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Weakened market hurts securities firms' Q1 profits

Update: May, 08/2015 - 08:38

Saigon Securities Incorporation (SSI) had the highest pre-tax and after-tax profits of VND230 billion ($10.6 million) and VND185.5 billion ($8.6 million). — Photo vneconomy

HA NOI (VNS) — Securities firms have announced profits for the first quarter compared to last year were less than expected due to a weakened market, stockbiz.vn reported on Wednesday.

The total revenue of the 20 largest securities firms on the market at the end of the quarter rose by 18 per cent to VND1.54 trillion (US$71.4 million), but the total net profit was halved to VND442.7 billion ($20.5 million).

In the total revenue structure, the revenue from brokerage and for-profit trading activity (securities firms make profit from trading shares on the market) fell by 17.5 and 51.6 per cent, respectively, while other revenue rose by 15.2 per cent to VND691.6 billion ($32 million).

The decreasing revenue from brokerage and for-profit trading activity was caused by a downward trend in Viet Nam's stock market. Liquidity was halved to an average of VND2 trillion ($92.6 million) each session during the first quarter.

During the quarter, Saigon Securities Incorporation (SSI) had the highest pre-tax and after-tax profits of VND230 billion ($10.6 million) and VND185.5 billion ($8.6 million).

Its profit was even higher than the total profit of HCM City Securities Company (HSC), ACB Securities Company (ACBS) and Vietnam Direct Securities Company (VNDS).

During the first quarter, SSI took the lead on all three stock markets including HCM Stock Exchange (HoSE), Ha Noi Stock Exchange (HNX) and Unlisted Public Company Market (UPCOM) with market share of 12.24 per cent, 8.58 per cent and 16.88 per cent, respectively. Noticeably, SSI's market share on UPCOM doubled the second one.

Among 20 securities firms, only five had positive profit growth rates, including KIS Vietnam Securities Company (KIS), VP Bank Securities Company (VPBS), May Bank Kim Eng (MBKE), PetroVietnam Securities Incorporation (PSI) and Bao Viet Securities Company (BVS).

KIS recorded an after-tax profit of VND10 billion ($463,000) after the last quarter, 27 times the result for the same period last year. Its revenue rose by 76 per cent to VND23.8 billion ($1.1 million).

In the company's revenue structure, other income tripled to more than VND16.5 billion ($764,000), which resulted from increases in capital, bank interest and customers.

Fifteen of the securities firms had negative profit growth rates, particularly Kim Long Securities Company (KLS), which lost VND39 billion ($1.8 million) after the first quarter compared to a profit of VND91.6 billion ($4.2 million) last year.

KLS said that during the last quarter, the company had to add VND50.8 billion ($2.3 million) to the provision for share value decreases, while during last year's first quarter, the company received more than VND21.8 billion ($1 million) from this provision. — VNS

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