NH Investment & Securities Issuer Summary

Report date: 2026-05-15
Issuer: NH Investment & Securities Co., Ltd.
Ticker / market reference: NHSECS / KRX 005940
Report type: issuer_summary
Relevant bond context: issuer-level credit view for senior unsecured and market-funded obligations of NH Investment & Securities. This report is not a recommendation on a specific bond issue and does not verify final terms of any individual offering circular.

1. Business Snapshot and Recent Developments

NH Investment & Securities Co., Ltd. is one of Korea’s leading full-service securities companies. Its main revenue sources are brokerage in domestic and overseas equities, wealth management for affluent and retail clients, financial product distribution, investment banking, trading, and principal investment across bonds, equities, and derivatives. The issuer is part of NongHyup Financial Group Inc. and forms part of the broader NongHyup-affiliated financial group headed by the National Agricultural Cooperative Federation, where it performs a non-bank financial function. For bond investors, the first analytical point is that the company is not a bank but a market-based financial institution. Its credit profile is not mainly supported by a stable deposit base like a deposit-taking bank, but by a combination of client assets, market funding, equity capital, secured funding, the liquidity of financial instruments, and expectations of credit-supportive backing from the parent group.

FY2025 performance is an important starting point supporting the initial credit view. According to FY2025 financial materials disclosed through KRX/KIND, consolidated total assets were KRW 83.4tn, consolidated equity was KRW 9.44tn, and consolidated net income was KRW 1.03tn, all materially higher than the previous year. Company-disclosed ROE was 11.8%, improving from 8.7% in FY2024. On a separate basis, total assets were KRW 79.8tn, equity was KRW 8.61tn, and net income was KRW 908.3bn, indicating that the company has sufficient scale as one of Korea’s major securities firms. In securities company credit analysis, it is necessary to look not only at the level of earnings, but also at how dependent those earnings are on market conditions, and how earnings growth is retained in equity capital, NCR, and liquidity.

Developments since the start of 2026 should be divided into two areas from a credit perspective. First, in March 2026, the Financial Services Commission designated the company as a comprehensive financial investment business operator eligible to conduct IMA business. IMA allows a securities company to receive client funds, invest them in corporate finance-related assets and similar instruments, and, by product design, includes a principal-payment obligation. For NH Investment & Securities, this could provide a business opportunity to attract retail funding on a longer-term basis and channel it into IB assets. From the perspective of credit investors, however, IMA should not be treated simply as a revenue diversification positive, because it could simultaneously increase asset growth, liquidity management needs, credit risk, and reputational risk.

Second, 1Q 2026 results were very strong. However, the 1Q figures used in this report are preliminary and article-based figures checked through AWAKEPLUS’s DART disclosure mirror and several media reports; they are not audited full-year figures based on detailed review of the official DART filing text. On that basis, 1Q operating revenue was KRW 8.90tn, operating profit was KRW 636.7bn, and net income attributable to controlling shareholders was KRW 475.7bn, reportedly reaching a record quarterly level. Higher domestic equity trading value, brokerage fees, financial product sales, IB, and investment gains all contributed. However, this was a quarter reflecting an extremely favourable market environment for securities companies, and it should not be annualised and treated as a recurring earnings run-rate. From a credit perspective, strong earnings are positive insofar as they contribute to capital formation, but they also reconfirm that the issuer’s performance is sensitive to market conditions.

The relationship with the parent and the group is also an important recent credit issue. NH Investment & Securities reportedly conducted a KRW 650bn capital increase in 2025 with NongHyup Financial Group as the allottee, moving toward meeting the capital requirements related to IMA. The parent’s participation in the capital increase indicates the company’s strategic importance within the group and the parent’s willingness to provide capital support. However, this support expectation reinforces the issuer’s credit profile; it is not the same as a legal guarantee of individual bonds. This report evaluates parent support as a “credit support factor” but does not treat it as a guarantee that gives bondholders a direct claim against the parent.

2. Industry Position and Franchise Strength

NH Investment & Securities’ franchise spans multiple areas of Korea’s capital markets. According to company disclosure for FY2025, brokerage fee income was KRW 647.0bn, domestic equity brokerage fee revenue was KRW 485.0bn, overseas equity fee revenue was KRW 183.3bn, and the company’s brokerage market share by trading value was 9.7%. On a FISIS consignment commission market share basis, the company’s share was 8.86% for the cumulative period through 3Q 2025, placing it in the upper group alongside Mirae Asset Securities, Samsung Securities, KB Securities, and others. More important than the ranking itself is that the company has a sufficiently broad client base and platform to capture client flows when equity market conditions improve.

