Brokerages’ profit increases on client activitySecurities companies operating in Korea improved their earnings in the second quarter, bolstered by growing equity transactions.
The Financial Supervisory Service said on Monday that 54 local and foreign brokerage firms posted 621.4 billion won ($553.4 million) in profit between April and June, up 1.5 percent from the previous quarter.
The average operating profit was 2.67 trillion won, up 3.3 percent
The profit associated with commission fees rose 13.5 percent to 1.99 trillion won, which the financial watchdog said contributed to the upturn.
“The BOK’s interest rate cut and Britain’s decision to leave the European Union translated into the increase of market volatility in the second quarter,” the FSS said. “That led into the increased investment on stock markets. Firms also saw more requests for financial advice and handling of mergers and acquisitions.”
The companies still suffered losses in equity and derivative investments.
Equity-related losses were 115.9 billion won, up 177.6 percent from the previous quarter while losses linked to derivatives rose 5.1 percent to 872.6 billion won.
Combined assets of securities firms are worth 394.6 trillion won, rising by 4.4 trillion won. Total capital held by the 54 companies hit 46.1 trillion won, up 1.8 percent.
Debt also rose. Securities firms were saddled with 348.5 trillion won in debt, which rose 1 percent quarter on quarter.
BY PARK EUN-JEE [firstname.lastname@example.org]
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