KOSPIFinance005940

NH Investment & Securities

₩26,850▲ 1.32%2026-10-02 close

Market Cap

₩10T

Turnover

₩9B

Volume

340K

Shares out.

370M

PER

6.5×

PBR

0.9×

EPS

₩4,092

Dividend Yield

4.88%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩1,300 per share · Prices as of the 2026-10-02 close

Report overview

Peak Brokerage Debate Meets the IMA Transition

After a record first half of 2026, NH Investment & Securities now faces a phase in which the key question is how much its IMA, wealth management and corporate finance businesses can offset slowing equity trading volumes.

1
Consolidated operating profit rose from KRW 521.4bn in 2022 to KRW 1,420.6bn in 2025, and net profit attributable to owners from KRW 303.4bn to KRW 1,031.6bn, marking a step-up in earnings power.
2
First- and second-quarter 2026 operating profit came in at KRW 636.7bn and KRW 681.2bn, with net profit to owners of KRW 475.7bn and KRW 489.6bn, another step up in quarterly earnings.
3
The firm became Korea's third Investment Management Account (IMA) operator in March 2026 and has run three product offerings through August, widening its funding base.
4
On the other side, domestic trading volumes have fallen sharply since June, raising questions about the sustainability of brokerage-driven earnings in the second half.
5
With rising leverage, the debt-to-equity ratio increased from 668.9% in 2024 to 783.5% in 2025, while rising market rates have added volatility to bond trading results.

Business structure

NH Investment & Securities is a large Korean brokerage under NongHyup Financial Group, earning revenue across five pillars: brokerage, wealth management (financial product distribution), investment banking, trading and wholesale.

The company has pursued a so-called '4-3-2-1' portfolio strategy, targeting a revenue mix of 40% wealth management, 30% IB, 20% trading and 10% wholesale. Brokerage consists of domestic and overseas equity commissions plus margin-loan interest, and is directly tied to market turnover and market share.

Amid expanding trading volumes, its market share improved from 10.7% in the first quarter of 2026 to 11.4% in the second, a gain of 0.7 percentage points.

Wealth management centers on distribution fees from wraps, funds and bonds; in the second quarter of 2026, sales of target-return wrap products lifted wealth management fees by 171.8% quarter on quarter.

IB covers equity and debt capital markets as well as acquisition and structured finance: in the first half of 2026 the firm ranked first in the IPO underwriting league table and retained the top position in lead-managing bonds issued by specialized credit finance companies.

It has operated a short-term note (issued note) business since receiving a license in 2018, and with the addition of IMA in 2026 its funding base widens, allowing expansion across corporate finance, venture capital supply and structured finance.

IMA business is permitted only to comprehensive financial investment firms with at least KRW 8trn in equity capital, and three houses have been licensed: Korea Investment & Securities, Mirae Asset Securities and NH Investment & Securities.

Competition is head-to-head with the largest capital-base peers, against online-focused brokers in retail share and against other mega-IBs in corporate finance.

In 2026 the company moved to a co-CEO structure under Shin Jae-wook and Bae Kwang-soo, aiming to deepen expertise in corporate finance and wealth management and to diversify its earnings mix.

Earnings trend

Quarterly revenue · Operating profit

₩321.9B25Q2₩391.3B25Q3₩418.3B25Q4₩636.7B26Q1₩681.2B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩521.4B2022₩725.8B2023₩901.1B2024₩1.4T2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	—	₩321.9B	—
2025Q3	—	₩391.3B	—
2025Q4	—	₩418.3B	—
2026Q1	—	₩636.7B	—
2026Q2	—	₩681.2B	—

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	—	₩521.4B	₩303.4B	—	4.2%	639.2%
2023	—	₩725.8B	₩556.4B	—	7.3%	644.7%
2024	—	₩901.1B	₩686.7B	—	8.5%	668.9%
2025	—	₩1.4T	₩1T	—	10.9%	783.5%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

The annual trajectory shows clear recovery and expansion.

Consolidated operating profit rose from KRW 521.4bn in 2022 to KRW 725.8bn in 2023, KRW 901.1bn in 2024 and KRW 1,420.6bn in 2025, while net profit attributable to owners climbed for three straight years from KRW 303.4bn in 2022 to KRW 556.4bn, KRW 686.7bn and KRW 1,031.6bn.

