Korean brokerages saw their foreign operations turn to net losses in the fiscal first half of 2010 from a year earlier due to increased sales and maintenance costs, the financial regulator said Tuesday.
The 47 foreign units of 19 local securities companies posted a combined net loss of $16.6 million in the April-September period, compared with a profit of $23.1 million a year earlier, according to a report by the Financial Supervisory Service.
The dramatic loss came as brokerages increased spending for sales and maintenance as part of efforts to expand overseas and beef up labor forces, the regulator noted.
Losses in commission charges also contributed to the turnaround to red ink, it added.
As of end-September, 19 local securities firms, including Woori Investment & Securities Co. and Hyundai Securities Co., operated 45 foreign brokerages, two overseas banks and 36 offices, which do not carry out financial transactions, according to the FSS.
Of the total foreign operations, 77 percent were located in the Asian region, mostly in China and Hong Kong, while the rest were in the U.S., Britain and Hungary.
As of end-September, the foreign units had a combined $1.3 billion in total assets, up 16.8 percent from a year ago, the regulator said.