Kiwoom Securities posts W788.9b operating profit in Q2, beating consensus on trading surge

Kiwoom Securities posted stronger-than-expected second-quarter earnings, driven by a surge in domestic stock trading volume. Brokerage commission revenue rose sharply and investment management results also improved, pushing operating profit to nearly double the year-earlier level.

Kiwoom Securities said Thursday its consolidated operating profit for the second quarter reached 788.9 billion won ($544 million), up 93.2 percent from the same period last year. Net profit for the quarter climbed 119.4 percent to 680.6 billion won. The operating profit figure beat the market consensus of 684.5 billion won compiled by Yonhap Infomax by about 15 percent.

Brokerage was the key driver of the improvement. Domestic stock commission revenue totaled 451.9 billion won in the second quarter, up 178.3 percent from 162.4 billion won a year earlier. As overall market trading volume surged, Kiwoom's average daily trading value jumped 236.1 percent, from 10.8 trillion won to 36.3 trillion won.

The investment management division also contributed to the results. Combined gains from trading and dividend and distribution income reached 249.2 billion won, up 104.9 percent year on year. Assets under management rose 54.4 percent to 26.1 trillion won, reflecting both the expansion of customer assets amid a buoyant stock market and improved portfolio performance.

The investment banking division maintained relatively steady growth. IB fee revenue came in at 83.3 billion won in the second quarter, up 6.4 percent from a year earlier. The firm managed a rights offering for Innospace, underwrote corporate bond issuances for Lotte Chemical, HL Mando, Shinsegae, Korean Air, Hyundai Department Store and CJ Freshway, and arranged acquisition financing related to Sulbing, B&B Korea and Eurobake.

Kiwoom Securities launched in 2000 as South Korea's first fully online brokerage and has since built its growth on retail brokerage strength. It has held the top share of the domestic equity brokerage market by trading volume since 2005 and continues to lead the industry by that measure. Analysts in the financial investment sector regard its dominant online customer base as a key competitive advantage that translates directly into earnings gains when market trading activity expands.