Korean brokerages' foreign profits up on IB, bond trading

South Korean brokerage firms expanded their net profits from overseas operations last year, backed by increased gains from their investment banking and bond trading, according to Financial Supervisory Service (FSS) data on Thursday.  

The 14 domestic brokerage firms were operating 63 affiliates and 10 branches abroad as of the end of 2023. The offshore affiliates logged a combined $140.7 million in net profit last year, up 11% on-year, FSS said.

The brokerages achieved $183.5 million profit from 11 of the 15 markets in which they operate. Some 37.3% of the profit came from operations in Hong Kong; Vietnam accounted for 30.2%, followed by the US’ 22.2%. Brazil and China respectively made up 2.8%.

The 14 firms saw $42.8 million in losses from four countries. Some 72.2% of the deficit came from the UK, and 25.7% was from Thailand due to decreased profits in management fees and sluggish sales in the affiliates’ early stages.

The overseas affiliates’ total assets increased 36.5% on-year to $37.9 billion as of end-2023, driven by sales expansion in major markets such as the US. Overseas assets made up 11.3% of their assets home and abroad, the data showed.

The offshore affiliates’ equity rose 1.9% on-year to $7.7 billion as of the end of 2023. The equity accounted for 16.5% of their total equity at home and overseas.

Of the 73 offshore affiliates and branches, 74% were in Asia and 16.4% were in the US as of the end of 2023.

The Korean brokerages have continued their expansion in Southeast Asia, their No. 1 region focused on trading securities for local companies while seeking diversification by increasing affiliates in the US, the UK and Greece as well as new markets such as India.

FSS plans to mitigate the risks of their overseas operations by closely monitoring key factors such as profit and loss volatilities amid uncertainties around the Federal Reserve’s rate cuts and global geopolitical conflicts.

Write to Han-Gyeol Seon at always@hankyung.com


Jihyun Kim edited this article.