In the second quarter of this year, the combined net profit of South Korea’s top 10 securities firms approached that of the top 10 banks, shaking the traditional profit structure of the financial sector. Buoyed by a stock market boom and capital market growth, some large brokerages set records by surpassing all five major commercial banks in quarterly net profit.
According to data compiled by the Korea Economic Daily on the second-quarter performance of the top 10 securities firms, the combined net profit of Mirae Asset Securities, Korea Investment & Securities, Kiwoom Securities, NH Investment & Securities, Samsung Securities, KB Securities, Shinhan Securities, Daishin Securities, Meritz Securities, and Hana Securities reached ₩5.94 trillion (approximately $4.2 billion). This figure represents 98.4% of the combined net profit of the top 10 banks—Shinhan, Kookmin, Hana, Woori, Industrial Bank of Korea, Nonghyup, KakaoBank, iM Bank, Busan Bank, and Kyongnam Bank—which totaled ₩6.03 trillion (approximately $4.3 billion).
While the banks’ combined profit grew by only 6.1% compared to the previous quarter, the securities firms’ profit surged by 37.0% over the same period, causing their profit ratio relative to banks to jump by more than 20 percentage points from 76.21%.
Mirae Asset Securities recorded a net profit of ₩1.91 trillion (approximately $1.3 billion) in the second quarter alone, surpassing major banks including Shinhan Bank (₩1.30 trillion), KB Kookmin Bank (₩1.12 trillion), and Hana Bank (₩1.02 trillion). Korea Investment & Securities (₩946.4 billion) exceeded Woori Bank (₩842.7 billion), while Kiwoom Securities (₩680.6 billion) also posted higher earnings than NH Nonghyup Bank (₩605.2 billion). Daishin Securities also delivered an earnings surprise, recording a net profit of ₩257.8 billion (approximately $181.9 million), up 77.1% from the previous quarter. This was driven by a 68.8% quarter-on-quarter increase in investment banking fee revenue, centered on real estate project financing, and stock price gains on securities holdings such as Samsung C&T.
The strong performance of securities firms affiliated with financial holding companies was also notable. The combined first-half net profit of the five major financial holding company-affiliated securities firms—NH Investment & Securities, KB Securities, Shinhan Securities, Hana Securities, and Woori Investment & Securities—amounted to approximately ₩2.64 trillion (approximately $1.9 billion), more than doubling from the same period last year. In particular, within NH Nonghyup Financial Group, NH Investment & Securities’ net profit (₩965.1 billion) reached 83% of NH Nonghyup Bank’s level (₩1.16 trillion). KB Securities posted a first-half net profit of ₩796.3 billion (approximately $562.0 million), a 135% increase year-on-year, while Shinhan Securities also grew 123% to ₩577.7 billion (approximately $407.7 million).
The expansion of securities firms’ profits is underpinned by the migration of funds into capital markets. The average daily trading value in the second quarter, including the Korea Exchange, Nextrade, and ETFs, reached ₩118.1 trillion (approximately $83.4 billion), a significant increase from the first quarter (₩84.8 trillion). This led to higher brokerage commissions and increased interest income from margin lending. Rising stock prices boosted customer assets, increasing fees from financial product sales and wealth management. The inflow of long-term assets such as retirement pensions and pension savings into securities firms also contributed to expanding their revenue base.
However, one-off factors also played a role in the securities firms’ performance. Mirae Asset Securities’ surpassing of all major banks in the second quarter is analyzed to have been decisively influenced by valuation gains on its stake in SpaceX. Daishin Securities’ performance was also partly lifted by stock price increases in its investment-purpose securities holdings.
A financial investment industry official said, “The signals that the profit landscape of the financial sector, which was once dominated by banks, is changing are becoming clearer,” adding, “It will be noteworthy to see how much further the status of the securities industry grows within South Korea’s bank-centric financial sector.”
Experts advise that this should be interpreted not as securities firms replacing banks, but rather as their growth into a second core profit pillar of the financial industry amid capital market expansion. They point out that while banks’ profits are relatively repeatable, based on lending and net interest margins, securities firms’ earnings are highly volatile depending on stock market conditions, trading volumes, interest rates, and valuation gains or losses on asset holdings, making it premature to discuss a structural reversal based on just one or two quarters of results.