Samsung Securities Co., Ltd.

Transcription

1 Samsung Securities Co., Ltd. 3Q 2016 Earnings Release November 2016 Investor Relations Samsung Securities

2 Contents Income Statement (summary) Net revenues Brokerage Financial product sales Trading & interest income Investment banking Operating expenses Wealth management client base Appendix SAMSUNG SECURITIES

3 Income Statement (summary) (KRW billon) Consolidated Separate Major Changes (Separate basis) 3Q16 2Q16 3Q15 QoQ YoY 3Q16 2Q16 3Q15 QoQ YoY Net revenues % +1% % -5% Brokerage ¹ % -23% % -24% Financial product sales ² % +28% % +27% Trading & Interest Income % +38% % +39% Investment banking % -48% % -48% Other ³ % -13% % -73% Brokerage commission decreased amid weak individual client activity (-6% QoQ) Financial product sales revenue remained steady on increased OTC early termination revenue (+1% QoQ) Trading & Interest income decreased due to volatile interest rates (-23% QoQ) Investment banking revenue decreased due to weak performance at ECM and DCM division (-27% QoQ) Commission expenses (4.6) (5.1) (5.9) -9% -22% (7.5) (8.0) (9.9) -6% -24% Operating expenses % -3% % -2% Personnel expenses % -4% % -3% Amortization & depreciation % -2% % +0.04% G&A expenses % -1% % -0.4% Operating income % +9% % -13% Non-operating income (0.3) -87% (14.0) +43% - Pretax income % +10% % +10% Income tax expense % +8% % +9% Net income % +11% % +11% Revenue breakdown Investment Banking 15% 45% 3% 3% Trading & Interest Income Others 35% Brokerage (Attributable to shareholders) % +11% Return on equity 5.7% 6.1% 5.0% -0.4%p +0.7%p 5.3% 5.6% 4.7% -0.3%p +0.6%p Financial Product Sales Cost-to-income ratio 68.2% 69.1% 70.6% -0.9%p -2.6%p 68.7% 69.4% 66.0% -0.7%p +2.7%p ¹ Brokerage revenue excluding related costs ² Net revenues from financial product sales includes mutual funds, wrap accounts, OTC derivative products, bancassurance and trust(fixed income sales credit included in trading income) ³ Interest on securities borrowing expenses, card related commissions(separate basis includes dividend from subsidiaries) SAMSUNG SECURITIES 3

4 Separate basis Brokerage: W69.2bn (-6% QoQ, -24% YoY) Brokerage commission decreased amid weak individual client activity Domestic equity brokerage turnover from individuals and foreigners fell 7%, 6% respectfully, leading to lower brokerage commission (W65.3bn, -6% QoQ, -22% YoY) Overseas equity brokerage commission remained at W2.4bn (SSS) Brokerage Commission (SSS) Equity turnover (KRW trillion) (SSS) Overseas equity assets (KRW trillion) % % +2% Other % 1.4 Overseas % 2.4-1% equity % % 7.6-7% 65.3 Domestic equity 5.9% 5.8% 5.7% M/S Other Foreigner Domestic Institution Individual 70% 66% % 69% 1.32 % of ex-china ex-china China 3Q15 2Q16 3Q16 Source : Samsung Securities Source : Samsung Securities, KOSPI, KOSDAQ, ETF & KONEX Source : Samsung Securities SAMSUNG SECURITIES 4

5 Separate basis Financial product sales: W89.4bn (+1% QoQ, +27% YoY) Financial product sales revenue remained steady on increased OTC early termination revenue OTC derivatives revenue improved with growth in ELS early termination (W63.1bn, +10% QoQ, +40% YoY) ELS early termination: 3Q15 W1.0tn 2Q16 W0.7tn 3Q16 W1.4tn (+101% QoQ, +45% YoY) Financial products balance down as institutions withdrew funds from trust and OTC derivatives (SSS) Financial product sales revenue (SSS) Financial products balance (KRW trillion) (SSS) OTC derivatives sales (KRW trllion) % -35% -11% -3% +10% Trust Wrap Account Fund % -7% +2% +2% -6% OTC derivatives Fund Wrap Account 7.5% 8.9% 9.7% M/S % OTC derivatives Trust Note : Net of related expenses Note : End balance Note: : Samsung Secutires, Infomax SAMSUNG SECURITIES 5

6 Separate basis Trading & interest income: W30.1bn (-23% QoQ, +39% YoY) Trading & interest income decreased -23% QoQ due to volatile interest rates Market volatility increased as markets awaited for the US interest rate hike and global monetary policies Margin loan balance growth continued in 3Q16 (W1.8tn, +9% QoQ, +33% YoY) (SSS) Trading & interest income (SSS) Trading income related assets (SSS) Deposit & margin loan balance % (KRW trillion) % DLS (KRW trillion) -1% Client cash deposit ELS +9% RP Margin loan Note : Samsung Securities Note : End balance of client asset balance Note : Average balance SAMSUNG SECURITIES 6

