Rise in retail investors pushes up Nonghyup net profit

NH Noghyup Bank in Yeoksam, southern Seoul. [YONHAP]

Nonghyup Financial Group saw its net profit increase in the third quarter, driven up by profit collected from retail investor brokerage fees paid to affiliate Nonghyup Securities.

The group’s accumulated net profit for the third quarter was 1.36 trillion won ($1.2 billion), up 4.8 percent on year.

Nonghyup Financial Group's profit could have been higher, but the company paid into a mandatory support fund to help the agriculture industry. Without that, net profit would have reached 1.69 trillion won, the company said Thursday.

Among its four affiliates, brokerage house NH Investment & Securities recorded the largest net profit, at 501.4 billion won, a 39.6 percent increase from the same period last year.

NH Investment & Securities' net profit for the third quarter alone was 239.6 billion won, the highest quarterly record ever for the brokerage firm. This was largely from a surge in brokerage fees. The accumulated third-quarter net profit from fees posted 731.5 billion won, up 63 percent from the same period last year.

“Our brokerage businesses led performance as customer deposits for stocks increased, as well as heightened interest in stock trades at international markets,” said NH Investment & Securities in an official statement Thursday.

NH Investment was one of the lead underwriters for some of Korea’s big name IPOs this year, including SK Biopharmaceuticals and Big Hit Entertainment. In the case of Big Hit Entertainment, some 58 trillion won was deposited for the IPO.

However, the accumulated net profit for Nonghyup Bank dropped 6.4 percent to 1.12 trillion won.

Nonghyup’s other affiliates all saw net profit increases for the July-September period. Nonghyup Life Insurance’s accumulated net profit increased by 160.3 percent to 64.3 billion won. The figure for Nonghyup Property & Casualty Insurance also increased by 1136.4 percent to 49.2 billion won.

Total assets owned by the group also increased by 11.2 percent from the end of December to 474.8 trillion won as more loans were borrowed and financial assets owned by the group increased.

NH Investment & Securities has been criticized for its part in the Optimus scandal that resulted in the freezing of some 90 billion won of investments. It was the largest seller of Optimus funds accounting for around 88 percent of funds sold.

BY KANG JAE-EUN [kang.jaeeun@joongang.co.kr]