The WM platform has two meanings from a credit perspective. First, it generates a degree of revenue through client assets under custody, financial product sales, securities financing, and interest income related to client deposits, even through market cycles. FY2025 financial product sales fee income was KRW 117.5bn, supported by increased sales of investment products. Second, the client base supports the company’s distribution capability for IMA and new asset-management products. Whether the company can attract client funds through IMA will depend not only on product yields, but also on client touchpoints, brand strength, risk explanation capabilities, and confidence in the parent group. Backed by the NongHyup-affiliated financial group brand, NH Investment & Securities is relatively well placed to present itself as a securities company under a bank-affiliated financial holding group with a sense of stability.

The IB franchise is also strong. According to company disclosure, FY2025 IB fee income was KRW 437.1bn, supported by debt guarantee-related fees, rights offering underwriting, IPOs, and corporate bond lead-management mandates. 1Q 2026 media reports also indicate that the company ranked highly in ECM underwriting share, IPO underwriting share, and lead-management share for credit card and specialised finance company bonds. IB strength is not only a driver of fee income; it is also related to the supply of corporate finance assets, acquisition finance, private placement and alternative assets, and IMA investment assets. At the same time, securities companies with large IB operations are more exposed to credit risks through real estate PF, acquisition finance, bridge loans, unsold underwriting positions, and concentration in debt guarantees. Therefore, IB strength is credit positive, but it is also an area where risk selection capacity needs to be assessed rigorously.

Trading and principal investment materially lift the company’s earnings level, but they are also a key source of earnings volatility. In FY2025, investment gains and related interest income were KRW 1.17tn, a significant year-on-year improvement. In 1Q 2026, investment gains and related net interest were also reported at KRW 424.2bn. These earnings are highly sensitive to capital market liquidity, the direction of interest rates, credit spreads, equity markets, and foreign exchange. They cannot be described as fully stable revenue sources, but if risk management is effective, the thickness of the company’s capital base and its investment capability support earnings strength relative to peers.

Overseas expansion is a supplementary but important differentiating factor for the company. The NACF annual report confirms NH Investment & Securities overseas locations in New York, Beijing, Shanghai, Hong Kong, Hanoi, Jakarta, London, Singapore, and other markets. The overseas network supports Korean companies’ cross-border financing, offshore product sourcing, global equity execution, and origination of IB mandates. On the other hand, overseas operations entail local regulation, foreign-currency liquidity, country risk, and more complex internal controls. This report does not overstate overseas expansion as a basis for scale growth and views the domestic Korean franchise as the main credit foundation.

3. Segment Assessment

The company’s revenue structure is easier to assess by separating it into WM/brokerage, financial product sales, IB, trading and investment, and interest income related to securities financing and client deposits. In FY2025, the recovery in equity markets and higher client trading activity improved both fee income and interest income. This is a favourable combination for a securities company, but both are affected by market conditions and investor behaviour, and therefore differ from the stickiness of a bank’s lending spread.

WM/brokerage is the core area supporting the company’s client interface. In 1Q 2026, media reports indicated domestic equity client assets of KRW 316tn, domestic equity trading value of KRW 850tn, and a brokerage market share of 10.7%. The number of high-net-worth clients also increased, with 358,000 clients reportedly holding at least KRW 100mn and 24,000 clients holding at least KRW 1bn. These figures indicate the depth of the client base and the room for product distribution. However, brokerage revenue is highly exposed to changes in trading volume, and revenue can fall quickly when markets cool. Therefore, in credit analysis, the key point is not the growth in fees during strong markets but whether the company can maintain costs and liquidity during periods of weak trading activity.

IB is the area where the company’s brand and expertise are most visible. In FY2025, large rights offerings, IPOs, corporate bond lead-management mandates, and data-centre PF contributed to revenue. In 1Q 2026, IB fees were also reported at KRW 97.2bn, with high shares in ECM, IPOs, and specialised finance company bonds. From a credit perspective, IB strength generates high-value-added fees and increases the company’s importance to the group’s non-bank strategy. However, IB also consumes significant capital and can introduce stress through warehoused deals, bridge finance, debt guarantees, unplaced underwriting positions, and real estate-related exposure. The expansion of IMA business also depends on the ability to originate IB assets, making the balance between IB growth and risk appetite the most important monitoring item going forward.

