South Korea's midsize brokerages posted sharp profit growth in the first half, following record results at the country's largest securities firms. A buoyant domestic stock market lifted trading volumes, improving profitability in brokerage and wealth management, while diversified revenue streams such as proprietary investment and trading added to the gains.
Nine midsize brokerages — Toss Securities, Kyobo Securities, Yuanta Securities Korea, LS Securities, DB Financial Investment, Hyundai Motor Securities, SK Securities, Daol Investment & Securities and Sangsangin Securities — reported a combined first-half net profit of 829.2 billion won ($598 million), according to financial investment industry data released Wednesday.
Toss Securities led with 236.8 billion won, up 80% from a year earlier and its highest-ever half-year result. Yuanta Securities Korea and SK Securities surged about 298% and 267% to 129.8 billion won and 56.9 billion won, respectively, while LS Securities rose 116.3% to 73.9 billion won.
Higher trading volumes on the rising market were a common driver. Toss Securities' domestic stock trading volume reached 692 trillion won in the first half, roughly eight times the year-earlier figure, and its brokerage commission income rose 87% to 343.6 billion won. LS Securities' commission income climbed 91.7% to 123.4 billion won, while SK Securities saw gains in both brokerage and proprietary account operations.
Strategies to broaden revenue through wealth management, retail and asset management also paid off. Kyobo Securities posted first-half net profit of 158.5 billion won, up 49.5% from a year earlier. Its growth was supported by improved wealth management profitability from more active domestic and overseas stock trading, trading gains in its sales and trading division after preemptive moves against interest rate volatility, and strong deal sourcing in investment banking. DB Financial Investment saw net profit rise 49.4% on growth in wealth management and proprietary investment, while Hyundai Motor Securities gained 48.2% on strong retail performance.
Midsize firms that have pursued business diversification also showed improved results. Daol Investment & Securities posted first-half net profit of 32.2 billion won, extending its run of profitability to six consecutive quarters, while Sangsangin Securities earned 11.1 billion won as all its business divisions — asset management, wholesale, investment banking and retail — turned even profits. An official at Daol Investment & Securities said its business diversification and risk management, pursued over several years, had borne fruit and put earnings on a stable footing.
With strong results extending from large firms to midsize players, the warmth of the market boom appears to be spreading across the securities industry. South Korea's 10 largest brokerages earlier reported first-half net profit of 10.26 trillion won, up 129% from 4.48 trillion won a year earlier, a record high.
