Enter 2020.12.29 06:00 | Revision 2020.12.29 06:34
Large companies such as Mirae Asset and Kiwoom exceed 100 billion won
As individual investors”debt investments’ increased significantly, securities firms earned more than 860 billion won from January this year to last month on credit loan interest. Credit loans are money that securities companies lend to individual investors at an annual interest rate of 10%. The interest earned by securities firms until November has already exceeded the total profits of last year, and has been the largest in the past five years.
According to the results of a survey of 27 domestic securities companies by National Power of the People’s Office on the 29th, the interest income on credit loans of securities companies from January to November was 8652,22 billion won. It means that it earned 78.65 billion won per month from interest on credit loans.
This is an increase of 102.27 billion won (13.4%) from last year’s total credit loan profit (762.94 billion won). Compared to 2016 (52.30 billion won), which was five years ago, it increased by 59.6% (3231.92 billion won).
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Last year, 85 billion won in credit loan profits Samsung Securities (016360)In January-November this year, the company earned 12.81 billion won in credit loan profits, soaring 35.8 billion won (42.1%). Last year, it made 82.357 billion won of credit loan profit. NH Investment & Securities (005940)Also, from January to November of this year, the amount of profits from credit loans increased by 26.61 billion won (31.7%) with a profit of 108.518 billion won.
Kiwoom Securities (039490)(132.9 billion won), Korea Investment & Securities (859.23 billion won), and KB Securities (61.156 billion won) also generated 50 to 130 billion won in credit loan profits this year.
The increase in credit loan gains at securities companies is due to the surge in investors who have invested in stocks due to the rise of the domestic stock market. Securities companies usually lend money for a short period of 1 to 2 months and receive interest at the level of 10% per year. Securities companies lend money and hold investors’ stocks as collateral, and when stock prices fall, they sell these stocks to recover the loan, so there is little risk of taking money. It is pointed out that it is profitable because the money raised at low interest rates is borrowed with a certain collateral while receiving interest at the level of 10% per year.
According to the Korea Financial Investment Association, Kiwoom Securities has the highest interest rate for credit loans among major securities companies, receiving 9.0% annually for loans from 31 to 60 days. In addition, Korea Investment & Securities (8.4% per annum), NH Investment & Securities (8.2% per annum), Samsung Securities (7.9% per annum), and KB Securities (7.5% per annum) receive an annual interest rate of 7% or more.
According to the Financial Investment Association, the total amount of credit loans exceeded 19 trillion won (19,4038.57 billion won) (as of the 23rd). At the end of last year (end of December), it was around 9.2 trillion won, but it has increased by more than 10 trillion won in one year.
An official from the financial investment industry said, “To become an advanced capital market, securities companies must go to global investment banks (IBs), but they are on the contrary. In the past, they only acted as intermediaries with stock brokerage fees, but now they are making profits from high-interest short-term loans like loan companies. I said “look.”
Korea Equity Investors Association CEO Eui-jung Eui-jung also said, “I understand that securities companies are pursuing profits, but they still have to stick to the proper line. I think taking high interest rate profits with credit loans in the era of ultra-low interest rates is a serious moral hazard.”
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