Trading and investment operations made a significant contribution to earnings improvement from FY2025 into 1Q 2026. Consolidated net gains on FVTPL financial instruments were positive at KRW 214.1bn in FY2025, reversing from a loss of KRW 148.7bn in FY2024. Foreign exchange gains were also positive at KRW 67.0bn in FY2025, but down from KRW 274.6bn in FY2024. These figures show that a securities company’s earnings do not move along a single stable line, but fluctuate materially with a combination of several market factors. As long as risk management is effective, the company’s investment capability supports its credit quality. However, if proprietary or client product-related positions expand rapidly, VaR, stress losses, quality of liquid assets, and hedge effectiveness should take priority over reported earnings.

IMA is a new growth area, but at this stage its institutional implications are more important than its track record in segment assessment. On 31 March 2026, the company reportedly launched its first IMA product, with a 2.5-year investment period, a 4% reference yield, and a fundraising target of KRW 400bn. Funds are reportedly to be invested mainly in IB assets such as corporate loans, corporate bonds, and acquisition finance. This is consistent with the policy context of “productive finance”, in which client funds are channelled into corporate finance. On the other hand, because these products include a principal-payment obligation, the securities company retains significant asset credit risk, liquidity mismatch, yield competition, and reputational risk. Even if the initial product is sold smoothly, that alone does not mean that credit quality has improved. The relevant factors to monitor are fundraising scale, asset composition, loss-absorption capacity, liquidity reserves, and maturity diversification by product.

4. Financial Profile and Analysis

The FY2025 financial profile improved in terms of scale, earnings, and equity capital. Consolidated total assets increased by 33.6% from KRW 62.4tn at end-FY2024 to KRW 83.4tn at end-FY2025, while equity increased by 16.2% from KRW 8.12tn to KRW 9.44tn. Asset growth exceeded equity growth, indicating ongoing balance-sheet expansion as a securities company. From a credit perspective, scale growth in itself indicates the franchise and revenue opportunities, but it is positive only when accompanied by asset quality, liquidity, collateral eligibility, and resilience to valuation losses. Therefore, total asset growth alone is not a basis for credit improvement; the important point is that earnings and capital increased at the same time.

The KIS Credit Opinion provides separate-basis key indicators and consolidated regulatory capital indicators from 2021 to 2025. This partly mitigates the limitation of looking only at FY2024/FY2025 in the initial coverage. However, the table does not provide segment risk amounts, individual maturities, haircuts on liquid assets, or foreign-currency liquidity.

Earnings power recovered clearly in FY2025. Consolidated operating revenue was KRW 15.36tn, operating profit was KRW 1.42tn, pre-tax profit was KRW 1.35tn, and net income was KRW 1.03tn. Compared with FY2024, operating profit increased by 57.7% and net income by 50.2%. The earnings improvement reflected a combination of better fee income, investment gains, and interest income. This indicates that the recovery in capital markets was captured by multiple businesses, rather than being driven by a single one-off disposal gain. At the same time, the same fact also shows that earnings are significantly dependent on market conditions and trading volume. From a credit perspective, FY2025 earnings are viewed as a strong performance that increased buffers, but the same level is not assumed to be sustainable under stress.

Equity capital and NCR are central to the company’s credit assessment. At end-December 2025, consolidated NCR was 2,267.72% and separate NCR was 1,396.61%, which KIND materials describe as exceeding the 100% threshold under the Financial Investment Business Regulation. In its Credit Opinion dated 23 March 2026, KIS also indicates that consolidated NCR rose to 2,267.7% in 2025, while the adjusted net operating capital ratio was 171.8%, meaning that capital headroom against total risk exposure does not look as thick as NCR alone suggests. KIS identifies a sustained decline in the adjusted net operating capital ratio below 150% as one source of downward pressure. Therefore, this report treats NCR as a disclosed indicator of a thick regulatory capital buffer, but also monitors the adjusted net operating capital ratio, total risk exposure, and the pace of asset growth.

The preliminary 1Q 2026 figures indicate upside potential in earnings power, but the verification level needs to be distinguished. AWAKEPLUS’s DART disclosure mirror and multiple media reports indicate revenue of KRW 8.90tn, operating profit of KRW 636.7bn, and net income of KRW 475.7bn. AJU Press reported brokerage fee revenue of KRW 349.5bn, financial product sales fees of KRW 49.1bn, IB fees of KRW 97.2bn, and investment gains and related net interest of KRW 424.2bn. These figures confirm favourable market conditions and the company’s franchise, but this report has not obtained the detailed tables in the official DART filing text. Therefore, the strength of 1Q is viewed as a short-term positive for capital formation and funding confidence, while avoiding annualising the quarter to estimate full-year capacity. Earnings repeatability should be checked quarter by quarter.

