Greetings everyone. I am Mirae Asset Securities ESG and IR Team Leader, Dongho Shin. Thank you everyone for taking part in Mirae Asset Securities 2025 Q1 business results earnings call. We have here with us Mirae Asset Securities Business Innovation Division Head and CFO, Kanghyok Lee, and we are providing English simultaneous interpretation for overseas investors. The agenda for today's conference call will be first, Mirae Asset Securities 2025 key strategies, Q1 business results and performance for each business, followed by a Q&A session. 2025 Q1 business presentation materials will be uploaded on our regular report menu at our website, ci.securities.miraeasset.com. A recorded version of today's conference call will also be uploaded on our website as well, and a script will also be uploaded as well.
The contents of this conference call includes forecast information based on the current writing of this data. Please note that the actual business performance may differ due to changes in the business environment and strategy revisions. We will now hear from the CFO. Please refer to page two of the business results.
Greetings everyone. I am Kanghyok Lee, Head of the Business Innovation Division. First, let's go to page two of the earnings presentation materials. Our 2025 key strategies are first, global WM and pension-focused enhancement of profit generation capabilities. Second, increase global business profitability. Third, strengthen AI competitiveness, and fourth, enhance shareholder value. Let's go to page three of the materials. It is the highlights, 2025 Q1 consolidated pre-tax income posted KRW 346.1 billion and net income posted KRW 258.2 billion . You can see that it was a 53% increase QoQ.
2025 Q1 end consolidated equity capital posted KRW 12.2 trillion and consolidated ROE posted 8.5%. Next, to briefly summarize 2025 Q1 key performance highlights. First, overseas brokerage revenue posted a quarterly record high of KRW 101.2 billion , and total brokerage revenue posted KRW 198.7 billion. Second, WM revenue also posted a quarterly record high of KRW 78.4 billion . In case of overseas subsidiaries, revenue growth in developed markets as well as a valuation assessment increase of investment assets led to a quarterly record high performance of KRW 119.6 billion of pre-tax income. Lastly, in the case of assets for investment purposes, it was reflected in innovative companies investment position valuation gains, and the total net income recorded around KRW 90 billion and turned to profit. If needed, please refer to page four at a later time, which is an executive summary of our performance.
Next, I will cover detailed performance for each business. First, I would like to walk you through brokerage performance. Please refer to page five of the earnings presentation. Brokerage revenue posted KRW 198.7 billion , a 10% growth QoQ. Domestic stock market average daily trading volume posted KRW 18.4 trillion , a 15% increase QoQ. Domestic stock commission revenue also posted KRW 97.5 billion , an 11% increase QoQ. Overseas brokerage commissions revenue posted KRW 101.2 billion , around 9% increase QoQ. This was due to the expiration of the zero commission promotion for overseas stock trading at the end of 2024. Overseas stock balance, due to the impact from U.S. stock market decline, posted KRW 34.5 trillion , a 15% decrease. Next, I will go over WM performance. Please refer to page six. Q1 WM revenue posted KRW 78.4 billion , an 11% increase QoQ.
Mutual fund and wrap account revenue each increased 16% and 17% QoQ respectively, and had a positive influence on the overall WM performance. In particular, there were notable performances in our wrap products. This was on the back of client return increase, as well as related revenue growth through wrap account portfolio rebalancing following the market environment changes. WM balance posted a similar level to the previous quarter, posted KRW 191.5 trillion, and total client assets, including brokerage assets, posted KRW 405.3 trillion. Pension assets that we focus on posted KRW 44.4 trillion, a 4% growth QoQ, and showed a continuous upward trend. In the case of retirement pension, Q1 reserves grew around KRW 1.3 trillion and achieved number one in the industry. This is around 23% of the total 42 retirement pension providers' reserve growth.
In particular, in the case of individual pension, DC, IRP, and personal pension posted KRW 38.4 trillion, a 5% increase QoQ. Going into detail, on a QoQ basis, we see increase around KRW 500 billion, IRP increased KRW 1.2 trillion, and Personal pension increased around KRW 400 billion respectively. The pension money moves that began with the pension transfer has accelerated, gaining overwhelming support from individual subscribers. The background behind this was systematic risk diversification and differentiated strategy for services, including industry's largest product lineup and a subscription-based MP service grounded in global asset allocation. In addition, in order to put into practice customer-centered investments philosophy and to provide a more convenient investment environment through differentiated digital innovation, we will establish an AI-based retirement pension robo-advisor discretionary service, systematic ETF purchase plan, and mobile app trading system for exchange traded bonds, and provide these services to retirement pension clients.
