Mirae Asset Daewoo reported a pre-tax income of KRW554.3bn (US$521m) for the full year (FY) 2017, which represents an increase of 1394% compared to FY 2016 when pre-tax income was KRW37.1bn. The major reason for the massive increase in the bank's income as well as in other earnings is the merger of Mirae Asset Securities with Daewoo Securities at the end of 2016.
Investment banking revenue went up 152%, from KRW101.2bn in 2016 to KRW255.9bn in 2017, while revenue from wealth management practices, at KRW224.2bn, increased slightly by 27% from KRW176.3bn. The main wealth management products during FY 2017 were pension assets (worth approximately KRW1.6trn) and offshore bonds (worth approximately KRW600bn), according to the bank.
According to SRP data, for 2017 Mirae Asset Daewoo issued a total of 2209 ELSs and 233 DLSs. The brokerage and investment banking firm had a successful start of 2018 after its Mirae Asset Daewoo ELB 2227 became the best-ever-selling product in South Korea, according to SRP data. The product is linked to the domestic Kospi 200 index and struck on January 2, 2018 with sales volume of KRW2.54trn.
The bank's goal for 2018 is to capitalise on the fourth Industrial Revolution and provide exposure to global stocks listed in the US, Hong Kong and other foreign stock markets by increasing its "ELS issuance with underlying stocks such as Amazon, Google, Tencent Holdings and Alibaba as underlying assets", Kim explained in an interview for SRP earlier this year.
According to SRP data, Mirae Asset Daewoo issued a total of 2,866 structured products worth KRW3.2trn in 2017. For the same period last year, the group issued 2,062 structured products worth KRW8.8trn. About 40% of the company's products were linked to the Kospi 200 index (1103 products). Other popular underlyings included the S&P 500 index (979 products) and the Nikkei 225 index (805 products).
Samsung Securities reported net income of KRW270.8bn for 2017, up 55% from KRW174.2bn in 2016. Similarly, operating income rose from KRW211.7bn in 2016 to KRW360bn, indicating an increase of 70%. On the other hand, operating expenses rose slightly by 4%, from KRW582.6bn to KRW606.7bn.
The Group's net revenue went up 22% compared to the previous year and reached KRW966.7bn. Net revenue from financial products, including mutual funds, wrap accounts, OTC derivative products, bancassurance and trust, went up 31% year-on-year, from KRW313bn to KRW409bn due to improvement in OTC derivatives, the bank reported. In 2017, OTC derivatives revenue saw an increase of 54% year-on-year, from KRW8.2bn to KRW12.7bn due to record high ELS sales and early termination revenue. ELS early termination revenue grew from KRW1.7trn in 2016 to KRW17.2trn in 2017, up 148%. According to SRP data, Samsung Securities issued a total of 2,591 ELSs and 461 DLSs in 2017, up from 2,047 ELSs and 425 DLSs in 2016.
Revenue from investment banking went up significantly by 103%, year-on-year, from KRW32.6bn to KRW66.2bn, with revenue from structured products being KRW32.6bn, up from KRW11.1bn in 2016.
SRP data shows that in 2017 Samsung Securities issued a total of 3,257 structured products worth KRW11.3trn, up from 2,757 products worth KRW7.7trn in 2016. About 30% of the structured products Samsung Securities issued were linked to the S&P 500 index (979 products). Also, 826 products were linked to the Kospi 200 index, 818 to the Hang Seng Index, 575 to the Nikkei 225 index and 434 to the Hang Seng China Enterprises Index.
Shinhan Financial posted net income of KRW2.9trn for FY 2017, up 5.2% compared to FY 2016 when net income was KRW2.77trn. Operating income, including interest and non-interest income, increased 4.6% year-on-year to KRW9.2trn with interest income being KRW7.8trn and non-interest income being KRW1.4trn. Fees and commission income also rose from KRW1.6trn in 2016 to KRW1.7trn in 2017, indicating an annual increase of 9.3%.
Shinhan reported income of KRW72.3trn from financial products, up 6.1% from KRW68.8trn in 2016. Income from ELS was KRW2.9trn, down 4%, year-on-year. According to SRP data, the group issued 1,728 ELSs and 495 DLSs, up from 1,220 ELSs and 282 DLSs in 2016.
The group's assets under management (AUM) went up 4.3%, year-on-year, from KRW39.3trn in 2016 to KRW41trn. Equity type assets were KRW4.6trn, up 29.8% from KRW3.6trn. Bond type assets went up 1.4%, from KRW12trn to KRW12.2trn, while derivatives went down 33%, from KRW2.5trn to KRW1.7trn. Shinhan Investment, which huses the group's structured products operations, generated 7.3% of the group's net income in 2017. The company reported a net income of KRW211.9bn in 2017, up 83.2% on an annual basis and up 32.7% on a quarterly basis.
According to SRP data, in 2017 Shinhan Financial issued a total of 2,638 structured products worth KRW10.2trn. For the same period last year, the group issued 1,890 structured products worth KRW5.9trn. About 62% of the group's structured products in 2017 were linked to the Eurostoxx 50 index (1646 products). Other popular indices included the Nikkei 225 index (924 products), the Hang Seng Index (885 products) and the Kospi 200 index (735 products).
KB Financial Group, owner of KB Securities which in mid-2016 merged with Hyundai Securities, reported that net interest income from the securities business increased by 20.4%, from KRW6.4trn in 2016 to KRW7.7trn in 2017. Net fee and commission income went up 29.3% from KRW1.6trn to KRW2.05trn on an annual basis. The group's gross operating income saw a 36.9% annual increase in value to KRW10.2trn.
In 2017, KB Financial Group issued a total of 2,637 structured products worth KRW12.5trn, according to SRP data. For the previous year, the group issued 509 structured products worth KRW3.01bn. ELSs constituted more than 65% of the group's structured products (1,779 products). The majority of KB Financial's structured products were linked to the Eurostoxx 50 index (1,456 products), the Nikkei 225 index (885 products), the Kospi 200 index (867 products) and the S&P 500 index (722 products).
Click in the links to access the quarterly reports: Mirae Asset Daewoo, KB Financial Group, Shinhan Financial, Samsung Securities.
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