The main financial constraint is the speed of asset and liability growth. At end-FY2025, separate-basis borrowings were KRW 31.2tn, bonds issued were KRW 4.71tn, and deposit liabilities were KRW 12.3tn. Compared with end-FY2024, borrowings, bonds issued, and deposit liabilities all increased substantially. For a securities company, liability growth alongside increased client assets and market positions is natural, but under stress, declines in collateral value, difficulty rolling short-term funding, client fund outflows, and contraction in securities financing can occur simultaneously. For this reason, the stronger earnings are, the more important it is to check funding tenor diversification, collateral headroom, foreign-currency liquidity, and the quality of liquid financial assets.

5. Structural Considerations for Bondholders

This report is an issuer-level view centred on NH Investment & Securities itself. Individual foreign-currency bonds, domestic bonds, programme issuance, branch issuance, subsidiary issuance, guarantee provisions, security provisions, subordination, change of control, tax gross-up, and early redemption provisions have not been verified in this report. Therefore, any investment decision on an individual bond issue must be based on the relevant Offering Circular or bond terms.

The structural starting point for bond investors is that NH Investment & Securities is a subsidiary of NongHyup Financial Group and belongs to the broader NongHyup-affiliated financial group headed by NACF. Within the group structure, NH Investment & Securities is an important company responsible for non-bank financial functions, particularly capital markets, securities, and IB. The parent’s participation in the 2025 capital increase, capital support for IMA business, and the company’s status under a financial holding company reinforce funding confidence in the market.

However, two distinctions need to be made regarding parent support. First, the parent’s participation in capital strengthening indicates strategic importance and willingness to support under normal conditions, but it is not an unconditional promise to absorb all future losses. Second, bondholders’ legal claims are, in principle, based on the issuer and the bond contract. Unless an explicit guarantee by the parent or NACF is confirmed, group support expectations are a credit-analysis enhancement factor, not a legal recovery source.

S&P Global Ratings reportedly assigned an A- rating to NHIS’s US dollar senior unsecured notes in June 2025, and search results show references to a long-term issuer credit rating of A-/Stable/A-2. However, as of this report date, the full S&P page text could not be obtained, and final terms for individual bonds have not been verified. Therefore, this report uses the S&P level only as a limited reference point for external assessment from the international market. Whether individual bonds are direct, unconditional, unsubordinated, unsecured obligations, and whether they rank pari passu with other debt, are treated as unverified matters that should be checked in the Offering Circular or bond terms.

The treatment under regulatory intervention or resolution is also unverified. Korean securities companies operate under a different regulatory framework from banks, and loss-sharing or administrative responses may differ from bank bonds, which are analysed against the backdrop of deposit insurance. The treatment of client asset protection, financial investment business regulations, principal-payment obligations by product, and collateral, trust, and segregation arrangements needs to be checked separately from bondholder recovery ranking. IMA in particular is a client-facing product and does not have the same legal nature as the issuer’s market debt, but under stress it could affect the issuer’s liquidity, credit profile, and reputation.

6. Capital Structure, Liquidity and Funding

NH Investment & Securities’ funding structure is market-based, not deposit-funded. It includes client-related liabilities, market borrowings, bonds issued, financial product-related liabilities, and secured funding. On the separate balance sheet at end-FY2025, cash and cash equivalents were KRW 2.18tn, FVTPL financial assets were KRW 37.1tn, FVOCI financial assets were KRW 11.1tn, and financial assets measured at amortised cost were KRW 27.3tn. On the liability side, deposit liabilities were KRW 12.3tn, FVTPL financial liabilities were KRW 13.2tn, borrowings were KRW 31.2tn, bonds issued were KRW 4.71tn, and other financial liabilities were KRW 9.26tn.

In liquidity assessment, it is necessary to distinguish between the size of financial assets and liquidity that can actually be used under stress. The domestic AA+ / Stable rating and short-term A1 rating, confidence in the parent group, and a thick NCR make it easier to support funding access in the Korean won market. On the other hand, the large balances of FVTPL, FVOCI, and amortised-cost financial assets do not by themselves mean immediate liquidity. Assets already pledged as collateral, haircuts, short-term maturities, CP and electronic short-term notes, repo, foreign-currency liquidity, FX hedging, and committed lines are unverified. Under market stress, even with high domestic ratings, funding conditions can deteriorate quickly due to declines in collateral value or investor avoidance of the securities company sector.

