69.1% Increase Compared to the Previous Year
Due to the slowdown in the stock market's upward trend, the net profit of securities firms in the second quarter decreased by about 30% compared to the previous quarter. The financial authorities also forecast a bleak outlook for the second half of the year.
According to the "Q2 Securities and Futures Companies Business Performance" announced by the Financial Supervisory Service on the 6th, the net profit of 60 securities firms in the second quarter was 1.7703 trillion KRW, down 29.3% from the previous quarter. However, this figure increased by 69.1% compared to the same period last year.
In the second quarter, the slowdown in the stock market's upward trend led to a decrease in valuation gains on collective investment securities, resulting in a decline in proprietary trading profits, which had the greatest impact on the deterioration of profitability. Additionally, the strengthening of real estate project financing (PF) feasibility assessments and increased provisioning also contributed to a decrease in loan-related profits and losses.
Looking at specific items, securities firms' commission income in the second quarter was 3.2211 trillion KRW, a 0.1% increase from the previous quarter.
Custody fees recorded 1.565 trillion KRW, down 3.5% from the previous quarter due to a decrease in stock trading volume, and fees from the IB (Investment Banking) sector were 859.6 billion KRW, down 0.2%.
Asset management fees increased by 16.7% from the previous quarter to 352.8 billion KRW, driven by a rise in discretionary investment fees.
However, as the stock market's upward momentum slowed, fund-related profits declined, causing proprietary trading profits to fall by 11.3% to 2.9707 trillion KRW.
Loan-related profits within other asset profits also decreased by 13.0% from the previous quarter to 802.7 billion KRW.
As of the end of June, the total assets of securities firms amounted to 734.4 trillion KRW, an increase of 11.9 trillion KRW compared to the end of March. Total liabilities rose by 10.2 trillion KRW to 646.7 trillion KRW compared to the end of March.
Meanwhile, the net profit of three futures companies in the second quarter was 22.61 billion KRW, an increase of 900 million KRW from the previous quarter.
The Financial Supervisory Service stated, "There remain potential risks in domestic and international financial markets, such as uncertainties in global macro variables in the second half of the year and restructuring of distressed real estate PF projects. We will closely monitor the possibility of deterioration in securities firms' profitability and soundness, and guide proactive measures such as expanding loss absorption capacity for high-risk exposures and actively disposing of non-performing assets."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
