Hana Financial Group Posts Net Profit of 3.58 Trillion Won... First Time Surpassing 3 Trillion Since Holding Company Launch (Update)

Effective Stable Cost Management
Dividend Payout Ratio Expected to Return to Pre-COVID-19 Level of 26%

[Asia Economy Reporter Minwoo Lee] Hana Financial Group has surpassed an annual net profit of 3 trillion KRW for the first time since its establishment as a holding company. Both the banking and non-banking sectors showed balanced growth, while stable cost management appeared to be effective.

Hana Financial Holdings announced on the 10th that it recorded a preliminary net profit of 854.6 billion KRW on a consolidated basis for the fourth quarter of last year. This represents a 56.8% increase compared to the same period last year. On an annual basis, the net profit totaled 3.5816 trillion KRW, marking a 33.4% increase from the previous year and surpassing 3 trillion KRW for the first time since the holding company was established. Based on net profit attributable to owners of the parent company, the fourth quarter recorded 844.5 billion KRW, and the annual figure was 3.5261 trillion KRW.

Meanwhile, consolidated revenue for the fourth quarter of last year was 7.6043 trillion KRW, and operating profit was 1.1209 trillion KRW. Revenue decreased by 48.8% year-on-year, while operating profit increased by 17.7%.

Hana Financial Holdings explained, "Despite proactive provisioning considering the prolonged COVID-19 pandemic, diversification of the business portfolio was effective," adding, "The balanced growth of banking and non-banking sectors and stable cost management contributed to these results."

They emphasized that growth continued through an increase in loan assets centered on small and medium-sized enterprises and diversification of fee income. Core profit, which combines interest income (7.4372 trillion KRW) and fee income (1.8634 trillion KRW), was recorded at 9.3006 trillion KRW, a 15.2% increase compared to the previous year.

The group's net interest margin (NIM) for the fourth quarter was 1.71%. Return on equity (ROE) was 10.89%, and return on assets (ROA) was 0.74%. The cost-to-income ratio (CIR) fell by 1.3 percentage points (p) year-on-year to 44.0%, achieving a decline for seven consecutive years.

As a result of pursuing a growth strategy focused on high-quality assets considering risks, risk-weighted assets were managed stably, and net profit continued to increase, with the group's BIS ratio (Basel Committee on Banking Supervision capital adequacy ratio) estimated at 16.29%.

Including trust assets (150.9994 trillion KRW), the group's total assets increased by 10.07% year-on-year to 653.4447 trillion KRW.

◆ Hana Bank Net Profit 2.5 Trillion KRW... Up 27% YoY = The main affiliate, Hana Bank, posted preliminary consolidated revenue of 5.5011 trillion KRW and operating profit of 866 billion KRW for the fourth quarter of last year. Revenue decreased by 52.3% year-on-year, while operating profit increased by 21.0%. Net profit for the same period rose by 74.03% to 622.3 billion KRW. The annual net profit was 2.5757 trillion KRW.

Despite non-cash foreign exchange losses due to exchange rate increases, loan growth based on real demand such as small and medium-sized enterprise loans continued, and cost reduction efforts were reflected.

Core banking income, including interest income (6.1506 trillion KRW) and fee income (720.2 billion KRW), increased by 14.1% compared to the previous year.

Asset quality indicators also continued to improve. The NPL coverage ratio, which is the ratio of loan loss provisions set aside against non-performing loans (NPLs), rose by 33.8 percentage points (p) to 163.9%. Compared to 2020, the NPL ratio fell by 8 basis points (bp) to 0.26%, and the delinquency rate decreased by 3 bp to 0.16%.

Total assets, including trust assets (70.1517 trillion KRW), increased by 8.31% year-on-year to 500.3453 trillion KRW.

◆ Hana Financial Investment, Hana Card, Capital, and Other Non-Banking Affiliates Also Show Growth = Among affiliates excluding the bank, Hana Financial Investment recorded the largest net profit of 506.6 billion KRW. Overall profits increased due to growth in asset management fees and other areas, marking a 23.3% increase compared to the previous year.

The largest increase in net profit was seen at Hana Card, which rose by 62.2% year-on-year to 250.5 billion KRW. This was driven by increased payment-related fees and cost efficiency.

Hana Capital's net profit also increased by 53.5% compared to 2020, reaching 272 billion KRW. This is attributed to an increase in high-quality retail assets.

Additionally, Hana Asset Trust posted a net profit of 92.7 billion KRW, and Hana Life Insurance recorded 24.3 billion KRW in net profit, increasing by 14.7% and 8.6% respectively compared to the previous year.

Meanwhile, the board of directors of Hana Financial Group resolved a year-end cash dividend of 2,400 KRW per share. Including the interim dividend of 700 KRW already paid, the total cash dividend per common share for the 2021 fiscal year is 3,100 KRW. The resulting annual dividend payout ratio is expected to be 26%, returning to the pre-COVID-19 level of 2019. Hana Financial Group explained, "This dividend decision was made as part of improving management performance and continuing shareholder return policies amid the challenging environment caused by the prolonged COVID-19 pandemic."

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