Korean securities firms lag behind in efficiency, productivity

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By Kim Bo-eun

Securities firms here are lagging far behind their foreign counterparts in operational efficiency and productivity, according to data from the Financial Supervisory Service.

The average operating margin of 44 local securities firms stood at 6.2 percent in 2018, well below the 48.4 percent of foreign securities firms' 11 branches operating here, it said

Operating margin measures how much profit a company makes on sales after paying for costs such as wages and raw materials, but before paying interest or tax. It is calculated by dividing a company's operating income by its net sales.

UBS had the highest operating margin at 62.2 percent, followed by Credit Suisse at 60.8 percent, Societe Generale at 58.1 percent, Goldman Sachs at 52.1 percent, JP Morgan at 50.8 percent and Merrill Lynch at 49.2 percent.

Among domestic firms, Samsung Securities' operating margin came to 9.2 percent, followed by Korea Investment and Securities at 8.6 percent, NH Investment and Securities, Mirae Asset Daewoo at 4.8 percent and KB Securities at 4.4 percent.

Foreign securities firms' employees also showed a significantly higher productivity, with their operating income per employee reaching 790 million won, 5.6 times that of domestic securities firms.

Foreign securities firms had a total of 665 employees as of the end of 2018. Domestic securities firms had 35,635.