Brokerages bulk up on strong earnings, face test over capital efficiency
Korean brokerages are rapidly expanding their capital bases on the back of a robust stock market rally, though the rapid scale-up is fueling concerns over declining profitability and greater exposure to volatile markets, industry officials said Thursday. Korea Investment & Securities saw its equity capital jump 18.2 percent to 13.19 trillion won ($9.46 billion) in June, up from 11.16 trillion won…
Korean brokerages are rapidly expanding their capital bases, buoyed by a strong stock market rally. The growth is raising concerns about declining profitability and increased vulnerability to volatile markets, according to industry officials. Korea Investment & Securities saw its equity capital rise 18.2 percent to 13.19 trillion won ($9.46 billion) in June, compared to 11.16 trillion won in December.
Medium-sized firms also experienced significant growth. KB Securities led the expansion with a 19.2 percent increase, from 6.69 trillion won to 7.98 trillion won. Other top brokerages, including Kiwoom, Meritz, Hana, and Samsung, reported solid gains. The capital increase is driven by the brokering industry's diversification into investment banking, wealth management, and trading services, alongside a broader rally in the KOSPI index.
However, the rapid scale-up of operations is causing apprehension over the potential impact on profitability and market exposure.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
