Foreign brokerage houses operating in Korea have outperformed domestic companies in terms of profitability measured by return on equity (ROE), according to the Financial Supervisory Service.
Its data indicated that of 54 securities firms, the top three that recorded the highest ROE at the end of last year were foreign entities ― UBS, Goldman Sachs and Morgan Stanley.
UBS, the Switzerland-headquartered investment bank, had a ROE of 68.5 percent in Korea, followed by Goldman Sachs at 56.8 percent and Morgan Stanley 51.2 percent.
Each ROE of the investment banks ranked was higher than the average 19 percent from 54 companies. Of 14 foreign companies, Barclays Capital was the only firm whose ROE was in negative territory by 11 percent.
Of 40 domestic brokerages, small- and medium-sized firms with equity capital of less than 300 billion won achieved higher ROE than large companies such as Daewoo Securities, Mirae Asset Securities and Samsung Securities.
Leading Investment & Securities, a small brokerage, had the biggest ROE (50.9 percent), making it the fourth largest after the big three foreign companies. CJ Investment & Securities ranked fifth with ROE of 49 percent. Of the top 10, other domestic companies included Hana Daetoo Securities and Kiwoom Securities, the country's leading online brokerage.
Although foreign companies operating in the country have less capital than their domestic peers, Societe Generale, BNP Paribas and Prudential Investment & Securities have performed much better than Korean big leaguers such as Mirae Asset, Daewoo and Woori Investment & Securities.
With equity capital over 1 trillion won, Mirae Asset recorded a ROE of 28.3 percent, with Samsung at 17.4 percent, Daewoo at 15.7 percent and Woori Investment 14.3 percent.
phk@koreatimes.co.kr