Hana Bank Launches Principal Preservation-Oriented ELB

[Asia Economy Reporter Minyoung Kim] Hana Bank announced on the 6th that it has launched a principal-protected equity-linked bond (ELB) product aimed at retirement pension customers.

This product, newly introduced in collaboration with Kiwoom Securities, determines returns based on the KOSPI 200 and Euro Stoxx 50 indices. On the evaluation date, the product compares the two indices with the index at the time of subscription (initial reference price) and pays the corresponding return if the payment conditions are met.

In particular, although the maturity of this product is 3 years, early redemption evaluations are conducted annually, allowing returns to be realized before maturity. Even if the market conditions are unfavorable and the indices decline, failing to meet the payment conditions, the product is principal-protected, meaning the invested principal is paid back, the bank explained.

For example, in the case of "Kiwoom Securities ELB No. 327," if the underlying asset prices on the early redemption evaluation date or maturity date are all above the initial reference price, an annual pre-tax return of 2.4% is paid. If the condition is met at the 1-year early redemption evaluation, 2.4% is paid; if met after 2 years, 4.8%; and if met at maturity, 7.2% is paid. If the condition is not met, only the principal is paid.

This product is available to new or existing subscribers of defined benefit (DB) plans, defined contribution (DC) plans, and individual retirement pensions (IRP). Subscriptions can be made at all Hana Bank branches, with a minimum subscription amount of 1 million KRW.

Lee Jang-sung, Head of the Pension Business Division at Hana Bank, said, “Hana Bank is striving to provide optimal products that meet diverse customer demands in the low-interest-rate era,” adding, “We will work to diversify customers’ portfolios and improve returns.”

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