South Korean securities firms generated nearly 1 trillion won ($904 million) worth of profit from interest paid by individuals who borrowed money to invest in stocks last year, according to data provided by the Korea Financial Investment Association Sunday.

The combined interest on credit-based loans that 57 local brokerage houses collected from retail traders came to 997 billion won in 2020, having soared 33.4 percent on-year. It was also a fresh new high since the association began collecting relevant data in 2009. The previous record was 848.5 billion won in 2018.

On signs of recovery from COVID-19, pandemic-hit stock markets around the globe recovered fast, leading to a record-setting bull run. In line with the rallies, more people invested in high-risk assets. Their rising demand for robust asset growth also contributed to the snowballing volume of credit loans taken out for investment in the stock market, the data showed.

The total balance of all credit loans taken out by private stock investors stood at a daily average of 11.12 trillion won in 2018, but declined to 9.68 trillion won the following year. But the figure spiked to 19.45 trillion won at the end of last year and has continued to surge this year, exceeding the 20 trillion won mark for the first time in January. As of Thursday, the balance for credit financing had increased to some 21.9 trillion won.

Stock transaction fees that brokerages reaped from investors’ trading more than doubled last year as well. The total amount they received from commissions on trading local stocks rose 108.4 percent on-year to 5.66 trillion won, while the earnings from overseas stock trading fees jumped 233.3 percent on-year to 544.6 billion won.

By Jie Ye-eun (yeeun@heraldcorp.com)