Hana Financial Group reported a net profit of KRW 1.1928 trillion for the second quarter of 2024, announced on July 24. The result represents a 1.66% increase compared to the same period last year (KRW 1.1733 trillion), driven by solid interest income centered on corporate lending and non-interest income including fee income growth from portfolio diversification. The performance came despite large-scale one-time costs including foreign exchange translation losses of KRW 109.8 billion due to exchange rate increases, provisions of KRW 74.9 billion related to corporate restructuring, and insurance loss of KRW 52.4 billion from implementation of advanced actuarial assumption measures.
The second-quarter result slightly underperformed market expectations. According to Yonhap Infomax Consensus Comprehensive, Hana Financial's Q2 net profit was forecast at KRW 1.2622 trillion, representing a 6.54% year-over-year increase.
Hana Financial Group Reports Record First-Half Net Profit of KRW 2.4029 Trillion
On a cumulative first-half basis, Hana Financial Group recorded KRW 2.4029 trillion in net profit, up 4.4% year-over-year, marking a record high for the half-year period.
The group's first-half interest income (KRW 4.8082 trillion) and non-interest income (KRW 1.4874 trillion) totaled KRW 6.2956 trillion, a 13% increase compared to the same period last year.
The second-quarter net interest margin (NIM) stood at 1.88%, up 0.06 percentage points quarter-over-quarter.
The group's estimated common equity tier 1 (CET1) ratio and BIS ratio were 13.21% and 15.26% respectively, maintaining stable levels thanks to active risk-weighted asset return (RoRWA) management and profitability-focused asset portfolio improvements.
Return on equity (ROE), a key profitability indicator central to the corporate value enhancement plan implementation, reached 10.62%, improving 143 basis points compared to year-end. Return on assets (ROA) also rose 9 basis points to 0.71%.
Fee Income Increases 37.7% Year-over-Year in First Half
First-half fee income increased 37.7% (KRW 406.9 billion) compared to last year, driving the group's growth. This resulted from expanded asset management-related fees including trust fees, securities brokerage fees, and investment advisory and management fees, combined with increased underwriting arrangement and advisory fees following strengthened high-quality investment banking portfolio.
Hana Bank and Subsidiaries Deliver Solid Performance
Hana Bank recorded a consolidated net profit of KRW 2.1211 trillion for the first half, including KRW 1.0169 trillion in the second quarter. This represents a 1.7% increase compared to the same period last year.
Non-interest income reached KRW 614.3 billion, up 22.4% year-over-year. Hana Bank explained this resulted from maintaining solid business capabilities in core competitiveness areas including asset management, retirement pensions, trusts, and foreign exchange, despite large-scale one-time factors such as provisions related to a major corporate group's corporate restructuring application and foreign exchange losses due to exchange rate increases.
Hana Bank's core profit, combining first-half interest income (KRW 4.4645 trillion) and fee income (KRW 614.3 billion), totaled KRW 5.0788 trillion.
Hana Securities' net profit for the first half reached KRW 273.1 billion, up 155.7% year-over-year. This was attributed to increased brokerage fee revenue following trading volume growth and proactive risk management against market volatility.
During the same period, Hana Card reported net profit of KRW 125.9 billion, Hana Capital KRW 104.5 billion, and Hana Life KRW 14.6 billion respectively.
Hana Financial Group Announces Corporate Value Enhancement Plan 2.0
On July 24, Hana Financial Group announced "Corporate Value Enhancement Plan 2.0," which includes reset targets for ROE, shareholder return ratio, and CET1, along with specific implementation measures.
The group raised its existing ROE target from maintaining above 10% to 12%. To achieve this, the group plans to continue pursuing: expanding the ultra-gap in bank core competitiveness, strengthening profitability of non-bank subsidiaries, and securing future growth engines through preemption of the digital asset ecosystem.
The group set a shareholder return ratio target of 50% or more and introduced a shareholder return framework linked to ROE and RWA growth rate to increase predictability of shareholder returns.
The group also plans to diversify its shareholder base and improve supply-demand structure by expanding total annual dividend amounts by a minimum of 10% to meet the high-dividend company standard of 40% dividend payout ratio.
The CET1 target was adjusted to 13% or more, with capital exceeding 13% available for use as shareholder return resources.
A Hana Financial Group official stated, "Based on balanced capital allocation principles, we will internalize a company-wide RWA management stance and establish a management system that pursues qualitative growth centered on capital efficiency by managing RWA growth rate at the level of nominal GDP."
FAQ
What was Hana Financial Group's net profit for Q2 2024?
Hana Financial Group reported a net profit of KRW 1.1928 trillion for the second quarter of 2024, representing a 1.66% increase compared to the same period last year (KRW 1.1733 trillion).
What new targets did Hana Financial Group announce in Corporate Value Enhancement Plan 2.0?
Hana Financial Group announced on July 24 that it raised its ROE target from maintaining above 10% to 12%, set a shareholder return ratio target of 50% or more, and adjusted its CET1 target to 13% or more, with capital exceeding 13% available for shareholder return resources.
How much did Hana Financial Group's fee income increase in the first half?
Hana Financial Group's first-half fee income increased 37.7% (KRW 406.9 billion) compared to last year, driven by expanded asset management-related fees and increased underwriting arrangement and advisory fees.
