Leading securities firms post poor performance in Q1 hinh anh 1Illustrative image (Photo: VNDirect Securities Corporation)
Hanoi (VNS/VNA) - The less-optimistic movements of the stock market have negatively impacted the business results of securities firms in the first quarter of the year.

Financial statement reports showed that the securities group, including leading companies, 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 first quarter of 2022 to 140.5 billion VND in Q1 of 2023.

The securities firm explained the strong fall was due to the negative impact of the general market, which caused a 27% decrease in its revenue to 1.29 trillion VND.

Of which, revenue from margin lending and brokerage activities of VNDirect dipped by 46.2% and 68.4% on-year, respectively. Meanwhile, revenue from proprietary 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 period last year to 629 billion VND, while loss of proprietary trading increased by 220.5 billion VND, or 87.8%, and financial expenses also tripled.

Similarly, Saigon - Hanoi Securities JSC (SHS) and Viet Capital Securities JSC reported strong losses in business results. In the first quarter, SHS’s profit after tax plummeted by 87.6% over last year to 40.9 billion VND, while Viet Capital 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 a decrease of nearly 30% in profit after tax to 480.8 billion VND from 684 billion VND in the same period of 2022.

Its revenue dropped 26.4% on-year to 1.43 trillion VND, of which the company’s proprietary trading revenue rose slightly to 679.1 billion VND, but interest from loans and receivables halved to 338.3 billion VND. Revenue from 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 Minh City 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, Mirae Asset Securities reported a fall of 54.9% year-on-year in profit after tax to 128.3 billion VND due to a 53% drop in profit before tax and a 25.1% decrease in revenue.

Most of the securities companies said that the reason for the decline in profit was due to the volatility and uncertainties of the stock market in the first three months of 2023.

Given the high sensitivity to the market, securities companies’ proprietary trading, brokerage, and margin lending activities suffered strongly as the market was gloomy and investors turned extremely cautious.

Particularly, interest rates are a major factor affecting the market mood. High interest rates caused investors to be worried about the prospect of corporate profits, while the severe decline in global purchasing power affected import and export activities.

Higher interest rates are also a significant barrier to investors' demand for margin loans.

The statistics have not shown many signs of improvement. Outstanding balance slightly increased in the first quarter of this year after plummeting in the fourth quarter of last year to the lowest level in seven quarters.

During the period, the total brokerage revenue of securities companies reached 2 trillion VND, a decline of 34% over the previous quarter and less than a third of the value in the fourth quarter of 2021. The figure was the lowest in the last nine quarters.

The expenses for this activity also decreased by 21% compared to the previous quarter to approximately 1.85 trillion VND. As a result, the gross profit from brokerage activities during the period fell sharply 76% to about 200 billion VND, the lowest level in 11 quarters.

VPS Securities JSC continued to lead in brokerage revenue, reaching 411.3 billion VND, down 57.8% year-on-year. This marked the sixth consecutive quarterly fall in brokerage revenue.

Other securities firms also posted a fall of at least 20% in brokerage revenue in 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 105 billion VND.

Lower liquidity and gloomy market movements were attributed to the poor performance of the brokerage activities of securities firms./.