NCR is not liquidity itself, but it is a foundation of confidence in market funding. Consolidated NCR of 2,267.72% and separate NCR of 1,396.61% indicate a very thick disclosed regulatory capital buffer. In particular, FY2025 earnings and the parent’s capital injection increased equity, making it easier to meet the capital conditions required to enter the IMA business. However, the more IMA grows, the larger the issuer’s asset and liability structure becomes, and the management of product liabilities with principal-payment obligations to clients becomes more important. Credit investors need to track IMA balances, product maturities, investment assets, liquidity reserves, and loss-treatment rules.

Capital policy also requires attention. The parent’s capital increase is credit positive, but the company is listed and also pays dividends. In March 2026, cash dividends related to FY2025 were reported at KRW 1,300 per common share and KRW 1,350 per preferred share. When earnings are strong, dividends and capital accumulation can coexist, but securities companies can experience sharp earnings declines when market conditions deteriorate. As a result, the balance among payout ratio, share buybacks, growth investment, and IMA expansion affects capital headroom. At present, parent support and retained earnings support the capital profile, but if asset growth continues, risk-adjusted capital headroom should be assessed more closely than the existence or absence of capital injections.

7. Rating Agency View

For domestic ratings, Korea Investors Service confirmed NH Investment & Securities’ unsecured bonds at AA+ / Stable, commercial paper at A1, and short-term bonds at A1 in its Credit Opinion dated 23 March 2026. The credit rating section on FnGuide also shows AA+ corporate bond ratings from KIS, Korea Ratings, and NICE. The latest full-text reports from NICE and Korea Ratings were not obtained, but the KIS report confirms, at least for one major domestic rating agency, official AA+ / Stable and A1 ratings. High domestic ratings are important for Korean won-denominated bonds, CP, electronic short-term notes, secured funding, and sales to institutional investors.

KIS assesses the company’s diversified business portfolio, strong market position, favourable profitability, and good financial stability, while noting that financial burden could rise during the course of external expansion. The KIS rating incorporates a one-notch uplift based on the possibility of extraordinary support from NongHyup Financial Group. This is consistent with the view in this report. That is, the company is supported not only by its standalone franchise and capital, but also by the parent group support expectation that reinforces the domestic rating. However, KIS identifies downside risks including deterioration in asset quality and profitability due to expansion of high-risk investments, and a sustained decline in the adjusted net operating capital ratio below 150%. Therefore, the AA+ rating should not be read simply as indicating that the credit is safe.

For international ratings, S&P’s article dated 25 June 2025 on foreign-currency senior unsecured notes provides a limited reference point. Search results indicate that NHIS has a long-term issuer credit rating of A-/Stable/A-2 and that the proposed US dollar senior unsecured notes were assigned an A- rating. S&P’s view appears to incorporate the company’s importance to NongHyup Financial Group’s non-bank diversification strategy. However, because the full page text was not obtained, this report treats the S&P assessment as a supplementary external check and does not cite legal ranking or detailed triggers for individual bonds.

The rating agency view and this report’s view are broadly aligned. NH Investment & Securities has a high credit standing supported by its domestic franchise, capital, and parent support expectations, while market risk, funding risk, and principal/IB asset risk as a securities company set the ceiling for the assessment. The particular distinction emphasised in this report is that IMA expansion should not be treated simply as a near-term rating positive. IMA could broaden revenue sources and the client base, but it also increases liquidity mismatch and asset risk. To maintain ratings, risk management and preservation of capital headroom will matter more than growth in IMA balances.

8. Credit Positioning

In peer comparison, NH Investment & Securities belongs to the upper group of major Korean securities companies. Mirae Asset Securities has global expansion and asset scale, Korea Investment & Securities has an established record in IB and IMA, and Samsung Securities has strength in retail/WM. NH Investment & Securities’ relative characteristics are support from being under NongHyup Financial Group, a domestic AA+ rating, a balance between IB and WM, and connection to the policy theme of “productive finance” following IMA approval.

Within the domestic rating category, the AA+ level confirmed by KIS is very strong. Being under a bank-affiliated financial holding group, the parent’s capital increase, and the company’s strategic importance in the group’s non-bank strategy make it easier to support the credit assessment than for a standalone securities company. On the other hand, from the perspective of international investors, the S&P A- level is lower than Korea’s sovereign and major banks, reflecting the earnings volatility and market funding dependence specific to securities companies. A domestic AA+ rating does not mean that foreign-currency bond investors should expect the same liquidity and stability as bank bonds.

Compared with Mirae Asset Securities, NH Investment & Securities is relatively easy to differentiate through the stability associated with being under a domestic financial holding group, while it may lag Mirae in global risk diversification and the scale of overseas business. Compared with Korea Investment & Securities, the focus is on IMA track record and differences in financial holding company structure. NHIS’s strength lies in its room to connect retail funding and IB assets, backed by the NongHyup-affiliated group’s client base and parent support expectations. The constraint is that it is not yet sufficiently proven whether this strategy will generate risk-adjusted returns in practice.

