The total net profit for all securities firms last year was close to 7 trillion won, thanks to an increase in proprietary trading gains, which grew over 20% compared to the previous year.
According to the Financial Supervisory Service on the 24th, the net profit of 60 securities firms last year was 6.9 trillion won, a 23.0% increase from the previous year (5.7 trillion won). The return on equity (ROE) for these companies was 8.0%, rising by 1.2 percentage points during the same period.
Commission revenue increased from 11.7 trillion won in 2023 to 12.9 trillion won last year, due to a surge in overseas stock transactions from $288 billion to $530.8 billion, which increased custodial fees.
The corporate finance (IB) sector generated fees of 3.7 trillion won, a 14.2% increase from the previous year due to new transactions in some quality real estate project financing. Fees in the asset management sector totaled 1.3 trillion won, up 15.4% from the previous year.
Last year, proprietary trading gains increased by 36.5% compared to the previous year to 12.6 trillion won. Of this, gains related to funds decreased by 81.5% to 301.6 billion won, but gains related to derivatives increased by 68.8% compared to the previous year.
Gains related to derivatives, which were minus (-) 4.8 trillion won the previous year, decreased to -1.5 trillion won last year. Other asset gains were 2.9 trillion won, while selling and administrative expenses totaled 12.3 trillion won.
As of the end of last year, the total assets of the 60 securities firms amounted to 755.3 trillion won, while liabilities stood at 663.5 trillion won, and capital was 91.8 trillion won.
The average net capital ratio was 801.8%, an increase of 55 percentage points from the end of the previous year. All securities firms surpassed the regulatory ratio of 100%.
The average leverage ratio of these companies was 662.3%, up 15.9 percentage points from the end of the previous year. All securities firms met the leverage regulatory ratio of 1100%.
Last year, the total net profit of the three futures companies was 79.9 billion won, a decrease of 13.9% compared to the previous year. Their average ROE was 11.7%, down 4.0 percentage points during the same period.
As of the end of last year, the total assets of the futures companies amounted to 5.8 trillion won, liabilities were 5.0 trillion won, and capital stood at 715.4 billion won. The average net capital ratio was 1438.3%.
The FSS noted that “the net profit of securities firms has continued to recover since hitting a low of 4.5 trillion won in 2022,” adding that “while large securities firms generally improved their performance, smaller firms faced poor results due to increased bad debt expenses.”