Korean asset managers’ 2022 OP halved on lower fees, investment losses

Yeouido financial district in central Seoul [Photo by Lee Chung-woo]

The combined operating profit of South Korean asset management companies more than halved last year amid growing uncertainty in the financial market.

According to data from the Financial Supervisory Service on Thursday, the combined operating profit of asset managers reached 1.2 trillion won ($919 million) in 2022, down 51.7 percent from a year ago.

The combined operating revenue reached 4.8 trillion won in 2022, down 14 percent from a year ago, on a sharp decline in commission profits and investment losses. The gains on securities investments plunged 98.1 percent from a year ago to 13 billion won.

The combined operating expenses climbed 15.5 percent to 3.6 trillion won last year on a rise in administrative expenses.

Overall net income for 2022, in the meantime, increased 31.7 percent to 2.9 trillion won. The rise comes on a one-off factor of a 2.27 trillion won profit from the disposal of the Korea Value Asset Management Co.’s stake in KakaoBank Corp.

There were a total 433 asset managers in Korea at the end of December last year, up 85 from the same period a year ago. Of them, 216 managers were in the black while 217 in the red. Last year, 50.1 percent of the managers logged losses, up 39.2 percentage points from 10.9 percent a year ago.

Three out of 10 managers also suffered an impaired capital in 2022, up from more than one in 2021.

The managers’ assets under management amounted to 1,397.9 trillion won at the end of December last year, up 5.7 percent from the previous year.

Funds amounted to 831.1 trillion won, including 275.5 trillion won in public funds and 555.6 trillion won in private funds.

“The assets under management grew while the companies’ gains deteriorated significantly due to increased uncertainty in the financial market,” the FSS said. “We will continue to monitor potential risk elements and check the inflow and outflow of funds.”