Q3 net profit reaches 383.6 billion won, up 35.5% on-year
Quarter-on-quarter earnings fall as share prices decline
Operating profit down 23.5%, net profit down 21.6% from Q2
Daily stock trading value plunges 41.8%, weighing on brokerage fees
NH Investment & Securities posted more than 520 billion won ($393 million) in operating profit in the third quarter, extending its year-on-year growth streak into the 30 percent range.
The brokerage beat market expectations on the back of solid investment banking results, even as the broader industry faced headwinds from a falling stock market and declining trading volumes. Its cumulative net profit for the first three quarters has already surpassed its full-year net profit for last year. Quarter-on-quarter earnings, however, declined due to a drop in the Kospi and lower trading activity.
NH Investment & Securities disclosed Monday that its consolidated operating profit for the third quarter came to 521.1 billion won on a preliminary basis, up 33.2 percent from the same period last year.
Sales reached 6.78 trillion won, a 149.2 percent increase from a year earlier. Net profit rose 35.5 percent to 383.6 billion won. Cumulative net profit for the first three quarters reached 1.35 trillion won, already surpassing the company's full-year net profit of around 1.03 trillion won last year.
The investment banking division maintained strong competitiveness, ranking first in lead underwriting for corporate bonds and financial bonds and second in initial public offering underwriting. The asset management division defended its earnings through conservative management amid rising interest rates and falling share prices.
Compared with the second quarter, when the company recorded its best-ever quarterly earnings, operating profit fell 23.5 percent and net profit for the period declined 21.6 percent.
NH Investment & Securities said the average daily domestic stock trading value in the third quarter fell 41.8 percent quarter-on-quarter to 52.5 trillion won, which weighed on domestic equity brokerage fee income.
The company said its equity capital stands at 11 trillion won and that it has consistently expanded its capital base since being designated as an IMA operator.
It added that it would "expand corporate finance supply through the IMA business and further strengthen customer asset management capabilities, building a stable earnings structure resilient to market volatility through cross-business synergies across wealth management, investment banking and asset management."
Brokerages are expected to release their third-quarter results through mid-November. Unlike the second quarter — when the Kospi broke through the 9,000 mark to set an all-time high — the index fell sharply in the third quarter while trading volumes also dropped significantly, pointing to a steep quarter-on-quarter earnings decline across the sector.
Meanwhile, NH Investment & Securities will hold a seminar titled "Tax Risks for Korea-US Dual Residents and a Guide to Preventing Double Taxation" at its Yeouido headquarters on Nov. 12, targeting domestic customers who hold or are in the process of obtaining US citizenship or permanent residency. The seminar runs from 2 p.m. to 5 p.m. and is limited to 40 participants.
th5@heraldcorp.com