Quarterly, operating profit and net profit to owners moved from KRW 321.9bn and KRW 256.7bn in the second quarter of 2025 to KRW 391.3bn and KRW 283.1bn in the third and KRW 418.3bn and KRW 283.5bn in the fourth, then jumped to KRW 636.7bn and KRW 475.7bn in the first quarter of 2026 and KRW 681.2bn and KRW 489.6bn in the second.

Summed over the latest four quarters (third quarter 2025 through second quarter 2026), net profit to owners reaches KRW 1,531.9bn, already above the confirmed full-year 2025 figure.

In a preliminary earnings disclosure on 23 July 2026, the company said first-half net profit to owners of KRW 965.2bn was its best half-year result ever, and first-half brokerage fee income rose 211.7% year on year to KRW 795.0bn while financial product distribution fees rose 127.2% to KRW 125.9bn.

Trading division income increased 62.5% to KRW 831.5bn in the first half; management said second-quarter bond trading conditions turned volatile as market rates rose, but pre-emptive position adjustments and risk management still delivered KRW 407.3bn.

Equity grew from KRW 7,228.1bn in 2022 to KRW 9,438.1bn in 2025, helped by a KRW 650bn rights issue carried out in July 2025.

Total liabilities, however, expanded to KRW 73,947.3bn in 2025, lifting the debt-to-equity ratio from 668.9% to 783.5%, and operating cash flow stayed negative at KRW -5,421.6bn as trading and loan assets grew - a common pattern for securities firms in an asset-expansion phase, but one that should be read alongside the funding mix.

In short, the brokerage surge was the primary driver of the earnings step-up, supported by product distribution fees and corporate-finance-related valuation gains.

Industry analysis

In the first half of 2026 Korea's securities industry enjoyed powerful earnings leverage from surging turnover. As the KOSPI set successive record highs, average daily trading value rose to KRW 84.4trn in April (including ETFs) and KRW 143.5trn in May. The picture changed in the second half.

Average daily turnover on the main board fell to KRW 25.77trn in August, down 48.8% from June and 30.2% from July, the lowest level of the year. According to FnGuide, the consensus third-quarter 2026 operating profit for KOSPI-listed brokers is KRW 2,189.5bn, a 45.6% decline from KRW 4,027.5bn in the prior quarter.

The rate backdrop is also unhelpful. The Korea Capital Market Institute projected the 10-year government bond yield to hover around the low 4% range, with upside risks dominant given renewed inflation and global tightening concerns. Competitively, funding licenses have become a new axis.

IMA operators must invest at least 70% of pooled client money in corporate-finance-related assets, and combined with issued notes may raise funds up to 300% of equity capital.

Securities firms' share of retirement pension reserves rose from 20% in 2019 to 26.5% in 2025, though new entrants are expected to intensify competition. Brokers are also pursuing inbound foreign investor flows and overseas local brokerage to defend market share.

Outlook

Management has framed the successful launch of IMA as its top 2026 priority. On 18 March 2026 the Financial Services Commission designated NH Investment & Securities a comprehensive financial investment business operator with equity capital above KRW 8trn.

Its first product, 'N2 IMA1 Mid-Term No.1', went on sale on 31 March with a 4.0% annual benchmark return. In August it offered a third tranche of KRW 120bn between the 18th and 24th with the benchmark return raised to 4.5% and a maturity of two years and three months.

If the third tranche sells out, cumulative IMA funds raised would reach KRW 640bn, according to media reports. Regulatory obligations grow alongside. IMA operators must invest a set share of raised funds in venture capital assets, rising in stages from 10% in 2026 to 20% in 2027 and 25% in 2028.

In the pension and retail channel, the firm flagged a September launch of individual investor treasury bonds (10-year and 20-year) for DC and IRP retirement accounts, with pre-subscription alerts running from 31 August to 8 September. The first subscription window runs from 9 to 15 September.

The direction of second-half earnings ultimately hinges on how far wealth management, IB and net interest income can offset the brokerage decline, and industry observers likewise expect non-brokerage performance to determine second-half results.

