Operating profit reaches 53.7 billion won, up 37% on-year

Underwriting turns profitable as ECM, DCM businesses expand

Yuanta Securities Korea headquarters [Yuanta Securities Korea]
Yuanta Securities Korea headquarters [Yuanta Securities Korea]

Yuanta Securities Korea posted a 46.5 percent increase in net profit in the third quarter of this year, driven by strong financial product sales and improved performance in its underwriting business.

Financial product revenue hit a record high on a quarterly basis, and the underwriting segment swung to a profit, together powering the earnings growth. Brokerage and asset management divisions lagged due to lower stock market trading volume and heightened volatility, but growth in the wealth management segment helped offset those headwinds.

According to DART, Yuanta Securities Korea's consolidated net profit for the period in the third quarter came to 43.6 billion won ($32.6 million), up 46.5 percent from the same period last year. Operating profit rose about 37 percent year-on-year to 53.7 billion won.

The underwriting division generated 3.4 billion won in revenue, swinging to a profit from a loss in the same period last year. The turnaround came as the company expanded its equity capital market operations — including acting as lead manager for rights offerings and handling mezzanine issuances — while also diversifying its debt capital market business through traditional bond underwriting and structured financial products.

Brokerage revenue fell to 109.1 billion won from 195.1 billion won the previous quarter, weighed down by a decline in stock market trading volume. The asset management division also slipped about 25 percent from a year earlier to 27.8 billion won, hurt by a stock market correction and rising interest rates.

"Even in an unfavorable market environment, the financial products segment set a quarterly record and underwriting turned profitable, reflecting solid performance across key business lines," a Yuanta Securities Korea official said. "Building a track record in rights offering lead management and mezzanine issuance within ECM has driven revenue growth." The official added that the company had also expanded its traditional bond underwriting and structured finance product lineup in the debt capital market, broadening its revenue base and returning to profitability compared with the same period last year.

Yuanta Securities Korea recently launched a wealth succession trust service called "Gaon," which provides one-stop support covering asset management during a customer's lifetime through to tailored estate transfer after death. The service manages and operates assets entrusted by customers according to their wishes through a trust agreement while they are alive, then transfers the assets safely to family members at a time and in a manner designated by the customer — a specialized offering covering both inheritance and gift-related needs.


th5@heraldcorp.com