Samsung Securities surpassed its own first-quarter record to post record-high earnings for two consecutive quarters. The brokerage translated a buoyant stock market into growth across its wealth management (WM) and investment banking (IB) divisions, while retail customer assets broke through 650 trillion won ($455 billion), further strengthening its earnings base.
Samsung Securities disclosed Tuesday that its consolidated second-quarter operating profit reached 675.8 billion won, up 119.0 percent from the same period last year and 10.9 percent quarter-on-quarter. Net profit for the period came in at 488.2 billion won, rising 108.1 percent year-on-year and 8.3 percent quarter-on-quarter. Both figures surpassed the records set in the first quarter. Cumulative first-half operating profit stood at 1.29 trillion won, with net profit for the period at 939.1 billion won. The annualized return on equity reached 22.2 percent.
The earnings improvement was driven by strong brokerage commissions on higher stock-market trading volumes, alongside continued WM growth. Second-quarter net brokerage commissions reached 439.8 billion won, up 171.2 percent year-on-year and 25.9 percent quarter-on-quarter. Revenue from financial product sales rose to 115.4 billion won, gaining 224.9 percent and 36.3 percent respectively, while trading and investment gains came in at 385.9 billion won, up 41.8 percent year-on-year and 12.6 percent quarter-on-quarter.
Customer base expansion was particularly notable. Retail customer assets grew to 652.4 trillion won, up 83.2 percent year-on-year and 31.6 percent quarter-on-quarter, while the number of high-net-worth customers rose to 572,000, up 87.5 percent and 27.5 percent respectively. Net wrap-account fees surged to 49.5 billion won, up 501.5 percent year-on-year and 52.1 percent quarter-on-quarter, and retirement pension assets under custody expanded to 28.1 trillion won, up 20.7 percent quarter-on-quarter. The WM division's growth reflected the broader retail customer base and rising financial product sales.
The IB division also maintained its growth trajectory, led by structured finance. Underwriting and advisory fees reached 90.6 billion won, up 23.5 percent year-on-year and 26.1 percent quarter-on-quarter. Structured finance revenue came in at 79.4 billion won, with the successful completion of key deals — including the initial public offerings of Chaebi and Justek and acquisition financing for Hugel — contributing to the earnings improvement.
Beyond the strong results, the market is also eyeing a short-term bond issuance license as a future growth catalyst for Samsung Securities. With a formal institutional warning recently confirmed, the approval process for the license — delayed since last year — is expected to regain momentum. If granted, Samsung Securities would become the fifth firm licensed to issue short-term bonds, joining Mirae Asset Securities, Korea Investment & Securities, NH Investment and KB Securities.
Samsung Securities was designated a mega-IB with equity capital exceeding 4 trillion won in 2017, but legal risks surrounding its largest shareholder and prolonged regulatory proceedings kept it out of the short-term bond business. Industry observers say that if the license is approved, the firm would in effect complete its mega-IB business portfolio after nine years. Samsung Securities has built its competitive edge on retail and WM strengths; securing a stable funding base through the license is expected to further sharpen its corporate finance capabilities.
kacew@heraldcorp.com
