Korean asset managers’ Q2 net profit dips 7.7% on quarter

The combined net profit of South Korean asset managers fell 7.7 percent in the second quarter from the previous quarter, data showed Thursday.

According to preliminary data released by the Financial Supervisory Service, asset managers raised a total 384.9 billion won ($288 million) in net profit in the April-June period, down 7.7 percent from the previous three months.

The figure, however, is up 126.7 percent from the same period a year ago.

The asset managers’ total funds under management stood at 881.4 trillion won as of the end of June, with public funds accounting for 34.8 percent and private funds 65.2 percent.

Public fund assets decreased by 6 trillion won compared to 312.8 trillion won at the end of the first quarter, while private fund assets increased by 16.7 trillion won during the same period.

The total value of discretionary investment contracts for the second quarter stood at 562 trillion won, with bond-type contracts coming to 395.5 trillion won, equity-type contracts 92.8 trillion won, and mixed bond contracts 42.2 trillion won.

In terms of revenue, fee income amounted to 1.02 trillion won, up 14.7 percent compared to the first quarter but down 5.4 percent from a year ago.

Fund management fees totaled 838.7 billion won, up 14.2 percent on quarter but down 6.9 percent on year.

Advisory fees for discretionary management amounted to 183.9 billion won, up 17.3 percent on quarter and 2.6 percent on year.

Sales administrative expenses in the second quarter reached 693.2 billion won, up 1.5 percent on quarter and 6.2 percent on year.

The securities investment profit generated from proprietary asset management in the second quarter amounted to 82.5 billion won, down 46.4 percent on quarter but up from a loss of 117.8 billion won a year ago.

Out of a total of 455 asset management firms, 228 companies reported profits, while 227 companies reported losses.

The ratio of loss-making companies, which stood at 49.9 percent, increased by 9.7 percentage points compared to the first quarter.

Among relatively small 374 general private asset management firms, 211 companies recorded losses.

The FSS explained that the increase in fee income was due to the slight increase in assets under management since the first quarter.