Woori Investment Securities posts 47% jump in net profit as non-interest income doubles

Woori Investment Securities continued to expand on the strength of investment banking fee income, with non-interest revenue now accounting for more than half of its earnings. The firm raised 1 trillion won ($681 million) through a rights offering in May, bolstering its equity base while accelerating a diversification of its revenue mix.

Woori Investment Securities reported net profit for the period of 24.7 billion won for the first half of this year, up 47.1 percent from the same period last year, the company said Friday. Operating profit jumped 93.3 percent to 29.4 billion won, while net operating revenue rose 58.7 percent to 146.2 billion won.

Non-interest income drove the first-half results. Net interest income grew 17.0 percent year-on-year to 62.3 billion won, while non-interest income more than doubled, surging 110.0 percent to 83.9 billion won. As a result, non-interest income's share of net operating revenue climbed from 43 percent in the first half of last year to 58 percent this year.

Fee income — including from IB activities — jumped 206 percent year-on-year to 49.1 billion won. Fee income's share of non-interest income also expanded, rising from 40 percent to 58 percent over the same period. The company said the capital raise had led to a meaningful increase in large-deal mandates, which in turn drove the surge in fee revenue.

Costs also rose. Selling and administrative expenses climbed 46.8 percent year-on-year to 90.9 billion won in the first half, reflecting investment in a proprietary trading system and the hiring of securities specialists. Credit loss provisions increased 62.5 percent to 25.9 billion won, driven by asset growth from business expansion and additional reserves set aside as a preemptive risk management measure.

Woori Investment Securities posted net profit for the period of 14 billion won in the first quarter of this year, a 13-fold increase from the same period last year. Operating profit of 16.6 billion won in that quarter alone surpassed the company's full-year operating profit for last year. The firm then completed the 1 trillion won rights offering in May to strengthen its equity base. Building on that capital, the company plans to expand its managed assets and product portfolio, enhance its capacity to execute large-scale deals, and accelerate its push to qualify as a comprehensive financial investment business operator.

"Following the capital raise, fee income from IB and other businesses has grown significantly, and the transition to a non-interest-centered revenue model is proceeding smoothly," a company official said. "We will continue to strengthen our core earnings base while investing in essential infrastructure and proactive asset quality management."