The stock market boom, once thought to be a feast only for large brokerages, has also led to strong performance among mid-sized firms. Yuanta Securities saw its first-half net profit surge by nearly 300% compared to the same period last year, while DB Securities recorded its consolidated equity surpassing 1 trillion won for the first time in history. However, the performance gap with large brokerages holding comprehensive financial investment company (CFIC) licenses remains unbridged.
According to the financial investment industry on the 17th, mid-sized brokerages posted significant year-on-year growth in net profit. Yuanta Securities reported a first-half consolidated net profit of 129.8 billion won, nearly a 300% increase from the previous year. During the same period, SK Securities saw its net profit rise by 267% to 56.9 billion won, while Eugene Investment & Securities recorded a 200% increase to 120.2 billion won.
DB Securities broke through 1 trillion won in equity for the first time in history, building on its improved first-half performance. Its standalone equity reached 1.1567 trillion won. Net profit rose 49% to 70.8 billion won.
Mid-sized firms with equity in the 2nd trillion won range also made significant strides. Kyobo Securities posted a net profit of 158.5 billion won, up 49% from last year. Woori Investment & Securities, which recently expanded its equity to over 2 trillion won through a 1 trillion won rights offering (paid-in capital increase), recorded a 47% rise in net profit to 25 billion won.
Most brokerages reported strong performance due to improvements driven by the revitalization of the domestic stock market. It is assessed that the activation of trading in both domestic and international markets boosted performance in areas such as wealth management (WM) and equity operations.
Yuanta Securities achieved its highest-ever semi-annual results in entrusted business and financial products. Entrusted business revenue surged 266% year-on-year, driven by increased market transaction volumes and a favorable stock market environment, which translated into profits for both retail and wholesale business segments. Profit and loss from the financial products segment also rose by 232%.
SK Securities reported an operating profit of 51.3 billion won in the first half, nearly ten times higher than the 5.2 billion won recorded last year. This was largely due to a 84% increase in net fee and commission income to 145.8 billion won. A sharp rise in stock transaction volumes led to a surge in brokerage commission profits.
However, compared to large brokerages posting trillion-won net profits, the gap continues to widen. The first-half net profits of the top five large firms were: △Mirae Asset Securities 2.9702 trillion won (338% year-on-year increase) △Korea Investment & Securities 1.7311 trillion won (69%) △Kiwoom Securities 1.158 trillion won (112%) △NH Investment & Securities 965.1 billion won (108%) △Samsung Securities 939.1 billion won (94%). The combined net profit of these five brokerages reached 7.7635 trillion won.
Large brokerages are expanding their businesses by raising additional funds equivalent to 200–300% of their equity, based on licenses such as comprehensive financial investment company (CFIC). They also hold strong positions in retail operations due to their brand recognition. An industry official stated, "Although mid-sized firms have improved their performance, the gap will inevitably widen given that large brokerages are posting trillion-won net profits."
Mid-sized brokerages argue that while they can utilize SME-specialized brokerage status, the benefits are limited and returns are low, reducing its appeal. Since large firms have already entered the venture capital supply market as CFICs, it is difficult for SME-specialized brokerages to offer significant differentiation in supporting funding for small and medium enterprises and venture companies. Although financial authorities recently strengthened incentives for SME-specialized brokerages, mid-sized firms showed little interest.
Consequently, some mid-sized brokerages are pursuing CFIC certification as a strategy to leap into the large-firm tier. Kyobo Securities conducted two rights offerings (paid-in capital increases) totaling 450 billion won in 2020 and 2023 to build equity exceeding 4 trillion won for CFIC entry. Woori Investment & Securities also formalized its challenge to obtain CFIC certification with over 4 trillion won in equity by conducting a 1 trillion won rights offering (paid-in capital increase) last April.
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