To judge relative value, investors need current spreads, currency, tenor, issuer or guarantor, liquidity, call provisions, domestic and international ratings, and OAS comparison with peer bonds. This report has not obtained market price data and therefore does not make a definitive relative value assessment. Based only on credit fundamentals, the company has an upper-tier credit profile among Korean securities companies, but it is not a substitute for bank bonds or quasi-sovereign bonds. It is an issuer for which investors should require a risk premium appropriate to a market-based financial company.

9. Key Credit Strengths and Constraints

The first strength is the business platform as one of Korea’s major securities companies. The company has an upper-tier presence across brokerage, WM, IB, and investment operations, and in FY2025 and 1Q 2026 it was able to convert strong equity market conditions into earnings. The ability to combine client flows, corporate finance, and principal investment without being concentrated in a single revenue source is a strength relative to peers.

The second strength is the parent group and capital support. Being under NongHyup Financial Group supports confidence in funding markets, reassurance for clients, and the company’s strategic importance within the group. The KRW 650bn capital increase in 2025 showed the parent’s willingness to support IMA entry and non-bank strengthening. This reinforces credit quality, but it should always be distinguished from a legal guarantee.

The third strength is capital and regulatory metrics. At end-FY2025, equity increased to KRW 9.44tn on a consolidated basis and KRW 8.61tn on a separate basis, while consolidated NCR of 2,267.72% and separate NCR of 1,396.61% were disclosed at high levels. KIS’s five-year trend also shows that separate equity and net income in 2025 were the highest in recent years. Strong earnings and the capital increase thicken the initial buffer against IMA and market volatility. However, KIS’s adjusted net operating capital ratio was 171.8%, and capital headroom should not be overstated by looking only at NCR.

The main constraint is the earnings volatility inherent to securities companies. Strong earnings in FY2025 and 1Q 2026 were supported by equity trading value, fees, the investment environment, and IB mandates. Conversely, if equity markets weaken, credit spreads widen, and interest rates and FX move unfavourably, fees, valuation gains and losses, hedging costs, and client credit extensions could deteriorate simultaneously. This means the issuer’s credit profile can change more quickly than a bank’s.

Another constraint is the funding structure. Borrowings, bonds issued, deposit liabilities, and financial product-related liabilities are large, and the detailed maturity ladder and foreign-currency liquidity are unverified. Even with high domestic ratings, investor preference for securities companies can weaken rapidly under market stress. The interaction among short-term market funding, secured funding, derivative-related margin, and client fund outflows needs to be tracked through future disclosures.

IMA has both strengths and constraints. The mechanism of attracting client funds and supplying them to IB assets is a growth opportunity that connects retail and corporate finance. At the same time, these are products with principal-payment obligations, and credit risk in the assets and liquidity mismatch remain. IMA’s success should be assessed not by balance growth alone, but by product design, investment targets, risk limits, liquidity buffers, client explanation, and treatment when losses occur.

10. Downside Scenarios and Monitoring Triggers

The most realistic downside scenario is a sharp earnings decline due to deterioration in market conditions. If equity trading value decreases, domestic and overseas equity prices fall, interest rates move sharply, and credit spreads widen, brokerage fees, financial product sales, proprietary gains and losses, IB mandates, and securities financing demand could all weaken at the same time. After a high-earnings quarter such as 1Q 2026, the drop can look particularly large if markets reverse. Monitoring indicators are quarterly net income, FVTPL gains and losses, IB fees, credit loss provisions, NCR, equity capital, client assets under custody, and credit extension balances.

The second scenario is credit losses related to IB, real estate, and alternative investments. Company disclosure includes data-centre PF, debt guarantees, acquisition finance, and regular checks of overseas and special assets. These are revenue sources, but also loss sources under stress. If real estate prices decline, refinancing becomes difficult, sponsor credit weakens, unsold inventory rises, or guarantees are called, provisions, valuation losses, and liquidity usage can all increase at the same time. Monitoring indicators are debt guarantee balances, PF/real estate/alternative asset exposures, delinquent and watchlist assets, credit losses, and risk management committee disclosures.

The third scenario is an increase in risk appetite accompanying IMA expansion. IMA products seek earnings by investing in corporate finance assets, but they have a principal-payment obligation to clients. If fundraising competition intensifies, the issuer may move toward longer-term, less liquid, higher-yielding assets in order to offer higher reference yields. The initial product scale may not be large enough to shake the credit profile, but as balances accumulate, IMA asset composition becomes an important variable for the balance sheet and liquidity. Monitoring indicators are IMA balances, maturities by product, invested assets, liquidity reserves, earnings contribution, complaints, and regulatory responses.

