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[Alpha Biz=(Chicago) Reporter Kim Jisun] Recently, the credit rating outlook of securities firms such as Daol Investment & Securities and Hi Investment & Securities has been downgraded one after another. This is because securities firms' earnings in the corporate finance (IB) sector have continued to deteriorate due to the sluggish real estate project financing market. Analysts in the credit rating industry say that securities firms will continue to suffer a decline in asset soundness due to the heavy PF-related burden.
According to the credit rating industry on the 6th, the credit rating outlook for Daol Investment & Securities and Hi Investment & Securities has recently been downgraded. The Korea Corporate Evaluation maintained Daol Investment & Securities' credit rating at A and lowered its rating outlook from 'stable' to 'negative' on the 29th of last month. On the 24th of the same month, the Korea Corporate Evaluation maintained the credit rating of Hi Investment & Securities at 'A +' and lowered the rating outlook from 'positive' to 'stable'.
Earlier, the Korea Credit Rating said on the 28th of last month that the credit rating and outlook of Hi Investment & Securities will be 'A +, stable'. The NICE credit rating assessed Daol Investment & Securities' credit rating and outlook as 'A, stable' on July 20.
Securities firms' credit rating outlook has been downgraded because the IB sector's performance is deteriorating due to the sluggish real estate PF market. Daol Investment & Securities has continued its operating loss from the fourth quarter of last year to the third quarter of this year as its IB earnings have plummeted since the second half of 2022. Operating profit, which recorded 104.6 billion won in 2021, halved to 45.3 billion won last year. In the first three quarters of this year, the company posted an operating loss of 30.5 billion won.
In particular, Daol Investment & Securities' IB earnings plunged 85 percent from the same period last year to 26.9 billion won from January to September this year. IB profits have decreased as new transactions (deals) have decreased due to the sluggish real estate PF market. From January to September 2022, IB revenue was 178.4 billion won.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
