Brokerage subsidiaries of South Korean financial holding companies posted first-quarter earnings surprises, emerging as key profit engines as a strong stock market and broader revenue streams lifted results.
According to the financial investment industry on Thursday, major brokerages including NH Investment & Securities, KB Securities and Shinhan Investment Corp. reported sharp year-on-year gains for the first quarter.
NH Investment & Securities posted quarterly record results with revenue of 8.8976 trillion won, operating profit of 636.7 billion won and net profit of 475.7 billion won. The firm also reported rapid growth in high-net-worth clients: customers with at least 100 million won totaled 358,000, and those with at least 1 billion won totaled 24,000, both up by double-digit rates.
KB Securities reported net profit of 350.2 billion won, up 92.8% from a year earlier. The company cited growth in client assets in wealth management and stronger competitiveness in investment banking, including debt capital markets and equity capital markets.
Shinhan Investment Corp. reported operating profit of 386.4 billion won and net profit of 288.4 billion won, up 228.5% and 167.4%, respectively. The company posted broad-based growth across divisions, including investment banking and fees from financial products, alongside brokerage.
The gains also showed up in holding-company results. KB Financial Group and Shinhan Financial Group both posted record first-quarter net profit, with their brokerage affiliates’ contributions rising to about 18.5% and 17.8%, respectively, the report said. Analysts said the figures point to a faster shift away from bank-centered earnings toward a more diversified nonbank portfolio.
Differences among groups were also evident. Hana Securities reported first-quarter operating profit of 141.6 billion won and net profit of 103.3 billion won, up 47.9% and 37.1%, respectively. Hana Securities said higher fee income and increased sales of financial products in wealth management helped results, while investment banking benefited from a strategy focused on high-quality deals and performance in acquisition finance. It added that its sales and trading unit maintained competitiveness in issuing derivative-linked securities and focused on risk management amid volatile markets.
Still, the brokerage unit’s contribution to the group is viewed as relatively limited compared with rival holding companies.
Market participants said the results reflect not only a buoyant stock market but also structural change, as brokerages expand beyond commission-based trading into wealth management, investment banking and trading to generate steadier earnings during periods of volatility.
For financial holding companies, the role of brokerages is expected to grow as interest-rate swings and tighter lending conditions limit reliance on bank net interest income, strengthening the influence of nonbank affiliates on group performance.
“Brokerages have moved beyond being simple affiliates and have become core businesses that can shape holding-company results,” an industry official said. “Their presence within groups could grow further depending on platform competitiveness and stronger global investment-banking capabilities.”
* This article has been translated by AI.
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