The S&T division encompasses sales of equities and financial products to corporate clients, bond brokerage, underwriting and management, supply and hedging of on- and off-exchange derivatives, as well as proprietary investment (PI) operations.
The strong performance this quarter was particularly driven by the PI segment. In the PI division, previously invested high-quality assets such as domestic and overseas investment asset management profits and proceeds from the sale of shares in G-Valley Biz Plaza located in Guro delivered solid returns, which were reflected in the first quarter results. The bond brokerage and underwriting segment also stood out. In response to continued expectations of lower bond interest rates, the company strengthened its sales efforts to meet institutional demand. As a result, bond underwriting revenue in the first quarter increased by more than 4 trillion KRW year-on-year, and the company maintained its top-tier ranking in the bank bond league table. The derivatives segment also showed balanced growth in both operations and sales.
Hyundai Motor Securities cited organizational and personnel renewal, as well as enhanced capital efficiency, as the main drivers behind the S&T division's performance growth. Last December, the company established the S&T Headquarters to strengthen its core securities business in operations and trading. It consolidated similar trading and operations teams, such as PI and derivatives markets, under the S&T Headquarters. In addition, an external expert with specialized capabilities was recruited as the head of the S&T Headquarters. Subsequently, the company announced plans to enhance corporate value by diversifying revenue sources within the S&T division, increasing financial product assets under custody, stabilizing dedicated small bond trading operations, and maintaining a top-tier position in the bank bond league table, thereby establishing a stable foundation for profit generation.
Starting in the second quarter, Hyundai Motor Securities plans to actively generate profits using its own capital. The S&T division is also preparing to enhance capital efficiency, ranging from proprietary investment to derivatives trading. In particular, for proprietary investment, the company aims to secure stable cash flow by expanding its investment scope to include non-real estate deals. The derivatives trading segment is also expected to pursue various arbitrage and forward transactions by increasing the investment book limit.
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