With the stock market booming, South Korean securities firms reported profits in the first half of this year that matched last year's total. In response, financial authorities are urging the industry to expand its social contributions and foster mutual growth with investors. They highlighted that the scale of social contributions from securities firms is disproportionately small compared to banks, calling for a greater sense of social responsibility in line with their increased profits and roles.
On September 29, the Financial Supervisory Service (FSS) held a meeting in Seoul's Yeouido with CEOs from 23 securities firms to discuss current issues in the industry and future directions. FSS Chairman Lee Chan-jin noted that while many individual investors faced challenges due to significant market volatility this year, the securities sector achieved results nearly equivalent to last year's total performance in just the first half. He emphasized, "It is time to fulfill our responsibility for mutual growth with investors, who are the foundation of our existence."
Indeed, the performance of securities firms has reached record levels. According to FSS data, the net profit of 37 domestic securities firms in the first half of the year amounted to 8.6 trillion won, exceeding 60% of the 13.8 trillion won net profit reported by 20 domestic banks. Lee acknowledged, "It is true that while securities firms continue to enjoy profits, many investors, who are the foundation of our existence, are experiencing losses," urging the industry to consider ways to grow alongside investors.
Notably, the FSS directly compared the scale of social contributions between securities firms and banks. Last year, domestic banks spent 2.2 trillion won on social contribution activities, while domestic securities firms contributed only 500 billion won, roughly 1/44th of the banks' amount.
Lee stated, "The achievements of the securities industry were made possible because of the investors. We need to reflect on what the industry can do now that investors are facing difficulties." He further requested that firms assess whether they are contributing appropriately given their expanded scale and role.
Additionally, the FSS called for an increase in shareholder returns through measures such as stock buybacks and dividends. Last year, the cash dividend payout ratios for major listed financial investment firms were as follows: Mirae Asset Securities at 11.1%, Kiwoom Securities at 27.1%, Samsung Securities at 35.5%, NH Investment & Securities at 47.3%, and Daishin Securities at 51.0%. Lee emphasized that securities firms should set an example for other companies by enhancing corporate value.
This directive from the FSS is seen as a signal that the demand for 'co-prosperity finance,' which has been ongoing primarily in the banking sector, is now extending to the securities industry. However, the FSS did not specify concrete targets or mandatory ratios for social contributions. The CEOs of securities firms expressed their commitment to taking social expectations and responsibilities seriously, actively practicing shareholder returns and social contributions, while ensuring investor protection is a priority.
* This article has been translated by AI.
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