Meritz Financial Group Q3 Net Profit Falls 26.6% to KRW 490.5 Billion on Weaker Investment Income

Meritz Fire & Marine Insurance Net Profit Down 29.2%
Meritz Securities Net Profit Up 3.2%
Third-Quarter Cumulative Net Profit: KRW 1.9621 Trillion, Down 3.2%
Stock Valuation Losses Weigh Despite Improved Insurance Profit

Meritz Financial Group posted weak earnings in the third quarter of 2026 as investment income declined amid increased volatility in financial markets. Despite improved insurance profits at its flagship subsidiary, Meritz Fire & Marine Insurance, and higher net profit at Meritz Securities, stock valuation losses and other factors weighed on the group’s overall profitability.

According to Meritz Financial Group on November 11, its consolidated net profit for the third quarter of 2026 was KRW 490.5 billion, down 26.6% from the same period a year earlier. Compared with KRW 791.4 billion in the previous quarter, the second quarter, it fell 38.0%. Operating profit for the same period was KRW 519.9 billion, down 39.7% year on year. Revenue, however, rose 78.2% to KRW 13.1348 trillion.

As a result, cumulative net profit for the first three quarters of 2026 was KRW 1.9621 trillion, down 3.2% from KRW 2.0268 trillion in the same period last year. Cumulative operating profit also fell 7.6% to KRW 2.3423 trillion. Cumulative revenue, however, rose 95.2% to KRW 48.7122 trillion.

The earnings decline was affected by weaker investment income amid increased volatility in financial markets. Although profitability improved in the insurance business, stock valuation losses stemming from stock market volatility are seen as having reduced overall net profit.

A Meritz Financial Group official said, "Meritz Fire & Marine Insurance saw its insurance profit increase, but investment profit fell significantly due to stock valuation losses caused by stock market volatility. Meritz Securities, meanwhile, posted higher earnings thanks to strong asset management and increased interest income, while expenses such as selling and administrative costs also rose."

Meritz Fire & Marine Insurance, the group’s flagship subsidiary, posted standalone net profit of KRW 328.5 billion in the third quarter of 2026, down 29.2% year on year. Its cumulative net profit for the first three quarters was also KRW 1.3528 trillion, down 6.8% from the same period last year.

However, growth in its core insurance business continued. Meritz Fire & Marine Insurance’s cumulative insurance profit for the first three quarters was KRW 1.1022 trillion, up 7.6% year on year. Sales from new long-term indemnity insurance policies also increased 15.6% to KRW 105.6 billion.

Profitability-focused growth in the long-term insurance business, along with improved profits in the general and auto insurance businesses, contributed to the results. General insurance maintained solid performance on the back of continued sales growth, while auto insurance remained profitable, helped in part by a lower accident rate.

Nevertheless, despite improved insurance profit, investment profit fell sharply due to stock valuation losses amid stock market volatility, causing overall net profit to decline from a year earlier.

A Meritz Fire & Marine Insurance official said, "Strengthening our competitiveness in our core business, including profitability-focused growth in the long-term insurance business and improved insurance profit, drove our overall results."

Meritz Fire & Marine Insurance’s investment return on managed assets stood at 5.0% at the end of the third quarter, while its preliminary solvency ratio (K-ICS) was 225.7%.

Meritz Securities, by contrast, continued to post net profit growth. Its consolidated net profit for the third quarter of 2026 was KRW 206.4 billion, up 3.2% year on year. Cumulative net profit for the first three quarters was KRW 720.5 billion, up 12.0% from the same period last year.

The company maintained solid performance in its corporate finance business, completing tailored structured finance transactions for large corporations. Its asset management business also delivered solid results despite increased market volatility. The retail business likewise recorded stable performance, supported by an expanded customer base.

However, the burden of expenses such as selling and administrative costs increased despite stronger asset management performance and higher interest income.

A Meritz Securities official said, "We will pursue qualitative growth in our retail business by leveraging our expanded customer base and competitive digital platform, while strengthening synergies with our corporate finance and asset management businesses to secure sustainable growth drivers."

Meanwhile, Meritz Financial Group’s total assets stood at KRW 146.4973 trillion at the end of the third quarter, up 8.1% from the end of last year. Its return on equity (ROE) was 23.5%.

This content was produced with the assistance of AI translation services.