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 brokerage firms are rapidly expanding their capital bases in response to a strong stock market rally, according to industry officials speaking Thursday. The surge in capital has been fueled by robust earnings and proactive capital raises to support new ventures, but it has raised concerns about declining profitability and increased exposure to volatile markets.
Korea Investment & Securities reported an 18.2% increase in equity capital, reaching 13.19 trillion won ($9.46 billion) in June, up from 11.16 trillion won in December. This growth was driven by strong earnings and capital raises aimed at funding expansion. Medium-sized firms also experienced significant growth, with KB Securities leading the pack with a 19.2% increase in equity capital from 6.69 trillion won to 7.98 trillion won, the highest among the top eight brokerages.
Other major players, including Kiwoom, Meritz, Hana, and Samsung, also reported solid gains in their equity capital. The capital expansion is supported by the broader rally in the benchmark KOSPI and the firms' diversification of revenue streams beyond retail stock trading. Ahn Young-joon, an industry official, noted that brokerage earnings have recently improved due to growth in investment banking, wealth management, and trading services.
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.
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