Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
Brokerages' overseas earnings hit by COVID-19
By Kim Bo-eun
By Kim Bo-eun
Korea's major securities firms saw earnings from overseas subsidiaries switch to a deficit in the first quarter of this year amid global market volatilities triggered by COVID-19.
Korea Investment & Securities saw its overseas income plunge to a net loss of 55.64 billion won, from a net profit of 34.71 billion won a year earlier.
The brokerage's Hong Kong subsidiary, in particular, saw the largest drop in earnings, posting a net loss of 17.67 billion won, a deterioration from the previous year's 13.41 billion won net loss.
"Companies having portfolios with greater weightings on stocks suffered larger losses as major stock markets took a dive in March, due to the COVID-19 pandemic," a Korea Investment official said.
NH Investment & Securities also saw overseas subsidiaries post a net loss of 8.04 billion won in the first quarter, down from 12.42 billion won in the same period last year.
NH's subsidiary in Hong Kong posted a net loss of 3.8 billion won, compared to a net profit of 26.68 billion in the first quarter of 2019.
“Subsidiaries that mostly handle brokerage businesses have been less afflicted, but the subsidiary in Hong Kong which functions as an investment bank has taken the brunt,” an NH official said.
The sluggish market for investment banking deals also brought down revenues.
KB Securities' overseas subsidiaries posted a net loss of 5.52 billion won in the first quarter, a setback from a net profit of 10.55 billion won from the same quarter last year.
Mirae Asset Daewoo and Samsung Securities managed to post surpluses in overseas earnings in the first quarter.
Mirae Asset Daewoo posted a net profit of 44.2 billion won in the first quarter, which was a rare year-on-year growth in the period from 42.8 billion won in the first quarter of last year.
Samsung's net profit came to 107.03 million won in the first quarter, down 96.9 percent from 3.39 billion won reported in the first quarter of 2019.
“Different compositions of assets have resulted in differing earnings,” an official of a brokerage said. “We expect to be able to see earnings pick up in the second quarter.”
Securities firms suffered shocks in overall earnings in the first quarter due to the coronavirus pandemic. The top 10 saw an 88 percent plunge in net profit year-on-year.