[DigitalToday reporter Oh Sang-yup (오상엽)] South Korean brokerages posted more than 5 trillion won in net profit in the second quarter, helped by a booming stock market this year. Brokerage income jumped on higher stock trading value. Wealth management, investment banking (IB) and proprietary trading also supported improved results.

According to "Securities and futures firms' business performance in the second quarter of 2026" released by the Financial Supervisory Service on Wednesday, net profit at 61 domestic brokerages in the second quarter was 5.19 trillion won. That was up 864.6 billion won, or 20.0 percent, from 4.33 trillion won in the previous quarter. It rose 2.34 trillion won, or 82.1 percent, from 2.85 trillion won a year earlier.

Higher fee income from more active stock trading drove the results. Brokerages' fee income in the second quarter was 8.87 trillion won, up 2.17 trillion won, or 32.5 percent, from the previous quarter.

Of that, brokerage commissions were 5.77 trillion won, up 34.0 percent from 4.31 trillion won in the previous quarter. Over the same period, the value of stock trading on the Korea Exchange (KRX) and alternative trading systems (ATS) combined rose 59.9 percent to 4,438 trillion won from 2,775 trillion won. Brokerage commissions jumped 203.1 percent from a year earlier.

The IB segment also showed growth. IB fee income in the second quarter came to 1.2 trillion won, helped by an increase in fees related to debt guarantees. That was up 27.5 percent from 941.5 billion won in the previous quarter.

The increase was larger in wealth management. Wealth management fees rose 56.7 percent to 1.05 trillion won from 672.1 billion won in the previous quarter on higher discretionary investment management fees. It was up 197.3 percent from a year earlier.

Proprietary trading results also improved. Brokerages' gains and losses from proprietary trading in the second quarter were 5.98 trillion won, up 1.88 trillion won, or 45.8 percent, from the previous quarter.

Gains and losses related to funds, including stocks and exchange-traded funds (ETF), increased sharply due to rising share prices. Gains and losses related to stocks were 30.33 trillion won, and those related to funds were 14.55 trillion won. By contrast, gains and losses related to derivatives posted a loss of 41.17 trillion won, due to hedging operations and other factors.

As profitability improved, return on equity (ROE) also rose. Brokerages' ROE in the second quarter was 4.9 percent, up 0.6 percentage points from 4.3 percent in the previous quarter. It was 1.8 percentage points higher than 3.1 percent a year earlier.

Brokerages' asset size also expanded. As of end-June, total assets at brokerages were 1,256.1 trillion won, up 157.7 trillion won, or 14.4 percent, from end-March. Cash and deposits rose 57.8 trillion won, and stock holdings increased 40.0 trillion won.

Over the same period, total liabilities rose 149.4 trillion won, or 15.1 percent, to 1,140.9 trillion won, and equity increased 8.2 trillion won, or 7.7 percent, to 115.1 trillion won. Credit provisions increased 4.5 trillion won, or 7.6 percent, to 63.9 trillion won from 59.4 trillion won.

Financial soundness indicators exceeded regulatory levels. As of end-June, the average net capital ratio at brokerages was 1,140.5 percent, up 140.1 percentage points from end-March, and all brokerages met the regulatory ratio of at least 100 percent.

The average leverage ratio was 723.4 percent, up 5.1 percentage points from end-March, but all brokerages stayed within the regulatory ceiling of 1,100 percent.

The FSS said, "In the second quarter, brokerages benefited from a favorable stock market environment, with proprietary trading gains and losses rising along with brokerage commissions, leading to improved results at both large and small-to-medium firms." It added, "In particular, large firms such as comprehensive financial investment business operators are seeing profits rise in other business segments including wealth management and IB, and the overall scale of profit is expanding."