Illustrative image (Photo: VNDirect Securities Corporation) Financial statement reports showed that the securities group, including leadingcompanies, witnessed a sharp decline in profit.
Specifically, VNDirect Securities Corporation reported a plunge of 81.6%year-on-year in profit after tax, from nearly 762.2 billion VND in the firstquarter of 2022 to 140.5 billion VND in Q1 of 2023.
The securities firm explained the strong fall was due to the negative impact ofthe general market, which caused a 27% decrease in its revenue to 1.29 trillionVND.
Of which, revenue from margin lending and brokerage activities of VNDirectdipped by 46.2% and 68.4% on-year, respectively. Meanwhile, revenue fromproprietary trading was the only business activity posting an increase of 17.8%to 782 billion VND.
On the other hand, the company’s expenses rose by 4.2% over the same periodlast year to 629 billion VND, while loss of proprietary trading increased by 220.5billion VND, or 87.8%, and financial expenses also tripled.
Similarly, Saigon - Hanoi Securities JSC (SHS) and Viet Capital Securities JSCreported strong losses in business results. In the first quarter, SHS’s profitafter tax plummeted by 87.6% over last year to 40.9 billion VND, while VietCapital recorded a profit after tax of only 73 billion VND, down 82.4%year-on-year.
SSI Securities Corporation also couldn’t escape the downtrend. It reported adecrease of nearly 30% in profit after tax to 480.8 billion VND from 684billion VND in the same period of 2022.
Its revenue dropped 26.4% on-year to 1.43 trillion VND, of whichthe company’s proprietary trading revenue rose slightly to 679.1 billion VND,but interest from loans and receivables halved to 338.3 billion VND. Revenuefrom brokerage activities also fell by 57.1% to 257.1 billion VND.
The Q1 after-tax profit of Techcombank Securities JSC (TCBS) and Ho Chi MinhCity Securities Corporation (HSC) declined by 64.5% and 56.2% over last year,respectively, to 333.5 billion VND and 123.8 billion VND. Meanwhile, MiraeAsset Securities reported a fall of 54.9% year-on-year in profit after tax to 128.3billion VND due to a 53% drop in profit before tax and a 25.1% decrease inrevenue.
Most of the securities companies said that the reason for the decline in profitwas due to the volatility and uncertainties of the stock market in the firstthree months of 2023.
Given the high sensitivity to the market, securities companies’ proprietary trading,brokerage, and margin lending activities suffered strongly as the market wasgloomy and investors turned extremely cautious.
Particularly, interest rates are a major factor affecting the market mood. Highinterest rates caused investors to be worried about the prospect of corporateprofits, while the severe decline in global purchasing power affected importand export activities.
Higher interest rates are also a significant barrier to investors' demand formargin loans.
The statistics have not shown many signs of improvement. Outstanding balanceslightly increased in the first quarter of this year after plummeting in thefourth quarter of last year to the lowest level in seven quarters.
During the period, the total brokerage revenue of securities companiesreached 2 trillion VND, a decline of 34% over the previous quarter and lessthan a third of the value in the fourth quarter of 2021. The figure was thelowest in the last nine quarters.
The expenses for this activity also decreased by 21% compared to the previousquarter to approximately 1.85 trillion VND. As a result, the gross profit frombrokerage activities during the period fell sharply 76% to about 200 billionVND, the lowest level in 11 quarters.
VPS Securities JSC continued to lead in brokerage revenue, reaching 411.3billion VND, down 57.8% year-on-year. This marked the sixth consecutivequarterly fall in brokerage revenue.
Other securities firms also posted a fall of at least 20% in brokerage revenuein the first quarter, with SSI’s brokerage revenue reaching 257.1 billion VND;VNDirect’s 145.7 billion VND, HSC’s 132 billion VND and Mirae Asset’s 105billion VND.
Lower liquidity and gloomy market movements were attributed to thepoor performance of the brokerage activities of securities firms./.
VNA
