Brokerages report record first-quarter profits amid steep Kospi rally

Brokerages set record profits in the first quarter on the back of heavy trading amid the steep Kospi rally that is extending through this year.  

Korea Investment & Securities logged 784.7 billion won ($525 million) in consolidated net income in the first quarter, up 75.1 percent on year, amid a surge in trading, the brokerage said in its preliminary report Thursday.  

Its brokerage commission soared 172.4 percent, with the average daily transaction value jumping from 4.8 trillion won in the January to March period last year to 18.5 trillion won in the same period this year. Its brokerage-related interest rose 70 percent as the average margin loan balance increased from 3.3 trillion won to 5.6 trillion won in the same period.  

The company’s net income derived from asset management services accelerated 155 percent amid increased sales fees of funds and derivative products, while its investment banking advanced 14.7 percent on increased fee income and corporate loan interest.  

Other brokerages also posted record first-quarter earnings as the Kospi extended the blistering rally that began last year. Mirae Asset Securities led the gains, posting consolidated net income of more than 1 trillion won for the quarter, up 292 percent from a year earlier and becoming the first local brokerage to surpass the threshold.

The benchmark index notched a series of milestones this year, surging past the 5,000, 6,000 and 7,000 point levels to reach 8,000 points during trading on Friday, less than two weeks after breaking its previous milestone.

Fueled by the market surge, the combined quarterly net income of Korea’s 10 largest brokerages by equity capital more than doubled from a year earlier to 4.3 trillion won.

BY JIN MIN-JI [[email protected]]