Asset management firms’ Q3 net profit down 42 percent amid weak stock market

[Photo by MK DB]

Asset management companies operating in South Korea reported more than 40 percent drop in their net profit in the third quarter compared to the same period last year, while one out of three private fund managers were in a state of capital erosion due to losses, as earnings were hit from a weak stock market.

According to data released by the Financial Supervisory Service Thursday, the combined net profit of asset management companies reached 362.5 billion won ($274.6 million) for the July-September period, down by 257.5 billion won or 41.5 percent from the same period last year. However, compared to the second quarter of this year, their profits more than doubled.

Of the total 414 asset managers, 226, or 54.6 percent, were in the red for the quarter.

The combined assets under management by these companies amounted to 1,401.1 trillion won at the end of September, up 2.9 percent from three months ago.

The Financial Supervisory Service said it will continue to monitor potential risk factors in the market, while checking the financial status of new management companies with relatively weak revenue bases.