Last Year, Securities Firms' Net Profit Approached 7 Trillion Won... 23% Surge Compared to Previous Year

Last year, the net profit of domestic securities firms nearly reached 7 trillion won, marking a significant 23% increase compared to the previous year.

According to the "2024 Securities and Futures Companies Business Performance (Preliminary)" report released by the Financial Supervisory Service (FSS) on the 24th, the net profit of 60 securities firms last year was 6.987 trillion won, up 1.3063 trillion won (23.0%) from 5.6807 trillion won the previous year.

This continued the recovery trend on an annual basis after hitting a low point of 4.5 trillion won in 2022, when high interest rates fully took effect. In particular, excluding one-time dividend income of 2.2 trillion won generated in 2023, the net profit increase reached 3.5 trillion won (103.0%).

The FSS explained, "Market volatility expanded due to rises in major stock indices and exchange rates, leading to increased proprietary trading profits. Additionally, increases in overseas stock trading volume and the resumption of some real estate project financing (PF) new deals contributed to strong performance in brokerage and corporate finance (IB) sectors."

However, while the performance of large firms generally improved, small and medium-sized firms showed sluggish results due to increased bad debt expenses, confirming a 'polarization phenomenon.'

Looking at the items, annual commission income rose 10.4% year-on-year to 12.9457 trillion won. In particular, with a surge in overseas stock trading, custody fees (6.2658 trillion won) showed a double-digit increase of 13.3%. The IB sector and asset management sector commissions also increased by 14.2% and 15.4%, recording 3.7422 trillion won and 1.2903 trillion won, respectively.

Proprietary trading profits of securities firms (12.5776 trillion won) increased by 3.3641 trillion won (36.5%). Fund-related profits (301.6 billion won) decreased by 1.3267 trillion won, while derivative-related profits (-1.486 trillion won) improved. Other asset profits such as foreign exchange and loans were 2.9843 trillion won, similar to the previous year's 3.01 trillion won. During the same period, selling and administrative expenses rose 13% to 12.2557 trillion won.

As of the end of last year, the total assets of securities firms were 755.3 trillion won, a 10% increase from the previous year. While bond holdings and loans increased by double digits, credit extensions decreased. Total liabilities expanded by 61.9 trillion won to 663.5 trillion won. During the same period, securities firms' equity capital increased by 6.5 trillion won (7.6%) to 91.8 trillion won.

The net asset ratio, a soundness indicator, rose 55.0 percentage points from a year earlier to 801.8%. All securities firms' net capital ratios exceeded the regulatory threshold (over 100%). The leverage ratio also increased by 15.9 percentage points during the same period to 662.3%.

The FSS stated, "Amid increasing domestic and international uncertainties such as concerns over U.S. tariff impositions, risks such as real estate PF and overseas alternative investment defaults still remain. We will closely monitor the liquidity and soundness of securities firms, continue to guide the disposal of non-performing assets, and promote improvements in NCR calculation methods and refinement of liquidity regulation systems to support stable growth by enhancing securities firms' loss absorption capacity."

Meanwhile, the net profit of three futures companies last year was 79.91 billion won, down 12.86 billion won (13.9%) from the previous year. Return on equity was 11.7%, 4 percentage points lower than a year ago. Total assets increased by 3.3% to 5.769 trillion won, total liabilities rose 2.2% to 5.0536 trillion won, and equity capital expanded 12.3% to 715.4 billion won, respectively.