7 Separate basis Investment banking W5.4bn (-27% QoQ, -48% YoY) IB revenue decreased as performance at ECM and DCM division slowed down Structured Financing revenue up +129% due to increased deals such as oversea aircraft funding Efforts to supply alternative investment products to wholesale and retail clients continue (SSS) Investment banking revenue (SSS) Corporate loan balance (SSS) Structured product supply # of products supplied % % -99% -24% +129% DCM ECM M&A Structured financing Note : Structured financing includes structured products related revenue, Note : End balance Note : Amount offered to retail & wholesale clients SAMSUNG foreign SECURITIES currency securities etc. 7

8 Separate basis Operating expenses W131.9bn (-8% QoQ, -2% YoY) Operating expenses decreased 8% QoQ due to one-off payroll related expenses in 2Q16 Fixed personnel expenses cut by -12% QoQ Cost-to-income ratio remained flat QoQ at 69% (SSS) Operating expenses (SSS) Cost-to-Income ratio (SSS) Branches & employees % -6% -12% Variable personnel exp. Fixed personnel exp. 64% 66% 66% Fixed exp. / operating exp ,203 2,198 2,208 # of branches % -6% 6.7 Service charge 66% 69% 69% # of employees SG&A Note : Fixed expense includes personnel expenses, IT expenses, Note : Including employees in overseas offices depreciation cost, rent and maintenance costs SAMSUNG SECURITIES 8

9 Separate basis Wealth management client base: W172tn (-1% QoQ, -2% YoY) Net outflow of client assets in 3Q as certain institutions withdrew funds 93,822 HNWI clients with average asset of W1.0bn per client Return on client assets fell by a margin but remains near 50bps (SSS) Client assets (KRW trillion) (SSS) Number of HNWI clients ( 000 person) (SSS) Return on client assets Net inflow Asset per Person (W bn) bps Institutions Individuals HNWI Note : End balance Note : Based on retail clients SAMSUNG SECURITIES 9

10 Appendix Company overview Net revenue breakdown Financial statements Balance sheet Income statement Client assets under management SAMSUNG SECURITIES

11 Company Overview Appendix CEO Mr. Yong-Am Yoon Number of employees 2,208 Market Cap. (Sep 30, 2016) W2.6tn Key Financials (consolidated) (Financial Advisors) 755 3Q Total assets 33,265 30,994 25,775 Shareholders equity 3,497 3,524 3,427 (Majority interest) 3,497 3,524 3,427 Net income (Majority interest) ROE(annualized, %) 5.7% 7.9% 6.8% Shareholder composition Samsung Life insurance(19.2%), other affiliates(0.3%), Samsung Securities(10.9%), National Pension Service(8.2%), Korea Investment Trust Management(5.9%), foreign investors(21.9%), other institutional and individual investors(33.6%) Oversea branches Seoul Hong Kong New York London Beijing Tokyo Founded Shareholders equity Separate basis Number of branches 72 3, Company History 1982 Founded as Hanil Investment Finance 1988 Listed in Korea Exchange 1992 Joined Samsung Group and renamed Samsung Securities 2000 Merged with Samsung Investment Trust and Securities 2003 Adopted wealth management business model 2006 Ranked #1 in all categories of Asiamoney s Brokers Poll Signed cooperation agreement with Rothschild UK Named Best Research in Korea by Institutional Investor for three consecutive years 2010 Named Best Broker in Korea by Institutional Investor 2011 Signed MOU with China Asset Management (China AMC) Named Best Broker, Research, Equity in Korea by Asiamoney Named Best Investment Bank in Korea by FinanceAsia 2012 Named Best Private Bank and Broker by FinanceAsia for five consecutive years 2013 Named Best Fund Distributor in Korea by AsianInvestors 2014 Signed cooperation agreement with Pioneer Investments and Neuberger Berman 2015 Signed cooperation agreement with Woori Bank Signed cooperation agreement with CITIC Securities Included in Dow Jones Sustainability World Index for six consecutive years 2016 Signed cooperation agreement with KGI Securities SAMSUNG SECURITIES 11

