The headquarters of DB Securities in Yeouido, Yeongdeungpo-gu, Seoul. [Provided by DB Securities]
The headquarters of DB Securities in Yeouido, Yeongdeungpo-gu, Seoul. [Provided by DB Securities]

DB Securities posted net profit of about 40.4 billion won ($28.6 million) in the second quarter of this year, a gain of more than 30 percent from the previous quarter, as a buoyant stock market lifted its wealth management (WM) unit and its proprietary investment (PI) division continued to grow. First-half earnings also pushed the firm's standalone equity above 1 trillion won for the first time in its history.

First-half consolidated net profit reached 70.8 billion won, up 49.4 percent from the same period last year, DB Securities said Friday. Operating profit rose 36.8 percent to 77.7 billion won.

With first-quarter net profit at 30.4 billion won and operating profit at 30.2 billion won, second-quarter net profit comes to about 40.4 billion won — a 32.9 percent increase from the prior quarter. Second-quarter operating profit was about 47.5 billion won, up 57.3 percent.

By business segment, the WM unit benefited from the strong equity market while the PI division also expanded, together lifting overall earnings. The bond unit, however, saw some margin pressure as interest rates rose. The investment banking and project financing (PF) divisions maintained solid profitability amid intensifying industry competition, adding staff and expanding their organizations.

Subsidiary performance also improved. DB Asset Management broadened its earnings base as assets under management grew, while DB Savings Bank held steady as real estate-related provisions eased.

The earnings improvement translated into capital accumulation. The buildup of first-half profits pushed DB Securities' standalone equity above 1 trillion won for the first time since the firm's founding. In June, the company also issued 150 billion won in hybrid securities. As a result, the consolidated net capital ratio rose to 421.3 percent, up 77.4 percentage points from the end of last year.

Beyond capital building, DB Securities is now moving to secure long-term funding. According to investment banking industry sources, the firm plans to conduct a book-building process targeting institutional investors on Sept. 2 for a public corporate bond issuance of 150 billion won, with the option to increase the deal to as much as 200 billion won depending on demand. It would be the firm's first foray into the public corporate bond market in about 15 years, since 2011.

"Although the second half is expected to bring a more challenging market environment — including a potential shift to a weaker stock market — we will sustain stable growth based on the earnings improvement and strengthened financial capacity we built in the first half," a DB Securities official said. "We will continue to sharpen the competitiveness of our core businesses and expand the PI division's results to maximize corporate value."


hajun825@heraldcorp.com