The first-quarter performance of domestic securities firms has been provisionally tallied to be similar to the same period last year. As global stock market volatility increased, the profit and loss related to derivatives turned into a loss of trillions, and the profit and loss from funds significantly decreased, acting as factors in the decline in performance. On the other hand, the increase in bond revenue due to falling interest rates and rising overseas stock commissions acted as positives.
The Financial Supervisory Service noted that the net profit of domestic securities firms in the first quarter of this year was 2.444 trillion won, a decrease of 272 billion won (1.1%) compared to the same period last year (2.4696 trillion won). However, it is 177% higher than the previous quarter, the fourth quarter of last year.
Revenue from commissions varied for individual investors in the domestic and overseas markets. Custody commission revenue totaled 1.6185 trillion won, a decrease of 26 billion won (0.2%) compared to the same period last year (1.6210 trillion won). While overseas stock-related foreign securities custody commissions increased from 270.8 billion won to 498.9 billion won, an 84.2% increase during the same period, transaction amounts in the KOSDAQ market remained similar to the previous year due to a decline.
Commissions from the investment banking sector reached 943.7 billion won, an increase of 94.8 billion won (11.2%) compared to the same period last year (848.9 billion won). This appears to be linked to increased refinancing demand due to lower interest rates.
The profit and loss generated from proprietary trading using equity capital was significantly impacted by the global stock market decline due to the tariff war originating from the United States. The profit and loss related to funds was 198.7 billion won, which is an 82.1% decrease compared to the same period last year due to overseas stock market adjustments and the contraction of interest funds from falling interest rates.
The profit and loss related to derivatives was a loss of 1.0422 trillion won as evaluation losses from short selling derivative-linked securities increased, down 1.0574 trillion won compared to the same period last year (15.3 billion won). Short selling derivative-linked securities are products that decrease in value when the price of the underlying assets rises.
The profit and loss related to bonds increased by 51.7% during the same period as declining market interest rates acted as a positive factor.
The total assets of securities firms were tallied at 797.4 trillion won, an increase of 42.7 trillion won (5.7%) compared to the end of last year. However, liabilities increased even more significantly. As of the end of March, total liabilities amounted to 704.7 trillion won, a 6.3% increase compared to the end of the previous year.
The FSS evaluated that, "Large securities firms, such as comprehensive investment firms, improved their performance in IB, bonds, and foreign exchange due to lower interest rates," and that, "small and medium-sized securities firms saw slight improvements in performance due to increased overseas commissions and the reversal effect of provisions set last year."
They added, "Uncertainties such as fluctuations in domestic and foreign stock markets, concerns over trade conflicts, and risks such as the contraction of the domestic economy remain," and stated, "We will closely monitor the liquidity and soundness of securities firms and provide guidance on the need for provisions and the disposal of non-performing assets."
Meanwhile, the preliminary profit and loss of the futures company announced on the same day was 20.53 billion won, a decrease of 1.98 billion won (8.8%) compared to the same period last year (22.52 billion won).