Going forward, we will continuously strive to do our best so that we can close the gap that we have. Mirae Asset Securities is actively utilizing AI across all areas, including investment information provision, asset management, stock recommendations, and content creation. Centering on the PWM, which was set up late last year, we will faithfully execute our plan to significantly enhance the quality of ultra-high-net-worthy asset solutions. Since we expect global uncertainties to continue for the time being, we will be committed to protecting client returns through an active global asset allocation strategy. In particular, focusing on WM clients, we are currently promoting rebalancing for differentiation of client asset portfolio, shifting from a U.S.-centric portfolio to one that includes high-quality stocks from both the U.S. and China, and India's high-quality stocks, as well as domestic and international bonds expected to appreciate in prices.
Next is trading performance on page seven of the earnings release. Our trading income includes the income gained in bonds, derivatives, and traditional trading, and also income from S&T and PI. Total trading income was up 81% from last quarter, recording KRW 325.7 billion, and from this the distribution and dividend revenue was up 51% QoQ to KRW 119 billion. In Q1, the tariff policies leading to possible economic downturn and inflation, among other concerns over the economy, led to a strong U.S. Treasury bond rate. Meanwhile, the Korean policy rate was cut 25 BP, lowering market rates, and this provided favorable conditions for fixed income investment. As of the end of Q1, our bond balance was down 8% YoY at KRW 36.3 trillion. With much market volatility, we will continue with cautious bond investment strategy to respond to the market conditions.
As for one of our major revenue sources of flow trading business, for example, the ETF and LP business is continuing to generate stable revenue. SLPI, the Hong Kong and India subsidiaries networks helped our participation in global IPOs and block deal investment, enhancing access to overseas markets. This year, in anticipation of uncertainties in the world economy, we plan to launch new products such as a global long short ETN. Next for investment assets, the Q1 fair value valuation performance. In the last earnings call Q&A, I touched upon overseas commercial real estate that potentially might face issues this year. As I explained in Q1, that asset recognized KRW 100 billion in losses.
Notwithstanding the losses in commercial real estate, our previous investment in overseas innovative company saw appreciation in equity value and overall fair value gain recorded KRW 90 billion, hosting a turnaround to profit in Q1. We would cautiously say that the losses from overseas commercial real estate, which had negatively impacted our performance for the past two years, are now mostly already recognized, and our existing proactive investments in overseas AI innovative companies and other asset classes, if they see valuation increases, we soon expect to see contribution to our revenue. Next is IB performance on page eight of the earnings release. In Q1, the IB commission revenue is down 21% QoQ to post KRW 34.2 billion. For IPOs in Q1, we led SGI, LG CNS, and a total of eight IPOs.
In our deal pipeline, we have the cosmetics brand d'Alba Global and the base oil and lubricant manufacturer SK Enmove. At the end of 2018, we established a PE to acquire interest in LX Pantos, which we recently sold, and the profit was reflected in Q1 performance. In our acquisition finance, we sold our equity stake in BMC Software and this revenue was recognized. For PE, we plan to carry on successful performance, and we are looking at the sustained proprietary market downturn to manage risk. We are closely watching the market as we also capture new investment opportunities. On the earnings release, our corporate loan revenue is included in interest income, and due to reduced balance, it was down 11% YoY to post KRW 23.6 billion. Next is overseas subsidiaries performance. This is on page nine of the earnings release.
For Q1 in overseas subsidiaries, a QoQ 116% growth to post KRW 119.6 billion pre-tax income was recorded, a record high quarterly performance. In particular, with specific strategies for each country, steady performance was realized mostly from WM and trading.
