NH expected to outrun KDB Daewoo this year

By taking over Woori’s brokerage units last year, NH Investment & Securities at once rose to be the nation’s top securities firm by assets but is yet to catch up with runner-up rival KDB Daewoo Securities in terms of profitability.

According to data by the Korea Financial Investment Association, the brokerage houses of NH, KDB, and Samsung respectively achieved 26 million won ($23,000), 34 million won and 35 million won in net profit per employee in the first quarter.

NH Securities’ figure was not only the lowest among the top three but also visibly lower than the industry average of 31 million won, data showed.

“Following the merger with Woori Securities late last year, we spent large sums in marketing and advertising, as well as for special processes such as integrating the computing systems,” said an official of NH Investment & Securities.

“But we expect that this year will be a turning point, now that we have realigned our organization.”

The company’s total assets currently stand at 4.42 trillion won, outrunning KDB Daewoo’s 4.2 trillion won.

In terms of operating profits, however, the company is ranked second with 123.3 billion won in the first quarter, falling behind KDB Daewoo’s 142.5 billion won. Its per unit stock price, too, is lower than that of its rival.

But the current situation is likely to be reversed within the quarter, according to market researcher FN Guide.

While NH Investment & Securities is noted for its diversification efforts, KDB Daewoo Securities chose to focus on its wealth management and Samsung Securities on its top-tier customers.

Kim Won-kyu, CEO of the NH brokerage house, had said that the top priority for this year is to expand the company’s business horizon and to pioneer new market sectors.

KDB Daewoo Securities, on the other hand, is poised to focus further on its forte, which is wealth management.

“We will promote KDB Daewoo Securities to Korea’s top private banker,” CEO Hong Sung-guk told reporters in February.

No. 3 player Samsung Securities is marked for its mobile investment system, as well as its affiliation with the country’s top conglomerate Samsung.

By Bae Hyun-jung (tellme@heraldcorp.com)