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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Brokerages Outperform Major Banks for First Time as ‘Money Move’ Accelerates Toward Capital Markets
Riding on record gains in the benchmark KOSPI index and a pronounced “money move” into capital markets, Korea Investment & Securities—the nation’s largest brokerage by equity capital—posted annual net profit exceeding KRW 2 trillion for the first time.
The milestone surpasses the annual earnings of NH NongHyup Bank, one of South Korea’s five major commercial banks. It also marks the first time since the five-bank system was established in 2012 that a securities firm’s annual net profit has exceeded that of a major bank.
Amid the stock market rally, major domestic brokerages have successively joined the so-called “KRW 1 trillion net profit club,” delivering record-breaking earnings. Market observers note that as the capital market has achieved quantitative expansion, it must now evolve toward sustainable growth, channeling funds into productive and innovative sectors of the economy.
Korea Investment & Securities disclosed on Feb. 11 that its 2025 annual net profit reached KRW 2.0135 trillion, up 79.9% from 2024. This marks the first time an individual brokerage has reported net profit exceeding KRW 2 trillion.
Other leading brokerages also reported strong results. Mirae Asset Securities, NH Investment & Securities, Samsung Securities, and Kiwoom Securities joined Korea Investment & Securities in posting annual net profit of more than KRW 1 trillion.
In contrast, NH NongHyup Bank announced the same day that its 2024 net profit totaled KRW 1.814 trillion, up 0.4% year-on-year.
The surge in brokerage earnings reflects the ongoing “money move” phenomenon, in which investors shift funds from bank deposits—offering annual interest rates of around 2–3%—into securities accounts seeking higher returns.
According to the Korea Financial Investment Association, investor deposits held in brokerage accounts for stock purchases reached KRW 106.03 trillion at the end of last month, nearly doubling from KRW 55.58 trillion a year earlier. The KOSPI’s average daily trading value also rose 57.1% year-on-year to KRW 16.9 trillion, compared with KRW 10.7 trillion the previous year.
As trading volumes increase, brokerage commission income rises accordingly, boosting net profits.
Meanwhile, bank deposits have shown a relative decline. Data from four major commercial banks—KB Kookmin, Shinhan, Hana, and Woori—indicate that demand deposits, which can be withdrawn immediately, accounted for 29.8% of total deposits (KRW 1,787.6 trillion) as of Feb. 10, down from 30.9% at the end of December.
Market analysts also point to Mirae Asset Securities’ market capitalization of KRW 29.09 trillion (based on the Feb. 11 closing price), which has surpassed that of bank-based Woori Financial Group (KRW 27.78 trillion), as further evidence of the ongoing shift of capital toward the securities sector.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
