NH gains most in Korea’s first-half IB league; Meritz emerges as fast-rising challenger

South Korea’s investment banking hierarchy is in flux after the country’s leading brokerages reported sharply divergent earnings performance in the first half.

According to earnings results released on Tuesday, NH Investment & Securities Co. posted the strongest gains among the six major players, with its investment banking (IB) net operating income climbing 38.3% to 237.8 billion won ($171 million) in the first half from a year earlier.

NH Investment has delivered seven consecutive quarters of IB earnings growth since the fourth quarter of 2023, driven by an aggressive push into takeover finance and tender offer advisory services.

Market analysts credited chief executive Yoon Byung-un, a career investment banker who took the helm last year, with reviving the brokerage’s IB firepower.

Among its major feats, NH provided counseling to the alliance of MBK Partners and Young Poong Corp.’s launch of a public offering for Korea Zinc Inc.

MERITZ: RISING STAR

Meritz Securities cemented its reputation as a fast-rising challenger.

Its first-half IB net operating income leaped 13.3% to 210.2 billion won from the year-earlier period, bringing it close to overtaking traditional leaders Korea Investment & Securities Co. and KB Securities Co.

Having declared 2025 its “year one” for building a full-service investment bank, Meritz has loaded up on IB experts while bringing in former NH Investment CEO Jeong Young-chae as a senior adviser.

In addition to its roots in structured finance, Meritz plans to expand into the equity capital market (ECM) and the debt capital market (DCM).

Recently, Meritz beat US private equity firm KKR & Co. Inc. to become the preferred bidder for SK Innovation Co.’s LNG asset securitization.

KOREA INVESTMENT & SECURITIES: MOST PROFITABLE

Data showed the established giants, such as Korea Investment & Securities, remain high in the earnings rankings.

Korea Investment — the sector’s most profitable — generated 396.6 billion won in IB net operating income in the first half, up 19.3% from a year earlier.

The brokerage shifted resources away from low-margin IPO underwriting to client coverage and advisory, generating 287.1 billion won in fee income excluding interest.

KB Securities, meanwhile, reported a 24.3% on-year rise in gross operating income to 256.6 billion won, buoyed by its lead role in LG CNS Co.’s blockbuster listing in the first half and a string of M&A advisory mandates.

KB remains the only domestic house competing head-to-head with global banks in Korea’s financial advisory market, according to industry executives.

SAMSUNG, MIRAE WEAK IN IB BUSINESS

By contrast, Samsung Securities Co. and Mirae Asset Securities Co. reported weakening performance in the first half.

Samsung’s IB net operating income dropped nearly 19% to 141 billion won, reflecting the limits of a conservative corporate culture at Samsung and the difficulty of winning mandates from Samsung Group’s rival companies.

Mirae Asset’s first-half IB net profit fell 5% to 83.8 billion won, as the firm deliberately scaled back investment banking to concentrate on wealth management after overseas deal mishaps heightened risk concerns, sources said.

Mirae remained relatively weak in IPOs and rights offerings undertaken by big conglomerates such as SK Group and Hanwha Group.

“While Mirae is deliberately stepping back, Meritz is doubling down on traditional IB. Such a move is reshaping the competitive landscape,” said a Seoul-based investment banker. “The key question for the second half is whether Korea Investment and KB can fend off Meritz’s advance.”

Write to Jong-Kwan Park at pjk@hankyung.com
In-Soo Nam edited this article.