Coverage of the company's results also noted that, with first-half brokerage fees more than tripling year on year, a drop in market turnover could slow the pace of profit growth.

Valuation

PER

6.5×

PBR

0.9×

ROE

16.1%

EPS

₩4,092

BPS

₩28,784

Dividend per share

₩1,300

Depending on the calculation basis (in-house versus exchange-published figures), the price-to-book multiple sits both slightly below and slightly above one times net assets, leaving the stock in a zone that is hard to characterize as either a large premium or a large discount to book.

The earnings-based multiple has compressed as profit over the latest four quarters exceeded the confirmed full-year 2025 figure - a function of a larger denominator, and therefore something that can reverse if turnover slows.

The dividend yield screens above the KOSPI average, consistent with the company's record of maintaining a high payout ratio relative to parent-only earnings. Broker views have moved in opposite directions: Daishin Securities in a report dated 8 June 2026 assigned a BUY rating with a target price of KRW 45,000.

By contrast, iM Securities in August 2026 cut its target price from KRW 41,000 to KRW 35,000 to reflect slowing trading volumes.

In the same report, iM Securities projected the company would keep its total shareholder return ratio above 40% to meet high-dividend company criteria, and said that even if profits shrink it could defend dividend levels by raising the payout ratio as it has in the past.

The valuation debate thus converges on where the durability of the earnings step-up meets the consistency of dividend policy.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Broad-based growth across all divisions

First- and second-quarter 2026 operating profit of KRW 636.7bn and KRW 681.2bn, with net profit to owners of KRW 475.7bn and KRW 489.6bn, far exceeded prior quarters.

Coverage of the results judged that while brokerage strength contributed most, the simultaneous increase in product distribution fees and IB income was meaningful.

The chief executive also emphasized a qualitative change in the earnings mix, noting that product distribution fees more than doubled year on year alongside sustained IB leadership. Less reliance on a single division leaves room to absorb part of the turnover cycle's amplitude.

IMA and issued notes as a funding license

IMA business is limited to firms with at least KRW 8trn of equity capital, and only three are licensed today. Having run an issued-note business since its 2018 license, the company now adds IMA, widening its funding base and enabling asset expansion into corporate and structured finance.

After the first two tranches sold out, the third raised the benchmark return to 4.5%, and the firm said it expects continued demand from corporates and high-net-worth clients. If the funding-to-investment spread holds steady, this can become a revenue stream less correlated with market turnover.

A consistent shareholder return record

In a February 2026 report, Shinhan Investment said that while peers were turning more conservative on shareholder returns, NH Investment & Securities stood out for maintaining an assertive stance, backed by the capital capacity and policy consistency of a financial-holding subsidiary.

In an August 2026 report, iM Securities projected the company would keep its total shareholder return ratio above 40% to meet high-dividend company criteria. Equity expanded from KRW 7,228.1bn in 2022 to KRW 9,438.1bn in 2025, enlarging the base from which returns are funded. That said, the size of returns is determined each year by board and shareholder resolutions.

Bear factors

Sharply lower turnover and the peak-earnings debate

Average daily turnover on the main board fell to KRW 25.77trn in August, down 48.8% from June and 30.2% from July, the lowest of the year.

A Yuanta Securities analyst said that, given the drop in turnover, second-quarter results likely marked the peak for brokers and that second-half brokerage income is likely to fall below first-half levels. Consensus third-quarter operating profit for the sector is also expected to fall 45.6% quarter on quarter. With first-half brokerage fees more than tripling, the base effect now works in the opposite direction.

Bond trading pressure in a rising-rate phase

The company said bond trading conditions grew more volatile in the second quarter of 2026 as market rates rose.

The Korea Capital Market Institute expects the 10-year government bond yield to fluctuate around the low 4% range with upside risks dominant amid renewed inflation and global tightening concerns. iM Securities, in an August 2026 report, also expected bond-related results to be somewhat difficult while equity, derivative and non-marketable corporate finance gains would compensate.

Given the large weight of bonds in brokers' balance sheets, the rate path is a core swing factor for trading income.

