China brokerages' 2015 profits soar despite mid-year stocks slump
[SHANGHAI] Some of China's brokerages have reported that their preliminary net profit growth for 2015 more than doubled from the previous year, demonstrating they were able to successfully negotiate the months-long stock market turmoil that began in mid-June.
Since the Chinese stock market tumbled more than 40 per cent in summer last year, brokerages have faced a clampdown on margin financing, a temporary suspension of listings and regulator probes for allegedly illegal activities.
But these have not weighed down broker profits, which have risen on new account openings and margin finance gains, according to the preliminary 2015 results this week of some brokers.
Shenwan Hongyuan and Founder Securities , both among China's top-ten listed brokerages by market capitalisation, said their unaudited 2015 net profit was up 168.2 per cent and between 100 to 160 per cent, respectively, compared to the prior year.
Smaller outfits Guoyuan Securities, Northeast Securities, Guolian Securities and Changjiang Securities reported preliminary unaudited profits of between 100 to 148 per cent.
Guolian said on Monday its profit growth was partly due to the use of the Internet, significant account growth and margin trading profits.
China's largest broker CITIC Securities is one brokerage which has been under increased scrutiny after the stocks slump. In December, CITIC said was unable to contact two top executives, following media reports they had been asked by authorities to assist in an investigation.
In August, the official Xinhua news agency reported four senior CITIC officials had confessed to insider dealing.
CITIC said in December its profit for 2015 will be lower due to bad-debt losses.
The brokerages usually release final results in the weeks after the preliminary results are disclosed.
REUTERS
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