Hana Securities said its third-quarter operating profit fell sharply from a year earlier, as worsening bond trading results from rising interest rates and shrinking market turnover weighed on earnings.
Preliminary consolidated operating profit came to 21.1 billion won ($14.7 million) in the third quarter, down 67.8% from 65.4 billion won a year earlier, according to the Financial Supervisory Service's disclosure system (DART) on the 23rd. The figure was down 89.7% from 203.7 billion won in the previous quarter. Net profit fell 83.9% to 10.1 billion won from 62.4 billion won a year earlier.
The company attributed the decline to lower returns on asset management amid rising rates and a drop in market trading volumes. In wealth management, fee income fell as trading turnover shrank, while in sales and trading, bond trading results deteriorated because of higher rates. Institutional sales and the delta-one business within sales and trading grew, however. In investment banking, the firm said it maintained a conservative approach to asset management while focusing on expanding acquisition financing and related businesses through One-IB, a group-wide collaboration framework.
Despite the weak third quarter, cumulative results for the year improved on the back of strong first-half performance. Operating profit for the first three quarters totaled 366.4 billion won, up 98.9% from 184.2 billion won a year earlier. Cumulative net profit rose 67.4% to 281.6 billion won from 168.2 billion won.
"We are maintaining a conservative management approach in line with rising rates and focusing on securing new growth drivers," an official at Hana Securities said.