KB Securities, NH Investment Hit as Korea Fines 10 Brokerages ₩1.38 Trillion Over Treasury Bond Bid Rigging
KB Securities, NH Investment & Securities and Mirae Asset Securities top the list of 10 South Korean brokerages fined a combined ₩1.376 trillion (about $1 billion) by the Korea Fair Trade Commission (KFTC) for colluding in government bond auctions. Including five banks, the total penalty reaches ₩1.6266 trillion, one of the largest in Korea's financial sector.
The KFTC announced the decision on November 11, 2026. It found that from January 2020 to June 2023 the institutions agreed in advance, or shared information, on the yields and volumes they would bid when buying Korea Treasury Bonds (KTBs) at auction, raising the government's interest costs.
The fines will weigh on second-half earnings, but NH Investment & Securities said in a Nov. 12 note that the sector's low valuations and high dividend yields still make Korean brokerage stocks attractive for long-term investors.
At a glanceTotal fines: ₩1.6266 trillion (10 brokerages ₩1.376 trillion, 5 banks about ₩250.6 billion)Largest: KB Securities ₩332.2 bn, NH Investment & Securities ₩242.8 bn, Mirae Asset Securities ₩214.8 bnPeriod of collusion: January 2020 to June 2023KB Securities' Q3 net profit revised from ₩273.0 bn to a ₩59.1 bn lossSector PBR about 0.7x; 2026E dividend yield of key high-dividend names about 9%
Key Takeaways
- Record-scale penalty: The KFTC fined 10 brokerages and 5 banks ₩1.6266 trillion for rigging KTB auction bids between 2020 and 2023. Brokerages account for ₩1.376 trillion.
- Earnings revisions have begun: KB Securities and Kiwoom Securities booked the full fines in third-quarter results and corrected their preliminary earnings. Other firms may follow in Q3 or Q4.
- Valuation case intact: NH Investment & Securities says the sector, at about 0.7 times book value with roughly 9% expected dividend yields for major high-dividend names, remains undervalued even after the extra costs.
Which Brokerages Were Fined, and How Much?
The KFTC's announced fines, by firm (from largest):
| Rank | Institution | Type | Fine (announced) |
|---|---|---|---|
| 1 | KB Securities | Brokerage | ₩332.2 bn |
| 2 | NH Investment & Securities | Brokerage | ₩242.8 bn |
| 3 | Mirae Asset Securities | Brokerage | ₩214.8 bn |
| 4 | Shinhan Securities | Brokerage | ₩147.3 bn |
| 5 | IBK Industrial Bank of Korea | Bank | ₩135.8 bn |
| 6 | Daishin Securities | Brokerage | ₩120.1 bn |
| 7 | Samsung Securities | Brokerage | ₩118.9 bn |
| 8 | Kiwoom Securities | Brokerage | ₩83.8 bn |
| 9 | Meritz Securities | Brokerage | ₩64.6 bn |
| 10 | Korea Development Bank (KDB) | Bank | ₩62.3 bn |
| 11 | Korea Investment & Securities | Brokerage | ₩37.9 bn |
| 12 | Hana Bank | Bank | ₩25.5 bn |
| 13 | NH NongHyup Bank | Bank | ₩23.0 bn |
| 14 | Kyobo Securities | Brokerage | ₩13.7 bn |
| 15 | KB Kookmin Bank | Bank | ₩3.9 bn |
Source: Korea Fair Trade Commission, NH Investment & Securities Research. Bank total calculated from the chart figures.
According to media reports cited in the NH note, Samsung Securities and Shinhan Securities qualify for the leniency program, which reduces penalties for firms that self-report. Their actual payments are therefore expected to be lower than the announced amounts.
What Did the KFTC Find?
The regulator concluded that the 15 institutions coordinated bid yields and purchase volumes, or exchanged that information, when bidding for newly issued government bonds over about three and a half years. Higher winning yields mean the government pays more interest on its debt, which the KFTC treated as harm from the collusion.
Will Brokerages Fight the Fines?
The financial firms argue the penalties are excessive because they were calculated on the value of bonds purchased rather than on the profits actually earned. However, late payment triggers additional charges, so NH expects most firms to pay first and then challenge the fines in court.
How Will the Fines Hit Third-Quarter Earnings?
The costs are likely to be recognized in either the third or fourth quarter.
| Company | Q3 consolidated net profit (preliminary) | Q3 net profit (revised) |
|---|---|---|
| KB Securities | ₩273.0 bn | -₩59.1 bn (swing to loss) |
| Kiwoom Securities | ₩238.6 bn | ₩177.8 bn |
KB Securities and Kiwoom Securities have already booked the full fines in Q3 and corrected their preliminary results. Other financial companies may also revise their announced Q3 figures or book the cost in Q4.
Are Korean Brokerage Stocks Still a Buy?
NH Investment & Securities analyst Yoon Yu-dong wrote that the fines add to an earnings slowdown already expected for the second half, increasing near-term pressure. But he pointed out that:
- The Korean securities sector trades at a price-to-book ratio (PBR) of about 0.7x.
- Major high-dividend brokerage stocks offer an expected 2026 dividend yield of about 9%.
- Share prices have already corrected sharply on worries about a slowing business environment.
His conclusion: the undervaluation appeal remains valid even after the extra costs, and investors should focus on the lower share prices and dividends rather than the size of the second-half profit decline, keeping a mid- to long-term view.
Note that NH Investment & Securities, the author of the report, is itself the second-largest fine recipient (₩242.8 billion).
ETF Checkpoint: Korean Securities-Sector ETFs
- Korea-listed securities-sector ETFs hold many of the fined brokerages, so the fines and earnings revisions flow directly into their holdings. Check each fund's top weights for listed names such as NH Investment & Securities, Mirae Asset Securities, Samsung Securities and Kiwoom Securities.
- Fines are a one-off cost. For ETF investors, the key questions are whether dividend payouts are maintained after the hit to profits and whether court challenges reduce the final bill.
- Watch Q4 results for firms that have not yet booked the fines; further revisions could cause short-term volatility in sector ETFs.
FAQ
Q1. How much did Korea fine brokerages over Treasury bond bid rigging? A. On Nov. 11, 2026, the KFTC fined 10 brokerages ₩1.376 trillion and 5 banks about ₩250.6 billion, for a total of ₩1.6266 trillion.
Q2. Which brokerage received the largest fine? A. KB Securities, at ₩332.2 billion, followed by NH Investment & Securities (₩242.8 billion) and Mirae Asset Securities (₩214.8 billion).
Q3. What were the institutions accused of? A. Agreeing in advance on, or sharing, the yields and volumes they would bid in government bond auctions from January 2020 to June 2023, which raised the government's interest burden.
Q4. How did the fine affect KB Securities' earnings? A. KB Securities booked the full fine in Q3, revising its consolidated net profit from ₩273.0 billion to a loss of ₩59.1 billion. Kiwoom Securities' Q3 net profit fell from ₩238.6 billion to ₩177.8 billion.
Q5. Will Samsung Securities and Shinhan Securities pay the full amount? A. Media reports say both qualify for leniency as self-reporters, so their actual burden should be lower than announced.
Q6. Are Korean brokerage stocks still attractive? A. NH Investment & Securities says yes for long-term investors, citing a sector PBR of about 0.7x and expected 2026 dividend yields of about 9% for major high-dividend names.