Brokerages witness profit drops

Business model modernization is key to improving sector's health, says McKinsey

Comprehensive transformation is imperative for Chinese securities firms, as their performance slumped significantly last year due to following outdated business models, according to a report from global consulting firm McKinsey and Co.

The combined income of the 131 securities firms in the report dropped 11.9 percent year-on-year, totaling 126.6 billion yuan ($18.7 billion) during the first half of 2018. During the same period, their combined registered net profit margin contracted to 26 percent from 36 percent in 2017.