Including brokerage, WM accounted for 32% of revenue, trading and PI 50%, IB 7%, and others 10% of the revenue, and we demonstrated stable performance across the main business areas. In particular, the growth of overseas subsidiaries in this Q1 was mostly thanks to the increased revenue in or performance in advanced economies, just like last year, and valuation increases in the PI positions in AI innovation companies. The U.S. subsidiary is the only subsidiary from Korea with a local clearing license, and is consistently providing U.S. stock brokerage services. Also, our subsidiaries in major finance centers of New York, London, and Hong Kong are continuing to build foundations for the successful landing of global ETF, FPL, and flow trading business. India, Indonesia, Vietnam, and Brazil, the emerging markets showed sluggish stock markets, but we were still able to attain stable WM performance.
As for Mirae Asset Sharekhan, which became part of Mirae Asset last year, because of the general slowdown in the Indian market, the ongoing PMI since the acquisition, and the reshuffling of the organization from a local brokerage to a comprehensive asset manager, plus IB to a full service securities firm, its performance might be slow to pick up. Around the end of this year, we are expecting the organization to be fully reorganized and revenue to truly improve. As our overseas business proportion is gradually increasing, we are making efforts to step up internal controls and risk management at the overseas subsidiaries. Shareholder return policy. Last but not least, our particular focus on shareholder return policy. In February 2024, we announced our shareholder return policy, where we would, from 2024-2026, cancel 15 million common stocks and 1 million secondary preferred stocks every year.
In August 2024, we announced that we would cancel more than 100 million stocks accumulated by 2030 as part of our corporate value enhancement plan. Also, to provide more clarity on our shareholder return ratio, beginning last August, when buying back our shares, we are canceling the shares as well. On this past April 30, our parent company, Mirae Asset Capital, disclosed the decision to acquire KRW 100 billion of Mirae Asset Securities common stocks. With the current undervalue stock price, this is to attain stable control, and the purchase will continue through July 30. Mirae Asset Securities shareholder return policy based share buyback and cancellation will continue in H2 of this year. Mirae Asset Securities has diversified its business to attain on a long-term stability and scalability businesses to attain multiple sources of revenue. Overseas subsidiaries, WM, flow trading, and pension would be some examples.
Those performances might have been blinded by early losses, but they are now turning over to profit, and they're going to contribute to our income. So beginning this year, the stable and scalable overseas subsidiary flow trading pension and WM performances will truly shine, and we are going to continue to uphold our direction and continue to become a super gap-making securities company. That brings us to the end of my report on the earnings for Q1 2025 Mirae Asset Securities.
We will now take questions. If you have a question, please press star one on your phone. If you would like to cancel your question, please press star two.
Thank you for the opportunity. I have one question. It seems that in April, you had made it known that for IMAs and for different papers, notes, that you're going to have more activation. Are you going to apply for IMA approval in the second half of 2025?
Yes, I would like to answer that question. For IMA, as was mentioned in the previous earnings call, is a new type of financial investment product. We believe that only two securities companies, including ourselves, have the qualifications. We believe that it will help us greatly strengthen our WM competitiveness. Naturally, we will apply for approval in the second half. For IMA, as you know, is a principal guaranteed product and a portion of the loss provision must be recognized by the securities firm. From a risk management perspective, it requires a thorough review of specific product conditions, structure, and underlying assets. As was mentioned previously, Mirae Asset Securities want to provide different business models that can be expanded and are stable.
Regarding IMA, we believe that we will not hurry to quickly expand this in the early stages, but we will keep a close and steady watch and control the speed.
We will take the next question. Next question is-
Thank you for giving me the opportunity to ask a question. I actually have two questions. The first is overseas stock brokerage. We can see on the presentation, and I also heard in the call earlier, the zero fee event was over, and we consider the changes in the commission. We see that the market share has actually been well-maintained. In spite of the commission going up, I would like to know why you were able to maintain your market share within these market conditions. I also would like to know how, in the growing competition, you are going to carry out commission policies for overseas stocks.
My second question is about retirement pension. If you look at the retirement pension balance, we see the balance has went up around 20% YoY. It's rapidly growing. It's mostly growing in personal pension, and that was highlighted in the presentation as well. One thing that we look at when we're analyzing, in terms of retirement pension, the commission rate is very low for transactions, how it's going to impact your business in terms of profit, and in the mid to long-term view, how this is going to be used in terms of asset.
Thank you for those questions.
I'd like to answer those questions.