12 Net revenue breakdown Appendix Net revenue breakdown Net revenue classification Brokerage commission Net brokerage commission after deducting trading commissions 5% 6% 3% 4% 3% 3% 25% 26% 19% Others Underwriting/ M&A Trading & interest income Sales commission from financial products Net wrap account fee after deducting commission for external advisory firms Fund sales commission and management fee Includes early termination revenue and day 1 profit from OTC derivatives Trading gains/losses related to securities 31% 29% 40% Financial product sales Trading & interest income Sales commissions of fixed income Gains/losses from proprietary trading Interest income related to trading(interest on fixed income, repo, swap, etc.) Gains/losses on valuation of clients deposits Distribution income 35% 38% 35% Brokerage Investment banking Underwriting commissions on securities, foreign securities and debentures M&A commission Separate basis Q 16 Others Trust fees, stock lending commission, etc. Dividend income from subsidiaries SAMSUNG SECURITIES 12

13 Consolidated balance sheet Appendix 3Q 16 (QoQ) (YoY) 2Q 16 1Q 16 4Q 15 3Q 15 2Q 15 1Q 15 4Q 14 3Q Total Asset 33,265-2% +7% 34,104 32,816 30,994 31,091 32,264 28,196 25,775 23,173 30,994 25,775 I. Cash and cash equivalents % +58% II. Financial assets at Fair Value 19,994-3% -3% 20,704 20,307 20,370 20,685 20,856 19,176 17,601 15,350 20,370 17,601 III. Financial assets available for sale 4,664 +9% +89% 4,282 3,651 3,302 2,463 2,419 2,350 2,428 1,972 3,302 2,428 IV. Loans and receivables 7,496-7% +4% 8,085 8,095 6,529 7,189 7,971 5,777 5,107 5,036 6,528 5,107 V. Financial assets held to maturity VI. Investments in associates % VII. Fixed assets 59-5% +11% VIII. Intangible assets 99 +2% -2% IX. Prepaid tax 34-1% +379% X. Deferred income tax assets 0.1-6% -27% XI. Other Assets 11 +4% -6% Total liabilities 29,768-3% +8% 30,631 29,412 27,471 27,462 28,690 24,750 22,348 19,670 27,470 22,348 I. Financial liabilities at Fair Value 9,788-4% +2% 10,167 10,366 9,219 9,628 9,189 9,214 8,042 6,872 9,219 8,042 II. Deposits 4,551-4% +2% 4,732 4,820 4,522 4,468 5,309 3,570 3,550 2,889 4,522 3,550 III. Borrowings 12,940 +1% +18% 12,790 11,664 11,569 10,986 11,576 10,241 9,498 8,049 11,569 9,498 IV. Debenture issued V. Defined benefit liabilities 7 +56% -17% VI. Reserve for contingent liabilities 8-5% 23% VII. Accrued income taxes 2-11% -2% VIII. Deferred income tax liabilities 88-12% +43% IX. Other liabilities 1,883-19% +5% 2,326 1,962 1,572 1,802 2,017 1,616 1,129 1,706 1,572 1,129 Total equity 3,497 +1% -4% 3,473 3,404 3,524 3,629 3,574 3,446 3,427 3,502 3,524 3,427 I. Share capital II. Capital surplus 1, ,508 1,508 1,508 1,508 1,508 1,508 1,508 1,508 1,508 1,508 III. Capital adjustment (408) - +76% (408) (408) (330) (233) (233) (233) (205) (128) (330) (205) IV. Accumulated OCI % -29% VI. Retained earnings 1,864 +3% +6% 1,814 1,762 1,785 1,763 1,718 1,594 1,558 1,521 1,785 1,558 VII. Minority interest SAMSUNG SECURITIES 13

