[Click eStock] "Hana Financial Group, Double-Digit Profit Growth Expected This Year"

[Asia Economy Reporter Park Ji-hwan] Yuanta Securities evaluated that Hana Financial Group is expected to achieve double-digit profit growth this year. They gave a 'Buy' investment rating and a target price of 49,000 KRW.

Jeong Tae-jun, a researcher at Yuanta Securities, stated, "Hana Bank has experience in rapidly raising its capital ratio through planned risk-weighted asset management after acquiring Korea Exchange Bank. It has achieved the largest profit increase among commercial banks over several years and is expected to realize double-digit profit growth this year as well."

He analyzed that the recovery of bank interest income due to the rebound in net interest margin (NIM), growth in non-bank interest income driven by stock market gains, increase in non-interest income from non-bank subsidiaries, and reduction in loan loss expenses due to decreased provisions related to COVID-19 will lead the earnings growth trend.

Profits this year are expected to increase by 12.2% compared to the previous year. Interest income is forecasted to grow by 8.9% year-on-year, with bank NIM rising by 1bp and Korean won loans expected to increase by 3.6%. Non-bank interest income is projected to grow by 13.5%.

Researcher Jeong emphasized, "The loan loss cost ratio is expected to be defended at 32bps, down 4bps from the previous year due to reduced COVID-19 related provisions," and added, "If the base rate hike occurs as expected in Q4 this year, the strong earnings momentum is anticipated to continue through next year."

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