Five major brokerages posted more than 58 trillion won in operating profit in the second quarter this year, helped by a sharp rise in trading value on South Korea's stock market. Brokerage businesses lifted results across the board. Mirae Asset Securities stood out on valuation gains on investment assets, Korea Investment & Securities on a more diversified business portfolio, and Samsung Securities in wealth management (WM).

The combined consolidated operating profit of Mirae Asset Securities, Korea Investment & Securities, Kiwoom Securities, NH Investment & Securities and Samsung Securities was tallied at 58.5 trillion won in the second quarter, with net profit at 45.1 trillion won, according to the financial investment industry on Tuesday. All five set new quarterly records.

The common driver behind the improvement was a rise in trading value. Average daily trading value of domestic stocks in the second quarter rose 39.8 percent from the previous quarter to 118.1 trillion won, including exchange-traded funds (ETFs). As gains in the stock market and heightened volatility appeared at the same time, commissions from domestic and overseas stock brokerage rose sharply.

Mirae Asset Securities posted the biggest profit. It recorded second-quarter operating profit of 24.9 trillion won and net profit of 19.1 trillion won. That was up 397.5 percent and 369.4 percent, respectively, from a year earlier. It became the first in the securities industry to post net profit of more than 10 trillion won for two consecutive quarters.

Brokerage fee revenue rose 36 percent from the previous quarter to 625.6 billion won, and fee revenue from sales of financial products hit a record 131.0 billion won. Client assets exceeded 7,840 trillion won and pension assets topped 800 trillion won.

Pre-tax profit at overseas units was 609.1 billion won, accounting for 24 percent of total consolidated pre-tax profit. Trading and other financial gains rose 107 percent from the previous quarter to 836.9 billion won.

That reflected valuation gains on investment assets including SpaceX. The valuation of Mirae Asset Securities' stake in SpaceX held as of the end of the second quarter was about 5 trillion won on a consolidated basis.

Korea Investment & Securities posted operating profit of 12.1 trillion won and net profit of 9.5 trillion won. That was up 92.4 percent and 64.0 percent, respectively, from a year earlier. It topped 10 trillion won in operating profit for a second straight quarter after the first quarter.

Korea Investment & Securities' revenue mix in the first half was spread across brokerage at 41.2 percent, asset management at 27.0 percent, investment banking (IB) at 16.0 percent and WM at 15.8 percent. Brokerage fee revenue rose 44.2 percent from the previous quarter, while WM fee revenue jumped 106.8 percent on strong sales of commercial paper, integrated managed accounts (IMA) and beneficiary certificates.

Kiwoom Securities posted operating profit of 789.0 billion won and net profit of 680.6 billion won, up 93.2 percent and 119.4 percent, respectively, from a year earlier. Fee revenue from domestic and overseas stock commissions rose 178.3 percent to 451.9 billion won. Its average daily stock trading value climbed 236.1 percent to 36.3 trillion won.

Kiwoom Securities also delivered results outside brokerage. On a standalone basis, IB fee revenue rose 56.3 percent from the previous quarter to 83.3 billion won, and investment gains increased 60.1 percent to 249.2 billion won. Principal investment (PI), ETF liquidity provider (LP) operations and swap businesses supported performance in the asset management segment.

NH Investment & Securities posted operating profit of 681.2 billion won and net profit of 489.4 billion won. That was up 111.6 percent and 90.5 percent, respectively, from a year earlier.

Its brokerage fee balance was tallied at 445.6 billion won, with domestic stock commission revenue at 390.9 billion won. Fee revenue from sales of financial products was 76.8 billion won, IB fee revenue was 108.3 billion won, and investment gains and related net interest income were 407.3 billion won.

Samsung Securities posted operating profit of 675.8 billion won and net profit of 488.2 billion won, up 119.0 percent and 108.1 percent, respectively, from a year earlier. Pure brokerage commissions rose 171.2 percent to 439.8 billion won, while revenue from financial product sales jumped 224.9 percent to 115.4 billion won. Investment gains also rose 41.8 percent to 385.9 billion won.

Its WM client base also continued to expand. Clients with assets of at least 3 billion won totaled 10,010 as of the end of June, and their assets were tallied at 237 trillion won. IB revenue rose 26.1 percent from the previous quarter to 90.6 billion won, led by 79.4 billion won in structured finance revenue.

It is uncertain whether such profit growth will continue in the third quarter. Average daily trading value on the KOSPI from Aug. 3 to 7 fell to 26.3 trillion won, the lowest level this year.

Woo Do-hyung (우도형), an analyst at Yuanta Securities, said, "Considering the decline in trading value, brokerages' performance appears to have peaked in the second quarter," and analysed that brokerage revenue in the second half could fall from the first half.