The fourth scenario is deterioration in the market funding environment. Securities companies depend heavily on market confidence, so if sector-wide anxiety, domestic rating reviews, risk aversion in foreign-currency markets, collateral value declines, or increased margin calls occur, rolling short-term funding and secured funding conditions can deteriorate quickly. NH Investment & Securities has a domestic AA+ rating and parent support expectations, so it is likely to have relative resilience within the peer group, but the risk that funding markets close cannot be ignored. Monitoring indicators are bonds outstanding, CP/short-term bond balances, borrowings, foreign-currency bond issuance terms, cash, liquid financial assets, NCR, and rating actions.

The fifth scenario is weakening of group support expectations. NongHyup Financial Group has participated in capital increases as the parent and demonstrated NHIS’s strategic importance. However, if the earnings, capital, or regulatory environment of the overall group deteriorates, its capacity or priority to support non-bank subsidiaries could change. Because parent support expectations are an important pillar of the credit profile, credit trends for the broader group, including the parent, NACF, and NongHyup Bank, also need to be monitored.

11. Credit View and Monitoring Focus

NH Investment & Securities’ current credit quality is strong among major Korean securities companies. The direction is modestly positive in the near term, supported by the FY2025 earnings recovery, capital strengthening, strong 1Q 2026 performance, and IMA approval. However, as a securities company it is sensitive to market and funding conditions. It is not an issuer whose credit profile changes slowly like a bank or quasi-sovereign, and the credit view could change relatively quickly if market stress intensifies.

The core support factors are its upper-tier domestic franchise, importance within the NH Financial Group / NACF group, the domestic AA+ rating confirmed by KIS, thick NCR, and strong FY2025 earnings. Because the company has several revenue sources across brokerage, WM, IB, and investment operations, it is more diversified than a securities company dependent on a single business. The parent’s capital increase showed that the group views the company as an important vehicle for its non-bank strategy and IMA business. These factors support the company’s access to Korean won bond and short-term funding markets. For foreign-currency bonds, S&P information is limited, so ratings, terms, and liquidity should be checked for each individual issue.

At the same time, the assessment is constrained by market-dependent earnings, balance-sheet expansion, funding structure, and risks associated with IB, alternative assets, and IMA. The earnings improvement in FY2025 and 1Q 2026 is strong, but stress resilience should not be judged from strong-market numbers alone. Given the scale of borrowings, deposit liabilities, bonds issued, and financial product liabilities, the funding profile cannot be viewed as fully comfortable without confirming detailed liquidity, foreign-currency funding, collateral headroom, short-term maturities, and derivative-related margin requirements.

Parent support is an important support for the credit view, but it differs from a legal guarantee of individual bonds. This report evaluates the ownership, capital injections, and strategic importance of NongHyup Financial Group as clear credit-supportive factors. However, bondholders’ legal claim ranking depends on individual issue terms. Therefore, while the issuer-level credit profile is strong, guarantees, subordination, security, issuing entity, governing law, and tax provisions need to be checked separately for each individual bond.

Future monitoring should first confirm the sustainability of earnings from 2Q 2026 onward. It is necessary to distinguish whether the record 1Q earnings were merely a temporary market tailwind or whether earnings expansion from the client base, IB, and IMA continues. Next, NCR, equity capital, credit losses, FVTPL gains and losses, borrowings, bonds issued, deposit liabilities, and cash and liquid financial assets should be tracked quarterly. For IMA, product balances, investment targets, maturities, reference yields, client explanation, and regulatory responses should be monitored.

Overall, NH Investment & Securities can be treated as an issuer with an upper-tier credit foundation within Korea’s securities sector. However, strong ratings and parent support do not eliminate the volatility of a market-based financial company. Bond investors should assess the company as a “highly rated securities company with group support expectations” while requiring a spread appropriate to securities company-specific market, liquidity, and product risks, rather than assuming bank-bond-like stability.

12. Short Summary & Conclusion

NH Investment & Securities is a major Korean securities company under NongHyup Financial Group, and its credit quality is supported by an upper-tier domestic WM, brokerage, IB, and investment platform, as well as parent support expectations. The FY2025 earnings recovery, capital strengthening, thick NCR, strong 1Q 2026 performance, and IMA approval are positive factors, but the company remains a securities firm dependent on market funding and market-sensitive revenues, and bank-bond-like stability should not be assumed. Going forward, investors need to continue monitoring asset composition after IMA expansion, liquidity, NCR, IB/real estate/alternative investment risk, and guarantee, subordination, and maturity terms for individual bonds.

