[Asia Economy Reporter Lee Jung-yoon] It has been confirmed that the net profit of domestic asset management companies in the third quarter of this year more than doubled compared to the previous quarter. However, it decreased by more than 40% compared to the same period last year.
According to the Financial Supervisory Service on the 8th, the net profit of asset management companies in the third quarter was 362.5 billion KRW, an increase of 113.7% compared to the previous quarter and a decrease of 41.5% compared to the same period last year.
Fee income was 1.0344 trillion KRW, down 4.3% from the previous quarter and 1.6% from the same period last year. Fund fees decreased by 5.6% compared to the previous quarter, while discretionary advisory fees increased by 2.2%. Selling and administrative expenses rose 2.8% to 670.9 billion KRW. In addition, securities investment gains and losses generated from proprietary asset management amounted to 51.6 billion KRW, an increase of 169.4 billion KRW compared to the previous quarter.
As of the end of September this year, the assets under management (fund trust assets and discretionary investment contract assets) of asset management companies stood at 1,401.1 trillion KRW, up 2.9% from the end of June.
Fund trust assets were 821.4 trillion KRW, and discretionary investment contract assets were 579.6 trillion KRW, increasing by 0.4% and 6.6% respectively compared to the previous quarter. Public offering funds saw a slight increase in derivatives but decreased by 10.8 trillion KRW compared to the end of June due to declines in money market funds (MMFs) and others. Private funds increased by 14 trillion KRW during the same period, mainly in MMFs, real estate, and special assets. Discretionary investment contract assets increased by 6.6% from the previous quarter to 579.6 trillion KRW, driven by increases in bonds and mixed bonds.
Among 414 asset management companies, 188 recorded profits, while 226 posted losses. The ratio of loss-making companies was 54.6%, down 6.8 percentage points from the end of June.
The return on equity (ROE) of asset management companies rose 5.8 percentage points from the previous quarter to 11.5%, but fell 11.5 percentage points compared to the same period last year.
An official from the Financial Supervisory Service explained, "During the third quarter, profitability indicators such as assets under management and net profit of asset management companies improved somewhat compared to the previous quarter, but the operating environment remains unfavorable due to continuous interest rate hikes and inflation, and this situation is likely to persist for the time being."
He added, "The Financial Supervisory Service plans to prepare for internal and external risk factors such as interest rate hikes and to check the financial and profit and loss status of companies with weak revenue bases, including newly established asset management companies. We will continue to monitor trends in fund inflows and outflows and potential risk factors."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
