Hana Financial Group Achieves Record 1.8 Trillion KRW in H1... Interim Dividend of 700 KRW per Share (Comprehensive)

4,071 Billion KRW Increase Compared to Same Period Last Year
Q2 Net Profit 9,175 Billion KRW...33% Up

[Asia Economy Reporter Kiho Sung] Hana Financial Group recorded a consolidated net profit of 1.7532 trillion KRW for the first half of the year, including 917.5 billion KRW in the second quarter. This marks an increase of 407.1 billion KRW compared to the same period last year, representing the largest half-year performance in history.

Hana Financial disclosed this information through the Financial Supervisory Service's electronic disclosure system on the same day. Regarding this performance, Hana Financial stated, "This result was achieved by securing sufficient loss absorption capacity amid domestic and international uncertainties and continuous growth in the non-bank sector (654.3 billion KRW, an increase of 246.4 billion KRW compared to the same period last year)."

First, in the non-bank sector, major non-bank affiliates recorded net profits for the first half as follows: Hana Financial Investment 276 billion KRW (an increase of 103.5 billion KRW, 60.0% compared to the same period last year), Hana Card 142.2 billion KRW (an increase of 76.9 billion KRW, 117.8%), and Hana Capital 125.5 billion KRW (an increase of 41.4 billion KRW, 49.3%).

Hana Bank posted a consolidated net profit of 1.253 trillion KRW for the first half, including 677.5 billion KRW in the second quarter. This is a 17.9% (190 billion KRW) increase compared to the same period last year, supported by increased sales of major non-face-to-face products and growth in core low-interest deposits due to abundant liquidity.

The bank's core income, combining interest income (2.9157 trillion KRW) and fee income (377.7 billion KRW) for the first half, rose 7.9% (242 billion KRW) year-on-year to 3.2934 trillion KRW, maintaining solid performance. At the end of the first half, the non-performing loan (NPL) ratio was 0.30%, and the delinquency rate was 0.20%, showing a continuous downward stabilization trend. Additionally, as of the end of the first half, Hana Bank's total assets, including trust assets of 66 trillion KRW, amounted to 484 trillion KRW.

Accordingly, the group's core income, combining interest income (3.254 trillion KRW) and fee income (1.2613 trillion KRW) for the first half, reached 4.5153 trillion KRW, with the group's net interest margin (NIM) at 1.67%. Along with this, efficient cost reduction efforts and securing financial capacity through digital transformation stabilized selling and administrative expenses below 1 trillion KRW in the second quarter, and the cost-to-income (C/I) ratio fell by 2.5 percentage points from the previous quarter to 44.0%.

Due to efficient risk management at the group level and continuous efforts to improve asset soundness, the downward stabilization of soundness indicators continued. The group's NPL coverage ratio for the first half of 2021 increased by 11.2 percentage points from the previous quarter to 151.3%. The non-performing loan ratio improved by 4 basis points to 0.36%, and the delinquency rate improved by 2 basis points to 0.28% compared to the previous quarter.

Furthermore, sufficient loss absorption capacity was secured by proactively setting aside COVID-19-related economic response provisions last year. A Hana Financial Group official stated, "Despite maintaining conservative provisioning standards in the first half of this year, we continued a low loan loss cost ratio of 0.12%, down 15 basis points compared to the same period last year."

Thanks to stable management of risk-weighted assets and continuous net profit growth, the group's estimated Basel III (BIS) capital adequacy ratio rose by 28 basis points from the previous quarter to 16.60%, and the estimated common equity tier 1 (CET1) ratio increased by 12 basis points to 14.16%.

Key management indicators such as return on equity (ROE) rose by 29 basis points from the previous quarter to 11.25%, and return on assets (ROA) slightly increased by 2 basis points to 0.76%, continuing an upward stabilization trend. The group's total assets, including trust assets of 140 trillion KRW, amounted to 627 trillion KRW in the first half of 2021.

Along with this, Hana Financial decided to implement an interim dividend. After the earnings announcement, Vice Chairman Dongseung Lee said during a conference call, "The Hana Financial Group board of directors resolved to pay an interim dividend of 700 KRW per share after careful consideration of securing sufficient loss absorption capacity, improving capital adequacy, and expanding an active shareholder return policy."

Vice Chairman Lee added, "Despite vaccine distribution, considering the worsening economic situation caused by the emergence of COVID-19 variants, investor expectations, and financial authorities' concerns, we will pursue an active shareholder return policy. Although uncertainties due to COVID-19 are increasing, Hana Financial's performance exceeded market expectations, and based on this, we will proceed with active shareholder return measures such as year-end dividends for 2021 and share repurchases."

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