Regarding overseas stocks, in Q1, on a monthly average, overseas stock market share, based on balance, was 37%, and we were number one, for commission, our revenue, about 26%, again, number one, and in trading value, about 12%, probably placing us at number three. Especially for revenue-based market share, the monthly average of the previous quarter was 22%, we were able to post a four percentage points growth. This was, as was mentioned, because our overseas stock average commission rate went up from 10.1 BP in the previous quarter to 11.8 BP. As I said in the earnings report, this was due to the overseas stock zero fee event that began in the latter half of 2023, ended last year.
As I said in Q4 last year, we of course value our own income, but in the mid-to-long-term view, aim more to grow our clients' return rate and focus more on investment content and service differentiation. In 2024, U.S. major indices went up on average 22%. For the same period, our overseas stock clients' returns were up 60%. Based on these outcomes, we were able to earn much trust from our clients, which translated to our upholding our revenue market share. Going forward, instead of competing on commission rates, we will continue to focus on providing guiding services to grow our clients' returns. Regarding the retirement pension, in the retirement pension, our core competitive edge and the low commission rates for retirement pensions, what are our plans to deal with that situation? That was the question.
Our key competitive edge comes from the funds ETFs, REITs , OTC bonds, and a total of 1,800 instruments to choose from, the largest variety in Korea. Our principle of global asset allocation has been a rule that the Mirae Asset Group has set down to build a sound investment culture since a long time ago. This was a foundation for our early introduction of portfolio service or MP subscription service to encourage global asset allocation and robo-advisor services that allowed for data and algorithm-based, diverse, super-personalized portfolios. This managed both risks and returns in well-organized service offerings. I believe that that would be our core competitive edge. The low brokerage or the low commission rates in the pension business, and low profitability coming from that. I mentioned earlier in the presentation that the pension business is basically sort of a foundational industry.
There's a lot of costs that are incurred in the beginning, so it's difficult to gain a lot of returns in the short-term view. Not all securities companies can engage in that business. We have, at Mirae Asset, been investing in pension for 20 years, since 2005. The pension business is basically, its profitability comes from obtaining a certain amount of volume, and that's the nature of the pension business. The volume has to be grown first. I believe that we are nearing, we are approaching the BEP, the break-even point. I believe that this is what sets us apart from other companies. In terms of increasing profitability, a lot of efforts will have to be made going forward as well. The performance of dividend products which do not guarantee principal are going to be a core part of our strategy.
To better manage, we are actually very well managing the return rates of the clients, the non-principal guarantee product is seeing a lot of introduction of funds. I would say that we far surpass other companies in terms of growth rate of introduction of funds into our non-principal guaranteed products. If we continue on with this trend, not only for our pensions business, but Mirae Asset Securities business in general, we will be differentiated thanks to this. Next question, please.
Thank you for the opportunity. In Q1, I have a question about the fair value asset valuation regarding your investment assets. Please give us some more details. I know that you had a burden because of commercial real estate. Can you tell us about the outlook for losses caused by commercial real estate? Thank you very much.
Thank you for the question. Regarding the offsetting for investment assets, in this quarter, there were two overseas commercial real estate cases that led to about KRW 100 billion of losses. I would like to explain to you in detail about what these are, but related to the teams that manage these cases, if some details about the losses are made public, it can actually have a negative effect on negotiating terms. Please understand that I cannot give you more details about these cases. Those are my comments about the losses, and we mentioned that we turned a profit. Regarding equity investment for overseas innovative companies, we saw some profits, and it led to KRW 90 billion of gains and turned a profit. I think some of this was mentioned in the media, and I'm sure that many of you in the call know.
In this case as well, we do have a very strong NDA signed with the companies we had invested in. I cannot give you details about which companies we had invested in and how much we had invested in. I hope that you can understand my situation, and I think you can also look at some media reports as well. For real estate, I mentioned this in the previous earnings call that in Q1, we had some that was recognized significantly. Going forward, it will depend on the interest rate regime and other factors. Some factors might be involved, but we believe that the significant cases have been recognized. Regarding the overseas innovative companies that we had invested equities in, when we consider what has been announced, we believe that we will see some positive news.
We believe that in investment assets, it will have a positive impact on our P&L. Thank you very much.
In the interest of time, we would like to end the earnings call at this moment. If you have any other questions, they should be sent to Mirae Asset Securities ESG and IR team. Thank you for joining the 2025 Q1 Mirae Asset Securities earnings call. Thank you very much for participating.