Securities firms in South Korea saw their earnings for the first year 2011 drop 19.2 percent from a year earlier due to stock-related loss and reduction in commission profits, the financial watchdog said Wednesday.
The combined net profit of 62 local and foreign securities firms operating in South Korea came in at 2.27 trillion won (1.99 billion U.S. dollars) in the fiscal year ending March 30, down 19. 2 percent from a year before, according to the Financial Supervisory Service.
The contraction came as stock-related profit swung to the red, which reached a net loss of 293.2 billion won last year, a turnaround from a net profit of 742.1 billion won the previous year.
The local stock market saw its volatility heightened last year due to external uncertainties such as Europe’s debt crisis and the downgrade of the U.S. sovereign credit rating.
Commission-related profits declined 3.5 percent on-year to 7. 93 trillion won in the fiscal year as a growth in trust commission profits was offset by a drop in commission profits coming from securities sales and brokerage services.
Korea Investment & Securities was the best performer with its net profit reaching 220 billion won last year.
Daewoo Securities came next with 172.7 billion won, and Woori Investment & Securities trailed it with 168 billion won.
Total assets held by the brokerages expanded 18.9 percent on- year to 237.6 trillion won as of the end of March, with total debts growing 20.5 percent to 195.5 trillion won.