Korean securities firms posted strong second-quarter profits in 2025, driving expectations for higher dividends as the KRX Securities Index fell only 1.3% over the recent one-month period through May 26, according to Korea Exchange data. Trading volumes surged 288% year-over-year in Q2 2025, with exchange-traded fund popularity boosting brokerage revenues and enabling firms to meet dividend income separate taxation requirements. Under regulations effective this year, firms must maintain a 25% payout ratio and increase dividends by at least 10% year-over-year to qualify for the tax benefit, prompting securities companies to raise payouts proportionally to profit growth.
Securities Firms Post Record Q2 2025 Profits on Trading Volume Surge
The top five securities firms—Mirae Asset Securities, Korea Investment Holdings, NH Investment & Securities, Samsung Securities, and Kiwoom Securities—are expected to report combined controlling shareholder net profit of 4.281 trillion won in Q2 2025, up 29% quarter-over-quarter, according to Meritz Securities forecasts. Q2 2025 stock market trading volume increased 288% year-over-year and 40% quarter-over-quarter, driving brokerage commission income. The KRX Securities Index declined 1.3% over the recent one-month period, outperforming the broader KOSPI, which fell below the 7,000 level after trading above 9,000.
Samsung Securities is projected to post Q2 2025 consolidated controlling shareholder net profit of 505.1 billion won, a quarterly record. Brokerages forecast 2026 dividends per share of 7,100 won, implying a 6.9% dividend yield based on the May 24 closing price. Kiwoom Securities is also expected to exceed 500 billion won in controlling shareholder net profit for the quarter. Korea Investment Holdings' Q2 2025 controlling shareholder net profit is estimated at 900 billion won, up 59% year-over-year, driven by brokerage fee income at subsidiary Korea Investment & Securities.
NH Investment Dividend Yield Projected at Mid-7% Following Q2 Results
NH Investment & Securities' expected annual dividend yield rose to the mid-7% range after its Q2 2025 earnings release. Brokerages project dividends per share between 1,850 won and 2,300 won for the year. The company's preferred shares, which closed at 24,350 won on May 24, offer a dividend yield as high as 9% based on the upper projection. Most securities and financial stocks qualify for dividend income separate taxation starting this year, requiring a 25% payout ratio and a minimum 10% year-over-year dividend increase. To maintain eligibility, firms must raise dividends proportionally to profit growth, fueling expectations that Q2 2025's earnings surge will translate into higher payouts.
Korea Investment Holdings' dividend yield is expected to rise to the mid-5% range, supported by subsidiary Korea Investment & Securities' brokerage revenue growth. Financial holding companies maintain projected dividend yields of 2–3%, primarily through share buyback programs, though increased non-interest income from securities subsidiaries has expanded distributable reserves.
KB Financial Allocates 700 Billion Won to Share Buyback Program
KB Financial announced a 700 billion won share buyback in the second half of the year, utilizing a portion of capital exceeding the 13.5% common equity tier 1 (CET-1) ratio threshold. The total buyback budget of 8,800 won—equivalent to 0.24% of 370 trillion won in assets—leaves 1,800 billion won potentially available for future dividend distribution, depending on profit levels and yield considerations. The allocation would raise the payout ratio to 26.4%.
Shinhan Financial Group maintains a CET-1 ratio of 13.4%, with quarterly dividends per share already set, though year-end dividends may increase based on Q4 performance, as occurred this year. Hana Financial Group raised cash dividends 10% year-over-year to 1.2 trillion won for this year and plans to offer tax-exempt dividends starting next year, effectively increasing investors' after-tax dividend yields.
FAQ
What dividend yield is NH Investment & Securities expected to offer in 2025?
NH Investment & Securities' expected annual dividend yield rose to the mid-7% range following its Q2 2025 earnings release, with brokerages projecting dividends per share between 1,850 won and 2,300 won. The company's preferred shares, which closed at 24,350 won on May 24, offer a dividend yield as high as 9% based on the upper projection.
Why are Korean securities firms raising dividends in 2025?
Securities firms are raising dividends to maintain eligibility for dividend income separate taxation, which requires a 25% payout ratio and a minimum 10% year-over-year dividend increase. Q2 2025 trading volumes surged 288% year-over-year, driving record profits and enabling firms to increase payouts proportionally to earnings growth.
How much did KB Financial allocate to share buybacks?
KB Financial announced a 700 billion won share buyback in the second half of the year, utilizing capital exceeding the 13.5% common equity tier 1 ratio threshold. The allocation leaves 1,800 billion won potentially available for future dividend distribution, which would raise the payout ratio to 26.4%.
