As the domestic stock market shows high volatility after a sharp rise, brokerages are posting record earnings. Following strong first-half results from NH Investment & Securities and Kiwoom Securities, major brokerages such as Korea Investment, Mirae Asset, and Samsung Securities are also expected to post first-half net profits of around 1 trillion won.
According to the financial investment industry on the 30th, NH Investment & Securities' second-quarter net profit attributable to controlling shareholders was 489.4 billion won, up 90.5% from a year earlier. With that, NH Investment & Securities posted 925.2 billion won in net profit attributable to controlling shareholders in the first half alone, nearing 90% of last year's full-year net profit (1.0315 trillion won).
NH Investment & Securities' strong results stemmed from balanced growth across all divisions, including brokerage (trading intermediation), investment banking (IB), and financial product sales. Helped by an increase in trading value, brokerage fee revenue came to 445.6 billion won. Financial product sales fees were 76.8 billion won, IB fee revenue was 108.3 billion won, and gains from proprietary investment were 407.3 billion won.
Kiwoom Securities also surpassed 1 trillion won in first-half net profit. The company said that first-half net income rose 119.4% from a year earlier to 680.6 billion won. Including first-quarter net profit, cumulative first-half net profit exceeds 1 trillion won. A surge in brokerage profits drove the results. Stock commission revenue rose 178.3% on-year to 451.9 billion won, and profits from the trading division also increased 109.4%.
In the securities industry, there is an outlook that the top five brokerages' half-year net profit could reach 1 trillion won this year, backed by increased domestic market transaction value. According to Meritz Securities, the domestic average daily transaction value in the second quarter of this year was 90 trillion won, up 284% from a year earlier. A 1 trillion won net profit is regarded as a symbolic milestone proving stable revenue-generating power in the securities industry.
The place expected to post the largest net profit is Mirae Asset Securities(006800). Sangsangin Investment & Securities projected Mirae Asset Securities' second-quarter consolidated net profit attributable to controlling shareholders at 2.582 trillion won, up 540.3% from a year earlier. While brokerage revenue is expected to maintain solid growth at 536 billion won, the valuation of its SpaceX equity holdings is reflected. Sangsangin Investment & Securities estimated Mirae Asset Securities' SpaceX equity value at 5.4 trillion won as of the end of June.
Korea Investment Holdings is also expected to continue strong growth. SK Securities projected the company's second-quarter net profit attributable to controlling shareholders at 881.7 billion won. Including first-quarter results, first-half net profit is seen at around 1.7 trillion won, or about 90% of last year's full-year net profit. Jang Young-im, an analyst at SK Securities, said, "Brokerage fee revenue will lead earnings growth at 413.9 billion won, up 31.9% from the previous quarter," adding, "Net interest income from increased margin lending is also projected at 248 billion won."
Samsung Securities is also expected to come close to 1 trillion won in first-half net profit. Sangsangin Investment & Securities estimated Samsung Securities' second-quarter net profit attributable to controlling shareholders at 505 billion won. As transaction value centered on domestic stocks and ETFs increases, brokerage revenue is expected to reach 450.6 billion won. In contrast, while trading revenue and WM revenue should remain steady, IB and other revenue are expected to decline due to a lack of large deals.
However, there is also the possibility that earnings growth will slow in the second half depending on whether transaction value normalizes and investor sentiment softens. Park Hye-jin, an analyst at Daishin Securities, said, "It is difficult to predict second-half transaction value, but given how active trading was in the first half and that standards related to single-stock leveraged ETFs have been tightened, it will not be easy for transaction value to remain at first-half levels," adding, "A selective approach is needed, focusing on names where valuation pressure has eased due to the recent pullback."