Korea Investment and Securities Co. netted 130 billion won in profit in the first quarter, topping the industry, which the company attributed to expanded replacement investments and diversified operational areas.
The company said net profit was up 104.5 percent year-on-year, surpassing its closest rivals Mirae Asset Daewoo Securities (110.2 billion won) and KB Securities (108.8 billion won) on sales of 1.909 trillion won and operating profit of 169.1 billion won, respectively.
Diversification of business areas has been noted as one of the causes of Korea Investment and Securities Co.’s success, along with improved stock market conditions and uncertainty in the political sector followed by increases in replacement investments in overseas real estate.
Industry sources said the Hananasa Real Estate Investment Trust No. 1 Fund was sold out in a short time with the companies expanding their investment areas to boost profits. Mirae Asset Daewoo Securities came in second in net profit among the securities firms, but its net profit rose sharply this year due to the merger of Mirae Asset Securities and Daewoo Securities, rising 174.2 percent to 110.2 billion won on sales of 3.9986 trillion won. Operating profit came in at 145.5 billion won.
The funds with trust and wealth management sectors came to 219 trillion won, with the number of customers with more than 100 million won in those accounts totaling around 132,820, up 5 trillion won in assets and 3,100 investors. The outstanding balance of overseas shares amounted to around 900 billion won with those in the trust accounts overseas coming to 1.3 trillion won.
According to the firm, the amount of client assets in its trust and asset management business expanded 5 trillion won from the previous quarter to 219 trillion won, and the number of clients also increased about 3,100 to 132,820 in the first quarter.
“Our profit-making structure has been more stabilized with profit from consignment accounting for 26 percent, asset management 16 percent, investment banking 12 percent and trading 27 percent in the net operating profit of 297.9 billion won in the first quarter,” said an official from the company.
NH Investment & Securities Co. recorded net profit of 88.6 billion won, up 38.3 percent from the previous year. Operating profit rose 40 percent to 120 billion won and sales were up 16.5 percent to 3.62 trillion won. “Our earnings improved thanks to good performance in the investment banking businesses such as corporate bonds, new share issues and initial public offering on top of expanded profits from asset management,” said an official from the company.
South Korean companies will likely report their highest ever first-quarter earnings thanks to brisk exports of semiconductors and petrochemical goods, as well as diversified export destinations.
They are expected to report the stellar performance despite political turmoil at home and China’s retaliation against Korea’s deployment of an U.S. antimissile system, Terminal High Altitude Area Defense System (THAAD), and increasing protectionism on the global trade front.
According to Seoul-based market data provider FnGuide, the combined operating profit of 524 Kospi- and Kosdaq-listed companies for the first quarter ended March this year jumped 26.7 percent to 44.68 trillion won ($40 billion) from the same period of last year. Combined sales climbed 7.9 percent to 468.3 trillion won over the same period. Both operating income and sales are record highs for the first quarter, with the 524 surveyed companies accounting for 84 percent of all listed firms based on first-quarter sales in 2016. FnGuide data showed that combined sales of listed companies that reached 424 trillion won in the first quarter of 2014 retreated to 405.8 trillion won a year later. But total sales rebounded to 433.8 trillion won over the same period of 2016.
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