Mirae Asset becomes first Korean brokerage to post over 1 trillion won in quarterly profit

Mirae Asset Securities said Tuesday that its consolidated net profit for the first quarter had reached 1.0019 trillion won, up 288 percent from a year earlier, making it the first brokerage house in Korea to post a quarterly net profit exceeding 1 trillion won ($720 million).

The company’s operating profit nearly quadrupled to 1.375 trillion won, rising 297 percent on-year.

The brokerage’s earnings also exceeded those reported by some financial groups, including NH NongHyup Financial Group, which posted 868.8 billion won in quarterly net profit, and Woori Financial Group, at 603.8 billion won.

The milestone reflects a changing financial landscape in Korea, where banks have long dominated earnings and market capitalization rankings but are increasingly facing competition from securities firms benefiting from a retail investing boom and stronger capital market activity.

According to the Korea Exchange, Mirae Asset’s market value stood at 41.6 trillion won as of Monday’s close, surpassing both Hana Financial Group and Woori Financial Group to become the fourth-largest financial company in Korea by market capitalization.

The brokerage has also overtaken Nomura Holdings, the Japanese investment banking giant that Chairman Park Hyeon-joo reportedly viewed as a role model when Mirae acquired Daewoo Securities in 2016.  

As recently as the end of last year, Mirae Asset’s market capitalization was only about one-third that of Nomura.

The company attributed its earnings surge to a combination of rising commission income amid a buoyant stock market and gains from overseas investments in innovative companies, including SpaceX.

Commission income reached 459.4 billion won during the quarter, while returns from overseas investments totaled 804 billion won. A company official said additional valuation gains could materialize if SpaceX proceeds with an initial public offering later this year.

The performance comes amid an unprecedented boom in Korea’s securities industry, fueled by surging trading volumes and investor participation.

Daily stock trading value recently surpassed 100 trillion won for the first time, while investor deposits reached a record 136 trillion won as of May 7, according to industry data.

Retail-focused brokerages also posted sharp gains. Kiwoom Securities reported first-quarter net profit of 477.4 billion won, up 102.6 percent from a year earlier, while Samsung Securities saw earnings rise 81.5 percent to 450.9 billion won.

The shift is increasingly visible even within Korea’s four largest financial groups, where securities subsidiaries are now outpacing banks as engines of growth.

At KB Financial Group, overall net profit rose 11.5 percent in the first quarter, while the earnings of its brokerage arm, KB Securities, surged 93.3 percent. At Shinhan Financial Group, total profit rose 9 percent, but its brokerage unit, Shinhan Investment, posted a 167.4 percent jump.

Securities firms are also gaining prominence in Korea’s rapidly growing retirement pension market.

According to the Financial Supervisory Service’s integrated pension portal, retirement pension assets managed by securities firms rose by more than 10 trillion won in the first quarter to 141.7 trillion won, far outpacing banks, whose pension balances increased by just 3.6 trillion won during the same period.

In the individual retirement pension market, brokerages including Mirae Asset Securities, Samsung Securities and Korea Investment & Securities ranked among the country’s top providers, helped by customer demand shifting from deposits to investment products such as exchange-traded funds.

“Securities firms offer a wider variety of investment products, including ETFs, while customer demand is increasingly shifting from savings to investments,” an industry official said.

Brokerages are also pushing deeper into territory traditionally dominated by banks through instruments such as promissory notes and integrated investment management accounts, or IMAs. Funding raised through those products at seven securities firms reached 57.2 trillion won as of the end of April, with promissory note issuance more than tripling over the past five years.

Yet analysts caution that Korea’s securities firms still have a long way to go before they can rival global investment banks.

The government has encouraged brokerages to channel funds raised through promissory notes and IMAs into venture capital and innovative industries, while repeatedly pointing to the limited global competitiveness of Korean investment banking.

Large securities firms, including Mirae Asset and Korea Investment & Securities, have pledged to supply 15.2 trillion won in risk capital over the next three years.

“Strong markets have boosted both brokerage commissions and investment banking revenue, but both remain highly vulnerable to market volatility,” said Lee Seok-hoon, a senior research fellow at the Korea Capital Market Institute. “Just as global investment banks strengthened wealth management after the financial crisis to build stable fee-based income, Korean brokerages also need to diversify their revenue sources through asset management and M&A advisory.”

Kim Ye-il, a senior researcher at Korea Ratings, warned that Korean brokerages’ capital adequacy remains relatively weak compared to global peers.

“When converted to global standards, domestic investment banks’ capital soundness remains lower than that of major global firms and is deteriorating more quickly,” Kim said. “As expanded use of promissory notes and IMAs coincides with growing shareholder returns, capital management will become increasingly important.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY PARK YU-MI [lee.junhyuk@joongang.co.kr]