Five major South Korean securities firms are projected to achieve combined operating profits approaching 5 trillion won in the second quarter, according to financial data provider FnGuide. Mirae Asset Securities, Korea Financial Group, Samsung Securities, Kiwoom Securities, and NH Investment & Securities collectively recorded a consensus operating profit estimate of 4.895 trillion won for Q2, representing a 130.4% increase compared to 2.1249 trillion won in the same period last year. The surge was driven by increased stock brokerage commissions and wealth management revenues as daily average trading volume in the Korean stock market reached 118.1 trillion won in Q2, a 39.8% increase from the previous quarter.
Five Securities Firms Record Double-Digit Operating Profit Growth
According to FnGuide on the 23rd, the five publicly traded securities firms with three or more estimation agencies showed consensus operating profit estimates totaling 4.895 trillion won for Q2. Net profit forecasts reached 3.4835 trillion won, a 99.3% increase from 1.7478 trillion won in the same period last year.
Mirae Asset Securities led with an operating profit estimate of 1.9098 trillion won, marking a 281.6% increase year-over-year. Korea Financial Group, parent company of Korea Investment & Securities, posted an estimated operating profit of 1.0519 trillion won, up 79.6%.
Samsung Securities' operating profit reached 661.7 billion won, a 114.4% increase. Kiwoom Securities recorded 652.2 billion won with a 59.7% rise, while NH Investment & Securities achieved 619.4 billion won, up 92.4%. All five firms registered double-digit percentage increases in operating profit compared to the previous year.
Trading Volume Surge Drives Brokerage and Credit Revenue
The common factor behind securities firms' improved performance was the increase in domestic stock market trading volume. Rising stock prices and high volatility led to expanded brokerage commissions and credit lending interest income.
Daily average trading volume in Q2, including exchange-traded funds (ETFs), reached 118.1 trillion won, a 39.8% increase from the previous quarter. During the same period, customer deposits rose 10.3% and margin trading balances increased 13.1%.
Jeong Tae-jun, a researcher at Mirae Asset Securities, stated: "As Q2 daily average trading volume and credit lending balances increased compared to the previous quarter, brokerage profits are expected to improve overall. However, trading profits will vary by company strategy due to semiconductor-centered market gains, steep market interest rate increases, and additional exchange rate rises."
ETF Market Expansion Creates New Profit Channel
ETF market growth emerged as a new revenue source for securities firms. The proportion of ETF trading volume in the Korea Exchange market rose from 40% in Q1 to 49% in Q2.
Ahn Young-joon, a researcher at Kiwoom Securities, noted: "Revenues related to equity operations and the rising proportion of ETF trading volume will be newly highlighted. In particular, the profit contribution from ETF LP business is expected to be prominent."
Mirae Asset Securities Books SpaceX Investment Gains
Variations in individual company performance growth were influenced by product operation profits and investment asset valuation gains.
For Mirae Asset Securities, SpaceX—in which the firm invested before its listing—went public on Nasdaq in June, and its share price rose through the end of Q2, leading to expectations of large-scale valuation gains. Shinhan Investment & Securities estimated Mirae Asset Securities' Q2 SpaceX-related profit at approximately 1.5 trillion won.
SpaceX listed at an IPO price of $135 in June but fell to $115.26 as of the 22nd closing price, dropping below the offering price in Q3.
Rising Interest Rates Impact Bond Trading Profits
Rising market interest rates placed a burden on securities firms' bond and product operation revenues. Despite significant increases in trading volume, net profit growth compared to the previous quarter is expected to be limited due to reduced product operation profits.
For the second half, the key question is whether stock market trading volume can maintain current levels. Strengthened regulations on single-stock leveraged ETFs may lead to trading contraction, and performance uncertainty has grown due to investment asset price fluctuations.
Park Hye-jin, a researcher at Daishin Securities, explained: "The upward trend in trading volume in the first half was so steep, and standards related to leveraged ETFs are expected to be strengthened. It is not easy to expect the current level to be maintained in the second half."
FAQ
What was the combined Q2 operating profit of South Korea's five major securities firms?
The consensus operating profit estimate for the five major South Korean securities firms—Mirae Asset Securities, Korea Financial Group, Samsung Securities, Kiwoom Securities, and NH Investment & Securities—totaled 4.895 trillion won in Q2, a 130.4% increase from 2.1249 trillion won in the same period last year.
Why did Mirae Asset Securities record the largest profit increase?
Mirae Asset Securities' operating profit estimate of 1.9098 trillion won represented a 281.6% year-over-year increase, driven primarily by an estimated 1.5 trillion won in valuation gains from its pre-IPO investment in SpaceX, which went public on Nasdaq in June and saw share price increases through the end of Q2.
How did ETF trading impact securities firms' Q2 performance?
ETF trading volume's share in the Korea Exchange market rose from 40% in Q1 to 49% in Q2, creating a new profit channel for securities firms through ETF liquidity provider (LP) business and equity operation-related revenues.
