Hana Financial Group Reports Record High Net Profit of 2.4084 Trillion KRW Last Year

Largest Since Holding Company Establishment in 2005
Net Profit Up 7.8% Year-on-Year
Interest and Fee Income Drive Growth
Year-End Dividend of 1,600 KRW per Common Share

[Asia Economy Reporter Kim Min-young] Hana Financial Group has achieved its highest-ever performance.

Hana Financial announced on the 4th that it recorded a consolidated net income of 2.4084 trillion KRW for the year 2019, including 367.2 billion KRW in the fourth quarter.

This figure represents a 7.8% (175 billion KRW) increase compared to the previous year, marking the highest performance since the holding company was established in December 2005.

According to Hana Financial, although one-time expenses such as special retirement pay for wage peak employees and non-cash foreign exchange losses due to exchange rate increases occurred, these were offset by gains from the sale of the Seoul Myeongdong building and derivative gains related to equity investments in Vietnam.

Core earnings drove the performance. The group's core earnings, which combine interest income (5.7737 trillion KRW) and fee income (2.2565 trillion KRW), reached 8.0302 trillion KRW, a 2.1% (168.9 billion KRW) increase from the previous year.

Hana Financial analyzed this as "favorable loan asset growth, strengthened competitiveness in the investment banking (IB) sector, and increased collaboration efforts."

Asset quality also remained stable. At the end of last year, the group's loan loss cost ratio was stably managed at 0.18%, the same level as the previous year, while the non-performing loan ratio fell by 11 basis points (1bp = 0.01 percentage points) to 0.48%. The delinquency rate improved by 7 basis points to 0.30% compared to the previous year-end.

Return on equity (ROE) and return on assets (ROA) also showed favorable levels. Hana Financial's ROE and ROA were recorded at 8.78% and 0.60%, respectively. The group's cost-to-income ratio (C/I Ratio) improved by 1.5 percentage points from the previous year to 50.7%, achieving a decline for four consecutive years. Excluding the special retirement pay costs for additional wage peak employees in the fourth quarter, the ratio drops further to 48.9%.

The group's total assets, including trust assets (119.3447 trillion KRW), increased by 9.7% (47.9838 trillion KRW) from the previous year-end to 540.863 trillion KRW.

By affiliate, Hana Bank recorded a consolidated net income of 2.1565 trillion KRW for 2019, including 365.3 billion KRW in the fourth quarter.

This is a 3.4% (70.6 billion KRW) increase from the previous year, marking the highest performance since the integrated bank's launch. The bank's core earnings, combining interest income (5.414 trillion KRW) and fee income (886.4 billion KRW), also increased by 2.7% (164.8 billion KRW) to 6.3004 trillion KRW.

Core low-interest deposits increased by 13.3% (7 trillion KRW) from the previous year-end to 59.62 trillion KRW, and time deposits rose by 11.2% (13.446 trillion KRW) to 133.367 trillion KRW.

The bank's KRW loans amounted to 218.385 trillion KRW, with SME loans increasing by 10.3% (8.243 trillion KRW) to 87.933 trillion KRW, driven by an asset growth strategy focused on high-quality small and medium enterprises. As of the end of 2019, the loan-to-deposit ratio (the ratio of loans to deposit balances) was 94.4%.

The non-bank sector showed mixed results. Hana Financial Investment posted a net income of 280.3 billion KRW, an 84.3% surge compared to the previous year. Hana Financial explained that this was due to a significant improvement in fundamentals following a capital increase in 2018, with underwriting and advisory fees increasing by 55% year-on-year.

Hana Card's performance declined due to reduced merchant fees, achieving a net income of 56.3 billion KRW, down 47.2% from the previous year. Hana Capital also posted a net income of 107.8 billion KRW, down 10.5% year-on-year. Hana Life earned 23.7 billion KRW, and Hana Savings Bank earned 16.1 billion KRW.

Meanwhile, Hana Financial resolved a year-end cash dividend of 1,600 KRW per share. Including the interim dividend of 500 KRW already paid, the total cash dividend per common share for the 2019 fiscal year is 2,100 KRW, with an expected annual dividend payout ratio of 25.6%.

This content was produced with the assistance of AI translation services.