How Mirae Asset manages to become a rising star of brokerage world

Mirae Asset Securities Vietnam continues to see a sharp rise in outstanding loans for securities investment, according to the company’s financial report for the first quarter this year.

The amount of loans and advances for investors reached $200 million, an increase of over $43 million or equivalent to 22 per cent compared to the beginning of the year.

Mirae Asset started boosting lending since the end of 2018 and within one year, it has increased lending by four and a half times. As a result, Mirae Asset has become the second biggest margin lender in Vietnamese securities market after SSI.

The company’s loan outstanding balance has increased rapidly in the context that most other securities companies are slowing down lending.

SSI for instance lent a total $260 million by the end of the first quarter, unchanged compared to the beginning of the year.

Securities companies are getting more cautious in lending as they see unfavourable development of the local stock market with share prices facing negative outlook.

Such securities companies as VNDirect, MBS and VDSC reduced lending in the first quarter.

Ho Chi Minh City Securities Joint Stock Company saw an increase of 15 per cent in lending, to reach $164 million, but the amount is still far behind Mirae Asset’s despite its higher brokerage market share.

As a result of increased lending, Mirae Asset saw a remarkable rise in interest from loans and receivables in the first quarter. The company earned $4million in profit from lending activities, nearly tripling the amount of the previous year.

The company also maintained an after-tax profit of $3.6 million.

Mirae Asset has been able to boost lending owing to its increased financial strength. It has raised charter capital from $100 million to the current $187 million and become one of the biggest securities companies in terms of charter capital.

Mirae Asset has managed to mobilize low-cost capital from foreign banks, mainly Korean such as KDB, Woori Bank, Shinhan Bank and KEB Hana.

Its cash flow report showed that last year the company mobilized from banks a total of over $455 million. By the end of the year, the short-term loan balance was $78 million.

These loans, which are guaranteed by its mother company Mirae Asset Securities (HK) Limited and its deposits at banks with book value of $47 million, have the interest rates from 2.14 per cent to 4.9 per cent per year.

Mirae Asset has expanded its brokerage business by increasing brokerage staff, opening more branches and intensifying marketing activities.