south Korean Securities Firms Poised for Record Profits Amidst KOSPI Surge
A wave of optimism is sweeping thru South Korea’s financial sector as six of the nation’s largest securities firms – NH Investment, Korea Financial Group, Kiwoom, Mirae Asset, Samsung, and Meritz financial Group – are projected too substantially outperform expectations in the third and fourth quarters of this year. Combined net profits for the third quarter are anticipated to exceed 2 trillion won, representing a considerable 13% increase year-over-year, fueled by record-high trading volumes and strategic business diversification.
Surging Profits Driven by market Momentum
According to data compiled by financial information company FnGuide on Thursday,the collective operating profit for these six firms is forecast to reach KRW 2.7867 trillion for the combined third and fourth quarters. This figure marks a 3.4% increase from the previous estimate of KRW 2.6952 trillion just one month prior. Net profit is also experiencing an upward trend, climbing 3.5% to KRW 2.1118 trillion, compared to the earlier projection of KRW 2.04 trillion. the industry is expected to demonstrate a marked enhancement in performance, exceeding last year’s figures by more then 13% (KRW 1.8665 trillion).
Korea financial Group Leads Upward Revisions
Examining the adjustments to individual company operating profit forecasts, Korea Financial Group experienced the most importent upward revision, with an increase of 14.4%. The operating profit forecast was raised
Mirae Asset Securities and Samsung Securities Projections
Mirae Asset Securities anticipates a 10.0% rise in operating profit and a 4.6% increase in net profit, while Samsung Securities projects operating and net profit gains of 3.5% and 5.5%, respectively. Meritz Financial Group is expected to maintain a performance level comparable to the previous year, with a slight decrease of 1.7% in both operating profit (KRW 886.2 billion) and net profit (KRW 645 billion).
Brokerage Fees Fuel Industry Expansion
The primary driver behind this positive performance is the significant increase in brokerage fees. As the KOSPI index continues to reach all-time highs, the surge in stock market trading volume and heightened investor participation are directly contributing to increased brokerage profits. The Korea Exchange reports an average daily trading value of KRW 16.8912 trillion this month, a substantial 46% increase compared to last month’s average of KRW 11.554 trillion.
Integrated Investment Accounts Offer New Growth Potential
Adding to the optimistic outlook, industry observers anticipate the approval of Integrated Investment Accounts (IMA), a new potential revenue stream for major securities companies, within the year. The Financial Services Commission and the Financial Supervisory Service recently announced plans to expand the number of complete financial investment business operators eligible for IMA and bill issuance. Currently, three companies – Korea Investment & Securities, Mirae asset Securities, and NH Investment & Securities – have applied for IMA approval, a designation reserved for investment companies with equity capital of KRW 8 trillion or more. IMA is expected to serve as a next-generation growth engine, enabling firms to generate profits by investing customer deposits in diverse sectors, including corporate finance-related assets, while upholding principal payment obligations.
Positive Outlook Extends into Next Year
The securities industry broadly predicts that the current uptrend will persist into the next year,supported by the continued rise of the KOSPI and the anticipated approval of IMA. According to a researcher at Yuanta Securities, “IMA approval is expected to be decided at the end of the year,” and further predicted that “in the case of Korea Investment & Securities, the IMA procurement scale is expected to be around 10 trillion won, so a profit increase of about 100 billion won is expected.” As an inevitable result, Korea Financial Group’s target stock price has been revised upwards to KRW 210,000, representing a nearly 17% increase.
[email protected] Reporter Kim Mi-hee
