Korea’s securities industry saw its net profit decrease in the first half of this year due to lowered earnings from brokerages and proprietary trading, according to data from the Financial Supervisory Service on Monday.

The data showed that 62 securities companies’ net profit stood at 251.6 billion won ($235.7 million) in April-September for 2013, down about 63 percent from 674.5 billion won a year ago.

Their profitability measured by return on equity stood at 0.6 percent, down 1 percentage point in the same period.

Thirty-six of the 62 securities companies in Korea operated in the black, the financial regulatory agency said.

The FSS said that the fall in profit was mostly attributable to decreased earnings from proprietary trading and other brokerages, despite lowered management expenses.

The drop in earnings from proprietary trading was due to low market interest rates, which led to a loss in the value of the securities industry’s bond investment holdings.

Also, the brokerage sector saw a decrease in commission fees stemming from low earnings for deal sourcing and investment banking, the FSS data noted.

The securities industry managed to decrease spending in the first half of this year as it downsized their human resources and retail branches amid the slowdown.

The FSS said brokerage houses decreased their management costs by 253.6 billion won, or 6.3 percent, from almost 4 trillion won to 3.7 trillion won in the same period.

Their net capital ratio, a measure of firms’ indebtedness and liquid assets for financial soundness, increased 2.5 percentage points to 496.8 percent as of the end of September.

The increase in NCR, which was well above the regulatory requirement of above 150 percent, was due to an increase in their equity capital, the FSS said.

By Park Hyong-ki (hkp@heraldcorp.com)