Rising leverage and a late start in IMA

Total liabilities rose to KRW 73,947.3bn in 2025 as the debt-to-equity ratio climbed from 668.9% to 783.5%, while operating cash flow was KRW -5,421.6bn.

Combined IMA and issued-note funding capacity of up to 300% of equity capital leaves ample room for asset growth, but also raises the burden of asset quality management. Peers launched IMA products first and gathered substantial funds, raising the possibility that waiting cash in the market has been partly absorbed.

It is also relevant that IMA obliges the broker to repay principal at maturity while investor returns vary with investment performance.

Risk factors

Market and turnover risk

Brokerage, product distribution and margin-loan interest income all track equity market direction and turnover. Average daily turnover slipped from about KRW 50.35trn in June to roughly KRW 36.88trn in July as volatility spiked.

A KB Securities analyst noted that accumulated fatigue from extremely high volatility could drive retail investors away. In a shrinking-turnover phase, market share gains become the key variable for defending profits.

Credit and asset quality risk

Funds raised through IMA and issued notes are deployed into corporate loans, corporate bonds and acquisition finance. Mandatory venture capital allocation rises from 10% in 2026 to 20% in 2027 and 25% in 2028, so the share of higher-risk assets increases in stages.

Eligible venture capital assets include securities issued by small, mid-sized and venture companies as well as bonds rated A or below. An economic slowdown or stress in specific industries could translate into valuation losses and higher provisions.

Governance, internal control and regulatory risk

The company reorganized its leadership and strategy under a co-CEO structure in 2026 and must simultaneously build out product design, asset allocation and loss-provisioning frameworks alongside its IMA license.

Reporting suggested that splitting responsibility across sales and deals, long-term assets and institutional business, and risk management and internal control may suit the IMA era better. One outlet flagged internal control and digital channel improvement as outstanding tasks.

Shifts in regulators' productive-finance policy direction and supervisory intensity could also affect business plans.

What to watch next

9-15 September 2026
The first subscription window for retirement-pension individual investor treasury bonds. It offers an early read on new product demand in the pension channel and on DC and IRP account inflows.
Early October 2026
Time to check September average daily turnover published by the Korea Exchange and the trend in the company's brokerage market share. Whether volumes rebound after August's sharp drop will shape third-quarter results.
Late October to early November 2026
The window for third-quarter results. The key check is how much of the brokerage decline was offset by wealth management fees, IB fees, net interest income and non-marketable asset valuation gains.
Fourth quarter 2026
Watch the size and benchmark returns of follow-on IMA tranches, plus asset sourcing plans ahead of the 2027 increase in mandatory venture capital allocation to 20%. The gap between funding cost and investment yield will determine profitability here.
Around February 2027
Full-year 2026 results and the finalized year-end dividend and shareholder return plan. This allows a comparison against iM Securities' August 2026 projection that the total shareholder return ratio would stay above 40%.

Overall view

NH Investment & Securities' recent results show a clear expansion phase.

Consolidated operating profit rose from KRW 521.4bn in 2022 to KRW 1,420.6bn in 2025 and net profit to owners from KRW 303.4bn to KRW 1,031.6bn, while first- and second-quarter 2026 operating profit of KRW 636.7bn and KRW 681.2bn with net profit to owners of KRW 475.7bn and KRW 489.6bn marked another step up.

As shown by first-half brokerage fee income rising 211.7% year on year and product distribution fees 127.2%, the primary driver was the equity market boom. The issue is that this driver weakened in the second half: August average daily turnover on the main board fell 48.8% from June to the lowest level of the year.

Candidates to fill the gap include IMA, built on the comprehensive financial investment operator status above KRW 8trn in equity capital granted in March 2026, issued notes, and the wealth management and pension channels, where funding-to-investment spreads and asset quality will decide actual outcomes.

At the same time, with the debt-to-equity ratio rising from 668.9% in 2024 to 783.5% in 2025, the flip side of greater leverage deserves attention.

Bullish factors (broad-based divisional growth, funding licenses, a shareholder return record) and bearish ones (slowing turnover, bond trading in a rising-rate phase, a late start in IMA competition) are finely balanced. This report is for informational purposes and contains no buy or sell recommendation or target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.