NH Investment & Securities (005940) Q2 2024 earnings summary

Executive summary

• Net income for 2Q24 reached W197.2bn, up 130.2% year-over-year and down 12.6% quarter-over-quarter.

• For the half-year ended June 30, 2024, consolidated total assets reached ₩61.2 trillion and equity was ₩7.8 trillion.

• Net operating revenue was ₩1.1031 trillion, pre-tax income ₩561.7 billion, and net income ₩422.7 billion (attributable to controlling interests).

• ROE improved to 10.3% in 2Q24 from 4.7% in 4Q23, reflecting stronger profitability.

• Brokerage, financial product sales, and IB fee income all grew year-over-year, with brokerage fees up 8.9%, financial product sales up 22.8%, and IB fees up 11.5%.

Financial highlights

• Operating revenue for 2Q24 was W2,410.4bn, down 24.4% quarter-over-quarter but up 10.4% year-over-year.

• Net income for the half-year was ₩422.7 billion, up from ₩366.7 billion in the prior year period.

• Trading and related interest income rebounded to W311.5bn (+34.8% QoQ) due to favorable bond yield movements.

• IB income surged to W169.9bn (+54.3% QoQ) on improved commissions and asset valuation gains.

• Return on equity (ROE) and capital adequacy ratios remained strong, with a consolidated net capital ratio of 1,913.3%.

Outlook and guidance

• Continued focus on expanding IB and financial product sales, leveraging digital channels despite competitive pressures.

• Expectation of stable asset growth and further digital innovation to support client acquisition and retention.

• The company expects continued stable growth in the second half of 2024, supported by a favorable market environment and robust risk management.

• Anticipates further improvement in profitability as interest rates are expected to decline and capital markets stabilize.

• Focus remains on expanding digital and global business, diversifying revenue streams, and maintaining strong capital adequacy.