In the first half of this year (January to June), the interest income of securities firms approached 10 trillion won. Interest income refers to the money earned by securities firms from managing their own capital or customer deposits.
Bond investments performed well. On the other hand, the revenue from credit facilities, which securities firms earn by lending money to customers, decreased contrary to expectations.
According to the Korea Financial Investment Association's statistical system as of the 21st, the interest income of 60 domestic securities firms in the first half of this year totaled 9.82 trillion won. This represents a 3.14% (298.7 billion won) increase compared to the same period last year. During the same period, interest expenses incurred by securities firms from borrowed funds decreased by 2.32% (151.6 billion won) to 6.0382 trillion won. Since the money earned from interest income was greater than the expenses on interest, the net profit of most securities firms increased.
The securities firm that generated the most interest income was Korea Investment & Securities. It earned 1.1936 trillion won in interest income alone in the first half of this year. Mirae Asset Securities also joined the '1 trillion won club' with an interest income of 1.0611 trillion won. Following them were ▲ Meritz Securities 840.8 billion won ▲ NH Investment & Securities 824.4 billion won ▲ KB Securities 784.2 billion won ▲ Hana Securities 695.1 billion won ▲ Samsung Securities 675.3 billion won.
Interest income includes various items such as loan interest, bond interest, and deposit interest, among which the increase in bond interest was notable. This indicates that securities firms earned significant revenue by managing bonds with their own capital. The scale of bond interest for securities firms increased from 4.8829 trillion won in the first half of last year to 5.4265 trillion won in the first half of this year, a rise of 11.1% (543.6 billion won).
On the other hand, the revenue from credit facilities provided to customers decreased from 1.4557 trillion won in the first half of last year to 1.3774 trillion won in the first half of this year, a drop of 5.38% (78.3 billion won).
The reduction in the base interest rate is cited as the main reason. The Bank of Korea lowered the base interest rate a total of four times from the second half of last year to the first half of this year. Compared to the end of the first half of last year, it decreased by 1 percentage point from 3.5% to 2.5%. As interest rates declined, bond prices increased, while credit facility interest rates decreased.
A source within the financial investment industry noted, "When the base interest rate declines, the interest rates on credit facilities also correspondingly decline, which can reduce revenue. Additionally, depending on the stock market environment, individuals may choose not to invest even by taking out loans, leading to a combination of these two factors affecting the situation."
However, with the increase in investors engaging in 'debt investment' in the second half of this year, the scale of credit trading loans is also growing, raising the possibility that the scale of interest from credit facilities may return to an upward trend. The amount of credit trading loans, which stood at 15 trillion won at the beginning of this year, recorded 22.2388 trillion won as of the 18th.