The company posts 92 pct jump in operating profit YoY in Q1 amounting to 57.4 billion won from ELS and DLS financial products
Shinhan Investment Corp. has been drawing extraordinary attention in the financial market for a surprise increase in its profits during the first quarter despite the economic downturn sweeping the country.
The outstanding performance record has been attributed to its financial products and asset management getting away from its stock brokerage business, the mainstay of its operation, financial sources said recently.
The securities firm said its sales revenue for the first quarter amounted to 173.5 billion won, up 35.7 percent YoY and up 92.3 percent from the preceding quarter. The company said its fee income fell 21.9 percent YoY to 68.3 billion won and the profit from its own securities deals rose 113 percent to 60.9 billion won in the quarter.
The company also suffered losses in the securities brokerage operation like all other firms in the business, but it earned a lot of profit in other sectors of its operations, like asset management and the sale of its own financial products.
Operating profit rose 92 percent YoY to 57.4 billion won and net profit jumped 98.5 percent to 47.1 billion won, which ranked the second largest behind Korea Investment and Securities Co.
A key factor for the company’s record figures has been its focus on ELS and DLS financial products to cover for its sluggish stock brokering operation, according to the financial sources.
Assets managed by the sales and trading groups increased from 5 trillion won early last year to 12 trillion won at the end of last year, and 14 trillion won in the first quarter this year, leading to the expanded influence in the bond market for the sales and trading group. Large bond deals over the past several months have surprised the bond market.
Many securities firms bought bonds expecting the key money rate would be cut by the Monetary Board when they met on March 29, but the board decided to keep the key rate unchanged, which led the securities firms to lose money. But Shinhan Investment sold around 70 percent of its bond holdings just before the board meeting and made 11 billion won in profit °™ a month’s worth of profit in just one day °™ boosting the company’s Q1 results.
Senior Manager Shin Jae-myung, in charge of the Asset Management Division, said President Kang Dae-suk launched the Sales and Trading Team to strengthen asset management and other sectors of the company’s operations when he took the helm of the company as CEO last year and it began to pay off in the early period of this year.
Because of its advanced management techniques, Shinhan Investment Corp. is being watched with keen interest as a rising securities company in the domestic market. Currently it is one of the top six in the Korean securities industry, and has strong future potential based on the vast array of synergy effects under the umbrella of the holding company Shinhan Financial Group.
“Focusing on stability and profitability as our top concerns, Shinhan Investment Corp. will put forth its best efforts toward maximizing shareholder value as well as fulfilling our social responsibilities as a corporate citizen. In addition, the company is committed to furnishing creative and innovative services to its customers by reaching beyond the current boundaries of the financial industry and blending a wide variety of financial facilities and functions,” the company said.
“Shinhan Investment Corp. will also solidify its position as an example of a highly successful merger in the domestic securities industry. Under the Shinhan Financial Group’s sponsorship we are creating unique and advanced management techniques, as well as successfully combining the banking and securities functions and facilities usage.”