Securities companies: Large firms profit, Small ones lose

Large-Cap Securities Companies Report Strong Profits in Q1 2025

According to the Ministry of Finance, in the first three months of the year, the stock market continued to grow positively, with the VN-Index rising about 3% compared to the end of 2024. The total market capitalization also increased year-over-year. Despite macroeconomic and market challenges, liquidity has improved, helping many stock groups rise more positively in price.

In March alone, average daily liquidity on the stock market reached around VND 22,000–23,000 billion per session, with some sessions hitting VND 44,000 billion—a relatively strong level compared to the multi-year average. This indicates that despite global market risks, listed companies—particularly securities firms—have seen growth, especially large-cap securities companies.

Leading in market share across all three exchanges with 16.94% on HOSE, VPS Securities reported a pre-tax profit of VND 918 billion, up 46%, even though its revenue declined 6% to VND 1,470 billion due to a 40% plunge in brokerage income. Margin lending profit rose 27% to over VND 500 billion, and proprietary trading grew impressively by 68% to VND 224 billion. Margin loan balance surged 47% to VND 18,340 billion.

SSI Securities, the largest in terms of market capitalization, posted a pre-tax profit of VND 1,017 billion, up 13% YoY. Operating revenue reached VND 2,100 billion (up nearly 10%), with securities trading contributing VND 1,040 billion, up 15%. As of now, its margin lending balance has grown significantly by 23.5% to VND 26,920 billion, surpassing the USD 1 billion mark. SSI maintained the second-largest brokerage market share on HOSE with 9.93%, behind VPS.

TCBS (Techcombank Securities) also reported a 9% increase in after-tax profit YoY, reaching VND 1,011 billion, thanks to a VND 334 billion (20%) rise in operating revenue, mainly driven by growth in margin lending and underwriting/issuance agency activities. Meanwhile, operating expenses dropped by VND 24 billion.

Vietcap Securities (VCI) recorded operating revenue of VND 850.93 billion, up 5.53% YoY. Management costs decreased by 24.84%, and after-tax profit rose 49.11% YoY to VND 294.87 billion—making it one of the highest profit growth firms in the quarter. Notably, Vietcap secured the 4th place in Q1 2025 with a 6.77% market share, affirming the effectiveness of its strategy to attract retail investors introduced in 2024.

MBS Securities, among the top 10 by market share, reported a Q1 profit of VND 269 billion, up 47% YoY, despite flat revenue.

A standout case is VIX Securities, a small-cap firm that saw revenue nearly triple to VND 980 billion, with 80% coming from financial investments, particularly proprietary trading.

These results suggest that most profitable SCs are in the large-cap group, which have aggressively raised capital in recent years. From 2021 to 2024, many firms increased their capital, notably those tied to banks like ACBS, VPBankS, TCBS, and LPBS. However, aside from TCBS, these firms have yet to reflect that capital growth in strong performance across brokerage and margin lending.

Small-Cap Firms See Profit Declines

In contrast to the booming performance of top-tier firms, small and mid-sized SCs are facing limited growth potential, rising capital costs, and increasing competitive pressures.

Declines in traditional services like brokerage, proprietary trading, and particularly bond issuance, have dragged down overall business performance.

Among the firms with published financial statements, those reporting lower profits include Guotai Junan (IVS), HD Securities (HDS), Dong A Bank Securities (DAS), and DSC, all seeing Q1 profits fall compared to the same period last year. Most reported declines in both revenue and profit. For example, IVS reported a 33% drop in profit to VND 4.13 billion; its brokerage revenue fell 34% to VND 2.8 billion, pulling overall results down.

DSC Securities posted Q1 pre-tax profit of VND 67 billion, down 10% YoY, mainly due to lower proprietary trading gains and heavier losses in brokerage, despite a 20% growth in margin lending income. CV Securities, despite improved revenue streams, still incurred losses due to brokerage costs of VND 7.5 billion and administrative costs of nearly VND 3.7 billion.

Although full reports are not yet available for all firms, in reality, most small SCs are experiencing losses or profit declines, especially in brokerage and due to high interest expenses on borrowed funds for margin lending—where they lack the competitive advantage enjoyed by bank-affiliated SCs. As a result, some experts believe it's time for smaller SCs to reconsider their business direction, especially amid current global uncertainties.

In fact, several solutions have been proposed. Besides focusing on core margin lending, many SCs are exploring niche strategies. Some firms have launched innovative products or services to attract investors—KBSV, for instance, introduced a stock-based savings product.

Investment banking (IB) is also being eyed as a key growth area, particularly in consulting on IPOs and state divestments, although this market remains relatively quiet. Additionally, strengthening research and analysis capabilities is a strategy pursued by many SCs to support their competitive positioning. With professional analyst teams and comprehensive updates, smaller securities companies hope to survive—not by directly competing in margin lending with large-cap peers, but by offering value-added insights and services.