Mirae Asset Securities Co. became the third largest brokerage house in terms of shareholders’ equity in South Korea in the first half of this year, replacing Samsung Group’s brokerage arm Samsung Securities Co. that had remained in the position for the previous five years, according to the analysis of the country’s top 20 brokerages by net worth released by the Maeil Business Newspaper on Sunday.

Maeil Business Newspaper found that Mirae Asset Securities moved up to third place by one notch in shareholders’ equity during the first six months of this year from the fourth late last year. Its net worth increased by about 50 billion won ($45.2 million) to 3.48 trillion won from the end of last year. It significantly upped its capital last year by issuing new stocks worth more than 1 trillion won, which also helped it climb to fourth-largest from sixth by late last year.

Samsung Securities dropped to fourth place from third place. Although it posted about 100 billion won in net profit in the first half, it saw its net worth decrease by 50 billion won to 3.45 trillion won over the cited period after it bought back 80 billion won worth shares and paid out 70 billion won worth dividends, which was viewed as a move to prepare to transform into an interim financial holdings company.

Stockholders’ equity is a firm’s total assets minus its total liabilities. In accounting, share buyback is excluded from net worth while dividend payouts or loan-loss provision is excluded from retained earnings.

The analysis also found that Hyundai Securities Co. went up to fifth place from sixth place over the same period. The securities firm returned to the fifth by increasing shareholders’ equity by 31.2 billion won to 3.31 trillion won after it lost ground to Mirae Asset Securities late last year.

Korea Investment & Securities Co. declined by one notch to sixth place from fifth. The securities firm had stayed in the fifth for the past 10 years since it merged with Dongwon Securities Co., but its shareholders’ equity fell by 80 billion won after it paid out dividends worth 200 billion won in March, sharply up from 60 billion won a year ago, erasing 100 billion won in net profit earned in the first half.

Among small- and medium-sized securities firms, Hanwha Investment & Securities Co. fell to 18th place from 14th place. After logging about 140 billion won loss from equity-linked securities (ELS) in the first half, its net worth declined to 651.7 billion won from 794.5 billion won. The securities firm plans to up capital through new stock issuance worth 200 billion won on September 19.

Later this year, two mega brokerage houses are expected to be born once two merger deals are completed, a move that is expected to reshape the landscape of the local brokerage industry. Mirae Asset Daewoo Co. and Mirae Asset Securities are expected to complete their marriage by the end of this year, raising their combined shareholders’ equity to about 7 trillion won, while Hyundai Securities and KB Investment & Securities Co. should become one company with shareholders’ equity of about 4 trillion won. As of June, NH Investment & Securities Co. is the largest brokerage house with shareholders’ equity of 4.55 trillion won.

By Choi Jae-won

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