The Financial Supervisory Service noted that the total net profit of 61 domestic securities firms for the third quarter of this year (July to September) was 1.81 trillion won. This is an increase of 2.4% (425 billion won) compared to the second quarter of this year. Compared to the same period last year, it jumped by 102% (914.3 billion won).
In terms of commission income and loss, fees from the investment banking (IB) sector increased. This is due to the rise in new real estate project financing (PF) as we entered a phase of interest rate cuts. The IB sector's fees for the third quarter of this year totaled 991.3 billion won, an increase of 15.3% (131.7 billion won) from the previous quarter.
Bond investments also performed well. For the third quarter of this year, the profit and loss related to bonds among proprietary trading profits marked 4.15 trillion won, an increase of 26% (856.3 billion won) compared to the previous quarter. During the same period, due to the decline in exchange rates, the profit and loss related to foreign currency also recorded a turnaround to 420.1 billion won, an increase of 661.2 billion won.
The sluggish domestic stock situation was fully reflected in the profits and losses of securities firms. As transaction volumes decreased, the trust commissions for securities firms in the third quarter of this year amounted to 1.5382 trillion won, marking a three-quarter consecutive drop. Among proprietary trading profits, losses came to 864.2 billion won from fund investments, 366.8 billion won from derivative investments, and 25.3 billion won from stock investments. The Financial Supervisory Service identified the increase in valuation losses due to the decline in the domestic stock market as the main reason.
As of the end of September this year, the total assets of securities firms were 770.8 trillion won, liabilities were 680 trillion won, and equity capital amounted to 90.8 trillion won. Equity capital increased by 3.7% (3.2 trillion won) compared to the end of June, and all securities firms maintained the regulatory ratio (over 100%) for the net capital ratio.
The net profit for the three futures companies in the third quarter of this year was 18.71 billion won, which is a decrease of 17.3% (3.9 billion won) compared to the previous quarter. During the same period, the return on equity (ROE) decreased by 0.6 percentage points to 2.7%.
The Financial Supervisory Service noted that although securities firms have consistently reported good performance, recent volatility in the financial markets has increased, and concerns about the potential risks in some vulnerable sectors have spread as high interest rates persist. In response, the Financial Supervisory Service plans to assess the likelihood of deterioration in the profitability or soundness of securities firms, and guide them to increase provisions related to high-risk exposure and actively manage non-performing assets.