KB Securities Reports Q4 Operating Loss of 104.3 Billion Won Due to Bond Losses and Brokerage Revenue Decline

Operating Profit of 244.9 Billion KRW Last Year... 70% Decrease Compared to Previous Year

[Asia Economy Reporter Minji Lee] KB Securities announced on the 7th that it recorded an operating loss of 104.3 billion KRW in the fourth quarter, turning to a deficit compared to the same period last year. Revenue during the same period decreased by 80.14% to 322.9 billion KRW, and net loss turned to a deficit of 95.8 billion KRW.

On a cumulative basis, last year's operating profit was 244.9 billion KRW, down 70% from the previous year, and net profit decreased by 64% to 213.3 billion KRW.

Last year, total commission income was 784.7 billion KRW, down 22.7%, with custody fees and financial product fees decreasing by 43.6% and 17.6% to 365.6 billion KRW and 51.0 billion KRW, respectively. Product operation losses recorded a loss of 235 billion KRW.

By business division, the WM (Wealth Management) division was affected by a decrease in brokerage revenue due to an unfavorable market environment, including a 44% decline in the average daily individual transaction amount compared to the previous year. The S&T (Sales and Trading) division experienced bond losses due to a decrease in early redemption margins of ELS (Equity-Linked Securities) caused by stock price declines and global interest rate hikes.

A KB Securities official said, “Due to the stock market downturn and rising market interest rates, the volatility in financial markets led to poor performance in custody fees and the Sales & Trading (S&T) division,” adding, “Nevertheless, the company activated sales in the S&T division through expanding new customers and products such as insurance companies and general corporations, including over-the-counter derivatives trading.”

On the other hand, the IB division built a stable revenue portfolio across four major sectors: DCM, ECM, M&A, and acquisition finance. IB fees increased by 11.2% year-on-year to 378.8 billion KRW. The DCM division led the market by issuing corporate bonds, asset-backed securities (ABS), ESG bonds, and ranked first in global bonds among domestic securities firms, achieving first place in the Bloomberg DCM league table. The ECM division also ranked first by executing IPOs such as LG Energy Solution and Sungil Hightech.

In the M&A and acquisition finance sectors, the company engaged in advisory for the acquisition of Daewoo Construction and expanded overseas acquisition financing. In project finance, it expanded revenue related to domestic infrastructure and alternative investments and secured a position in the REITs market through KB Star REITs.