Q3 operating profit falls 77% from prior quarter to 83.4 billion won

Nine-month net profit up 78.9% year-on-year to 642.9 billion won

The headquarters of Shinhan Securities in Yeouido, Seoul. [Shinhan Securities]
The headquarters of Shinhan Securities in Yeouido, Seoul. [Shinhan Securities]

Shinhan Securities reported a net profit of 65.3 billion won ($49.4 million) for the third quarter, down 77.4 percent from 289.3 billion won in the previous quarter, the company announced Tuesday.

According to Shinhan Financial's third-quarter earnings report, Shinhan Securities posted operating profit of 83.4 billion won in the quarter, a 77 percent drop from 362 billion won in the prior quarter. Operating revenue fell 52.4 percent to 367.8 billion won from 772.6 billion won over the same period.

Fee income declined 47.2 percent to 278.7 billion won from 527.9 billion won the previous quarter. Within that, brokerage commissions from equity trading fell 47.2 percent to 203 billion won from 384.4 billion won. Financial product fees dropped 53.9 percent to 26.5 billion won from 57.4 billion won, while investment banking fees slipped 19.6 percent to 24.8 billion won from 30.8 billion won.

Proprietary trading profit swung to a loss of 56.5 billion won from a gain of 73 billion won in the prior quarter. Net interest income also fell 15.1 percent to 145.7 billion won from 171.6 billion won. Operating expenses declined 30.7 percent to 284.4 billion won from 410.6 billion won.

However, the nine-month cumulative net profit reached 642.9 billion won, up 78.9 percent from 359.4 billion won in the same period a year earlier. Cumulative operating profit rose 79.8 percent to 831.7 billion won from 462.6 billion won, while cumulative operating revenue climbed 45 percent to 1.84 trillion won from 1.27 trillion won.

Shinhan Securities had earlier recorded a first-half net profit of 577.7 billion won, up 123.1 percent year-on-year. In the first quarter, the firm posted net profit of 288.4 billion won, driven by broad-based growth across its wealth management, corporate and investment banking, and sales and trading divisions. It followed that with net profit of 289.3 billion won in the second quarter.

"In the third quarter, operating revenue contracted due to a decline in brokerage commissions from slower equity trading volume and a drop in proprietary trading income from rising interest rates," a Shinhan Financial official said. "On a nine-month cumulative basis, however, fee income expanded significantly, led by higher brokerage commissions as capital markets became more active."


hajun825@heraldcorp.com