14 Separate balance sheet Appendix 3Q 16 (QoQ) (YoY) 2Q 16 1Q 16 4Q 15 3Q 15 2Q 15 1Q 15 4Q 14 3Q Total Asset 31,992-3% +7% 32,909 31,700 29,923 29,952 31,333 27,393 25,037 22,509 29,923 25,037 I. Cash and cash equivalents % +69% II. Financial assets at Fair Value 20,077-4% -2% 20,832 20,364 20,278 20,528 20,702 19,011 17,382 15,182 20,278 17,382 III. Financial assets available for sale 4, % +93% 4,190 3,566 3,227 2,389 2,356 2,297 2,375 1,920 3,227 2,375 IV. Loans and receivables 6,003-10% +1% 6,641 6,812 5,269 5,945 6,911 4,821 4,221 4,232 5,269 4,221 V. Financial assets held to maturity VI. Investments in associates 255-6% -40% VII. Fixed assets 57-5% +13% VIII. Intangible assets 96 +2% -2% IX. Prepaid tax 34-1% +405% X. Deferred income tax assets XI. Other Assets 10 +5% -5% Total liabilities 28,516-3% +8% 29,460 28,316 26,419 26,337 27,763 23,946 21,606 18,996 26,419 21,606 I. Financial liabilities at Fair Value 9,788-4% +2% 10,167 10,365 9,207 9,608 9,177 9,206 8,034 6,870 9,207 8,034 II. Deposits 3,309-7% -5% 3,576 3,716 3,470 3,472 4,461 2,821 2,800 2,198 3,470 2,800 III. Borrowings 12,962 +1% +17% 12,813 11,708 11,614 11,032 11,619 10,283 9,541 8,089 11,614 9,541 IV. Debenture issued V. Defined benefit liabilities 6 +58% -22% VI. Reserve for contingent liabilities 8-5% +23% VII. Accrued income taxes VIII. Deferred income tax liabilities 88-12% +44% IX. Other liabilities 1,856-19% +12% 2,292 1,931 1,543 1,650 1,909 1,529 1,104 1,686 1,543 1,104 Total equity 3,476 +1% -4% 3,449 3,385 3,504 3,615 3,571 3,447 3,432 3,513 3,504 3,432 I. Share capital II. Capital surplus 1, ,508 1,508 1,508 1,508 1,508 1,508 1,508 1,508 1,508 1,508 III. Capital adjustment (386) - +84% (386) (386) (307) (210) (210) (210) (183) (106) (307) (183) IV. Accumulated OCI % -26% VI. Retained earnings 1,822 +3% +5% 1,776 1,728 1,752 1,737 1,695 1,574 1,541 1,505 1,752 1,541 SAMSUNG SECURITIES 14

15 Consolidated income statement Appendix 3Q 16 (QoQ) (YoY) 2Q 16 1Q 16 4Q 15 3Q 15 2Q 15 1Q 15 4Q 14 3Q Net revenues % +1% Brokerage commissions % -23% Financial product sales % +28% (Wrap account) % -21% (Fund) % +13% (OTC derivatives) % +40% (Others) % +21% Trading and interest income % +38% Investment banking % -48% Other income % -13% Commission expenses (4.6) -9% -22% (5.1) (5.5) (4.6) (5.9) (5.2) (5.0) (6.0) (6.6) (20.7) (19.7) Operating expenses % -3% Personnel expenses % -4% Depreciation & Amortization % -2% G&A expenses % -1% (IT expenses) % +1% (Rent) % +7% (Advertisement) % -54% (Others) % +8% Operating income % +9% Non-operating revenues % (1.3) (1.3) (0.3) (7.9) (2.2) (0.5) (3.5) (11.8) (4.3) Pretax income % +10% Tax % +8% Net income from discontinued operations Net income % +11% (Majority share) % 11% SAMSUNG SECURITIES 15

16 Separate income statement Appendix 3Q 16 (QoQ) (YoY) 2Q 16 1Q 16 4Q 15 3Q 15 2Q 15 1Q 15 4Q 14 3Q Net revenues % -5% Brokerage commissions % -24% Financial product sales % +27% (Wrap account) % -23% (Fund) % +13% (OTC derivatives) % +40% (Others) % +20% Trading and interest income % +39% Investment banking % -48% Other income % -73% Commission expenses (7.5) -6% -24% (8.0) (6.5) (7.4) (9.9) (8.0) (7.1) (9.3) (9.4) (32.4) (31.0) Operating expenses % -2% Personnel expenses % -3% Depreciation & Amortization 9.8-5% +0.04% G&A expenses % -0.4% (IT expenses) % +1% (Rent) % +7% (Advertisement) % -55% (Others) % +10% Operating income % -13% Non-operating revenues % (2.3) (6.7) (14.0) (7.6) (27.4) Pretax income % +10% Tax % +9% Net income % +11% SAMSUNG SECURITIES 16

17 Client assets under management Appendix Client asset breakdown (KRW trillion) Investment product assets breakdown (KRW trillion) 3Q 16 2Q 16 1Q 16 4Q 15 3Q 15 Client assets Equity Investment products Fund Other Pension OTC derivatives Fixed Income Repo Trust Trust OTC derivatives Pension Other (CP, cash, etc.) Client cash deposits Q 16 2Q 16 1Q 16 4Q 15 3Q 15 Client assets Individuals (HNWIs) # of HNWI clients 93,822 91,683 91,469 89,660 90, Q 15 4Q 15 1Q 16 2Q 16 3Q 16 RP Fixed income Mutual funds SAMSUNG SECURITIES 17

18 Disclaimer This presentation includes forward-looking statements about Samsung Securities Co., Ltd. All statements that address expectations or projections about the future are forward-looking statements. Although they reflect our current expectations, these statements are not guarantees of future performance, but involve a number of risks, uncertainties, and assumptions. Samsung Securities assumes no obligation to provide revisions to any forward-looking statements should circumstances change. SAMSUNG SECURITIES 18