Korea’s smaller securities firms more productive than larger peers

2017.08.18 16:11:22 | 2017.08.18 16:11:52
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Large securities firms in South Korea took the dominant share of profits in the first half of the year but smaller players earned more per employee by targeting the niche market, data showed Friday.

According to regulatory filings submitted by 24 Korean brokerage houses, the top 10 firms accounted for 85.4 percent of combined operating profit of 2.3 trillion won in the January-June period. Korea Investment & Securities Co. took the lead with an operating profit of 358.8 billion won ($314.2 million), followed by Mirae Asset Daewoo Co. and NH Investment & Securities Co. at 318.3 billion won and 267 billion won, respectively.

But smaller firms proved more productive when measured by operating profit per employee. Kiwoom Securities Co.’s 592 workers generated the highest earnings per employee at 281.3 million won. The company outperformed its rivals by a wide margin, with No. 2 Meritz Securities Co. at 156.5 million won, Bookook Securities Co. at 155.4 million won and Yuhwa Securities Co. at 105.8 million won.

Industry experts said smaller securities firms have achieved high productivity by operating in different areas from their larger peers.

Large companies with big brand names and a fleet of offline branches have an advantage in stock and derivative brokerage. First-half sales of equity-linked securities spiked 74.4 percent on year but this was driven mostly by the top five. They are also more likely to work with big companies and handle large-scale public offerings.

Smaller firms aim for profit maximization by specializing in corporate finance, especially for small- and mid-sized companies, along with real estate and self-trading. Kiwoom Securities has focused on retail investors by offering low commissions.

Among the large firms, Korea Investment & Securities ranked fourth in earnings per employee with 148.4 million won. NH Investment & Securities came sixth with 95.3 million won, followed by KB Securities Co. and Samsung Securities Co.

About 76 percent of all 31,023 employees in the 24 securities companies belong to the top 10.

By Chung Woo-sung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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