Korean brokerages declare ambiguous profitability

Korean securities firms enjoy a surge in earnings growth, but worries about their financial soundness are hindering industry consolidation.

Korea’s brokerage firms are a conundrum. Most of them have just posted substantial quarterly profit increases, yet most are also insufficiently secure, according to a key ratio monitored by the country’s financial regulator. Both features might be preventing the consolidation urged by the authorities in order to create world-challenging, domestic investment banks.

Securities firms operating in Korea enjoyed a jump of 74.7% in their fiscal year first-quarter earnings from a year earlier, said the Financial...

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