Foreign brokerages operating in South Korea have reported a drastic fall in their earnings in 2019, with their commission income falling sharply as domestic rivals chewed on their market share.

The five securities arms of foreign investment banks -- Credit Agricole, BNP Paribas, Deutsche, Hong Kong and Shanghai Banking Corp. and UBS -- disclosed that they saw over a 30 percent drop in their annual earnings, according to the Korea Financial Investment Association.

The latest was France-based Credit Agricole Securities’ Seoul Branch, with operating profit last year falling 56 percent on-year to 1.9 billion won ($1.5 million). Its net profit climbed down 34 percent to 2.9 billion won.

This came in the wake of a similar disclosure earlier in March by Switzerland-based UBS Securities’ Seoul branch, whose operating income shrank 60.1 percent and net income dipped 72.5 percent in 2019 from a year earlier. UBS cited a fee cut from stock trading.

BNP Paribas Securities Korea’s operating and net profit both reduced over 70 percent on-year.

Earlier in February, Deutsche Securities Korea said it had recorded losses in its first year of shutdown in equities sales and trading business. Deutsche also cited the delay in completing acquisition deals.

Meanwhile, HSBC’s Seoul securities branch said its increased income from commissions was dwarfed by expenses, leading to a 60 percent cut in operating income on-year.

ING Securites stood out as the exception, turning around from a 1 billion won net loss in 2018.

This general decline in earnings came in line with Korean brokerage houses’ trend of cutting trading commissions in an escalating price competition.

According to data compiled by the Financial Supervisory Service, Korean brokerages’ commission income fell 2.3 percent on-year in 2019, dropping by nearly 24 percent.

As of last year, 23 local units of foreign securities firms were operating in Korea.

By Son Ji-hyoung (consnow@heraldcorp.com)