13. Sources

• KRX/KIND, NH Investment & Securities AGM notice and FY2025 financial statements, disclosed 2026-03-17: https://kind.krx.co.kr/external/2026/03/17/000483/20260317001863/00591.htm
• AWAKEPLUS DART disclosure mirror, NH Investment & Securities preliminary consolidated operating results for 1Q 2026, disclosed 2026-04-23: https://www.awakeplus.co.kr/data/view/20260423800876
• AJU Press, "NH Investment & Securities posts record quarterly profit as net income jumps 128.5%", 2026-04-23: https://m.ajupress.com/amp/20260423181970974
• RTTNews, "NH Investment & Securities Q1 Profit, Revenue Surge", 2026-04-23: https://www.rttnews.com/3641823/nh-investment-securities-q1-profit-revenue-surge.aspx?type=ern
• Seoul Economic Daily, "NH Investment Securities Wins IMA License, Vows to Expand Productive Finance", 2026-03-18: https://en.sedaily.com/finance/2026/03/18/nh-investment-securities-wins-ima-license-vows-to-expand
• Seoul Economic Daily, "NH Investment Launches First IMA Product; Financial Group Chairman Subscribes on Day One", 2026-03-31: https://en.sedaily.com/news/2026/03/31/nh-investment-launches-first-ima-product-financial-group
• ChosunBiz, "NH Investment & Securities nears South Korea IMA approval as third operator", 2026-03-11: https://biz.chosun.com/en/en-finance/2026/03/11/BVXXEVTCZVDUVJ5CN7K3EEOM24/?outputType=amp
• TopDaily, "NH Investment & Securities seeks IMA approval... Approves 650 billion won capital increase", 2025-07-31: https://en.topdaily.kr/articles/8045
• Financial News / Yonhap, FSC designation of NH Investment & Securities as IMA operator, 2026-03-18: https://www.fnnews.com/ampNews/202603181504445546
• Korea Investors Service, NH투자증권㈜ KIS Credit Opinion, rating date 2026-03-23: https://m.kisrating.com/fileDown.do?fileName=rs20260324-3.pdf&gubun=2&menuCd=R8
• FnGuide Company Guide, NH Investment & Securities company and rating snapshot, accessed 2026-05-15: https://comp.fnguide.com/SVO2/ASP/SVD_Main.asp?gicode=A005940
• S&P Global Ratings, "NH Investment & Securities' Proposed Senior Unsecured Notes Assigned 'A-' Rating", 2025-06-25. The accessed S&P page was only partially rendered; this report uses the public search result and visible metadata as a limited external rating reference, not as confirmation of individual bond terms: https://www.spglobal.com/ratings/pt/regulatory/article/-/view/type/HTML/id/3395756
• National Agricultural Cooperative Federation 2025 Annual Report extracted local source, used for group structure and overseas network context: issuer_summary/issuers/national_agricultural_cooperative_federation/data/source_docs/2025_annual_eng/2025_NH_Annual_Report_extracted.txt
• Structured source extraction prepared for this report: issuer_summary/issuers/nh_investment_securities/data/nh_investment_securities_key_metrics.json

14. Unverified / Pending

• Individual offering circulars, final bond terms, guarantee language, subordination, security, change of control, tax gross-up, branch/program issuer, and governing law were not verified. This report is an issuer-level credit view.
• Detailed maturity ladder, CP/electronic short-term note balances, committed bank lines, secured funding capacity, FX liquidity, collateral pool, derivative margin exposure, and stress liquidity plan were not obtained.
• Latest full domestic rating reports from NICE and Korea Ratings were not obtained. KIS Credit Opinion was obtained and used for AA+ / Stable, A1, key rating logic, support uplift, and selected capital/risk indicators.
• S&P Global Ratings' full rating article and any later rating action after 2025-06-25 were not fully verified in source text. The A- reference is treated as a limited external check.
• Detailed financials before FY2023 were supplemented using KIS key indicators, but the financial statement analysis in the main text focuses mainly on the FY2024/FY2025 comparison. Full multi-year BS/PL, cash and liquidity breakdown, and segment risk amounts were not obtained.
• Detailed IMA balance, asset composition, liquidity reserve, loss allocation, and product-by-product maturity profile were not available at initial coverage.
• Real estate PF, acquisition finance, alternative investment, overseas investment, and debt guarantee exposures require additional source work before any issue-specific view is formed.