Korean brokerages see overseas profits jump amid pandemic

The headquarters of various securities firms located on Yeouido, Seoul / gettyimagesbank

By Anna J. Park

Local securities firms saw their combined net profits increase by more than 60 percent in 2021 from a year earlier, despite the COVID-19 pandemic ravaging the world, data showed Sunday.

According to data released by the Financial Supervisory Service (FSS), 55 overseas subsidiaries run by 13 Korean brokerage companies logged annual net profits of $305.9 million (362.7 billion won) in 2021, which is a 62.3-percent jump from the previous year.

By country, the brokerage companies raked in net profits from seven countries, including Hong Kong, U.S., India, Thailand, Brazil, Vietnam and Indonesia, and their net profits were mainly attributed to the increases of underwriting and commission fees as well as interest earnings. But the firms suffered losses from operations in other countries, such as China, Singapore, Myanmar and Cambodia, due to pandemic-led business limitations and increases in other maintenance expenses.

“Despite the negative impacts from COVID-19, local brokerage companies' overseas operations posted a year-on-year increase of their net profits thanks to global preferences towards stock investments last year,” the FSS said in its analysis statement.

As of the end of 2021, 13 local brokerage firms run a total number of 69 overseas operations ― 55 overseas subsidiaries and 14 contact offices ― in 14 countries.

Out of the 69 operations, 52 are located in Asian countries, followed by 12 in the U.S., four in the U.K., and one in Brazil. Mirae Asset Securities has the largest number of overseas operations at 15, followed by Korea Investment's 11, NH Investment's 8 and Shinhan Financial Investment's 7.

“Mirae Asset Securities' overseas business earned a net pre-tax profit of over $193 million in year 2021. As Korea's representative brokerage house that boasts the largest overseas networks, the company has been extending stable and balanced global business, focusing on region-specific strategic plans,” an official from Mirae Asset Securities told The Korea Times. “The company will continue pursuing global business, leading the industry's innovation and change,” he added.

Compared to the previous year, the number of overseas operations by the local brokerage companies remained at a similar level; the same 13 companies run 56 overseas subsidiaries and 14 contact offices in 14 countries. Considering the similar number of offices, the significant year-on-year growth rate of net profits is even more impressive.