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4 out of 10 financial investment firms suffer capital erosion
2012.12.03 15:53:00
Four out of South Korea’s 10 financial investment companies, including securities brokers, asset management and investment advisory companies have seen their total capital is less than their paid-in capital as they continued to incur losses over the past few years.

[4 out of 10 financial investment firms suffer capital erosion] 기사의 본문 이미지

124, or 42.5 percent of the total 292 securities, asset management and investment advisory companies were in capital erosion as of end-September, according to the Financial Supervisory Service (FSS) and the Korea Financial Investment Association (KOFIA) Monday. They are nine of 61 securities firms (14.8 percent), 34 of 82 asset management firms (41.5 percent) and 81 of 149 advisory companies (54.4 percent).

Securities companies suffering from capital erosion include Korea RB Securities (a capital erosion ratio of 53.7 percent), ING Securities (51.3 percent), RBS Asia (29.3 percent), Apple (27.9 percent), Barclays Capital (22.0 percent), Hanmag Securities (20.3 percent), Standard & Chartered Korea (4.2 percent) and Taurus (3.7 percent).

Among the asset management companies, the largest capital erosion ratio was reported by Ask Veritas with 74.9 percent, followed by RG Energy Resource (74.8 percent), Hanjoo Asset Management (67.2 percent), Frontier (51.2 percent), Black Rock (47.5 percent), Ascendas (44.4 percent) and GS (43.4 percent).

Half of investment advisory firms had impaired capital. The capital erosion ratio exceeded 50 percent in 19 companies including Rich (99.7 percent), Delight (84.1 percent), Inport (81.1 percent), Prism (79.0 percent) and Megamidas (77.3 percent).

Capital erosion became prevalent after the European fiscal crisis. As of the end of September of last year, 38.7 percent or 109 of 282 financial investment firms were in capital erosion.

[Written by Ji-hye Hwang / edited by Soyoung Chung]


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