Brokerages cut corners, losses abroadKorean securities firms saw losses at their foreign operations narrow sharply in the first half of fiscal 2012 from a year earlier as they ramped up cost-cutting efforts to weather the persisting global downturn, the financial regulator said yesterday.
The combined net loss of 92 foreign units owned by 19 local brokerage houses reached $2.8 million in the March-September period, compared with a $40.9 million net loss the previous year, according to the Financial Supervisory Service (FSS). The firms close their books on March 31.
The decline in their net losses came as brokerage firms adopted rigorous belt-tightening measures to slash operating costs, including staff cut-downs, the FSS said.
The total number of employees hired by local securities firms working in Hong Kong, where many of the foreign units are located, fell to 170 from 204 over the cited period.
Increased profits from bond business due to lower yields also contributed to narrowing the losses, the FSS added. In a bid to boost growth, the Bank of Korea cut the key rate twice in the second half of 2012, by a quarter percentage point to 2.75 percent, in July and October, respectively.
The 15 units based in Hong Kong made a turnaround, logging a combined net profit of $8.4 million in the first half, from $27.4 million in net losses a year ago.
Those in China, the second-biggest market, continued their lackluster performances with a combined net loss of $200,000, the FSS said.
As of the end of September, 19 local securities firms - including top players Samsung Securities - operated 61 local subsidiaries, three branches and 29 representative offices in 14 countries. Yonhap