represents a 2.1% increase from the second quarter and a 35.6% increase compared to the same period last year.

However, operating profit decreased by 21.3 billion KRW (-3.1%) from the second quarter due to a decline in fee income. Fee income of asset management companies was 1.0512 trillion KRW, down 52.4 billion KRW (4.7%) from the second quarter. Securities investment gains in the third quarter were 199.6 billion KRW, 32.5 billion KRW (19.5%) higher than in the second quarter.

By company, out of a total of 343 asset management firms, 268 posted profits while the rest recorded losses. Among specialized private collective investment business operators, 64 out of 270 reported losses.

The return on equity (ROE) for the third quarter was 23.0%, down 1.0 percentage point from the second quarter but up 1.4 percentage points compared to the same period last year.

A Financial Supervisory Service official analyzed, "The assets under management and net profits of asset management companies have been continuously increasing in the third quarter. The ratio of loss-making companies is decreasing, and ROE is maintaining an improved level, indicating that the asset management industry is generally stable."

The Financial Supervisory Service plans to regularly inspect the financial and profit and loss status of asset management companies and continuously strengthen monitoring of potential risk factors in response to trends in fund custody assets and changes in the financial market environment.