Korean Banks Securities RoRWA to determine the 2Q winner

Research evidence excerpt

Korean Banks Securities RoRWA to determine the 2Q winner

11 June 2026

Korean Banks EquitiesCommercial Banks

Securities RoRWA to determine the 2Q winner Korea

◆ Korean securities firms operate a brokerage-oriented model; Jaewoong Won*

trading volume and margin loan balances are key indicators Analyst,The HongkongKoreaandFinancialsShanghai&BankingFintechCorporation Limited,

Seoul Securities Branch

◆ Following 1Q26, the higher RoRWA of Securities should jaewoong.won@kr.hsbc.com

+82 2 3706 8770

support earnings and capital ratios

Chan Park*

Research Associate, Korea Autos & Financials

◆ Prefer Buy-rated KB FG and Shinhan FG, given their higher The Hongkong and Shanghai Banking Corporation Limited,

Securities RoRWA chan.park@kr.hsbc.com

+822 3706 8713

Favourable conditions supporting strong earnings for securities subsidiaries

When we break down the revenue structure, brokerage fee/commission * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

income and interest income (including margin loan services) are the main revenue not registered/ qualified pursuant to FINRA regulations.

sources. These two items account for 70-80% of total revenue (Exhibits 2-3).

Accordingly, daily trading volume and margin loan balances are key indicators for

securities earnings. Under the Korean Capital Market Act, securities firms can

provide margin loan services up to total equity. Securities firms with larger equity

bases can therefore provide more margin loans. According to news reports, most

securities firms’ margin loans are now fully capped (Yonhap, 11 May 2026). In

addition, following 1Q26, daily trading volume and margin loan services have

remained at record-high levels throughout April and May (Exhibits 4-5).

Soaring brokerage revenue to boost Securities RoRWA