Meritz Securities posts 3Q net profit of W206.4b, up 3.2% on-year

Meritz Securities sustained year-on-year net profit growth in the third quarter, as strong performances in asset management and brokerage offset weakness in its investment banking and wealth management divisions.

According to the Financial Supervisory Service's DART system, Meritz Securities posted a consolidated net profit for the period of 206.4 billion won ($154 million) in the third quarter, up 3.2 percent from the same period last year.

Operating profit for the same period fell 44.7 percent to 140 billion won. Sales, however, jumped 137.7 percent on-year to 11.88 trillion won.

On a cumulative basis for the first three quarters of this year, the company recorded operating profit of 641.3 billion won and net profit of 720.5 billion won. Operating profit declined 8.6 percent from the same period last year, but net profit rose 12 percent, reflecting sustained profitability.

By business segment, asset management and brokerage stood out as the key growth drivers. Asset management revenue reached 215.5 billion won, up 93.7 percent on-year, as improved investment performance supported earnings even amid heightened market volatility.

Net interest income also rose 55 percent on-year, while brokerage revenue grew 88.5 percent. The gains in asset management and brokerage partially offset the drag from investment banking and wealth management.

Investment banking revenue fell 6.3 percent on-year to 121.1 billion won, while wealth management revenue contracted 32.6 percent to 39.8 billion won.

Meritz Securities said the decline in investment banking earnings was partly attributable to a high base effect from asset recoveries recorded in the same period last year.

In retail, the company said it is working to strengthen its competitive position by leveraging an expanded customer base and digital platform capabilities. Meritz Securities said it plans to build on its steady quarterly earnings to deepen synergies between its investment banking and asset management divisions.

"We will pursue qualitative growth in our retail business on the back of an expanded customer base and digital platform competitiveness, while enhancing synergies with our investment banking and asset management divisions to secure sustainable growth drivers," a Meritz Securities official said.

Meritz Securities is also accelerating new product launches. The company recently introduced short-term promissory note products backed by its own credit. The demand-type promissory note is available only to individual customers and carries an annual interest rate of 2.50 percent. The fixed-term promissory note offers individual customers annual rates of 2.80 to 4.00 percent and corporate customers rates of 2.70 to 4.00 percent, depending on the term. Both product types require a minimum subscription of 1 million won.