[Click eStock] Hana Financial Group Confirms Commitment to Boost Stock Price

[Asia Economy Reporter Junho Hwang] DS Investment & Securities has set the target price for Hana Financial Group at 50,200 KRW. It issued a 'Buy' recommendation based on a favorable loan structure during the interest rate hike period and shareholder return policies.

Hana Financial Group, along with Shinhan Financial Group, holds a high proportion of variable-rate loans among commercial banks, approximately 78%. This is advantageous during periods of rising interest rates. According to the interest rate sensitivity gap, a single rate hike improves the net interest margin (NIM) by 3 basis points annually. High levels of interest income improvement can be expected during periods of rising interest rates.

However, following the merger with Korea Exchange Bank, the expanded overseas asset exposure has resulted in relatively higher foreign exchange risk compared to other banks. A 10 KRW increase in the KRW/USD exchange rate causes about 12 billion KRW in foreign exchange losses. DB Investment & Securities expects that ongoing efforts to reduce foreign exchange exposure will gradually lessen the impact of foreign exchange gains and losses.

Hana Financial Group also resolved an interim dividend of 800 KRW per share, an increase of 100 KRW from last year's interim dividend DPS. It plans to pursue amendments to the articles of incorporation for quarterly dividends at the shareholders' meeting in March next year. In the first quarter, it responded to shareholder return expectations by canceling 150 billion KRW worth of treasury shares previously held.

On the 22nd of last month, it signed a share exchange agreement with SK Telecom for financial and ICT innovation cooperation, which is expected to have a positive effect on supply and demand. SK Telecom will purchase all 330 billion KRW worth of Hana Card shares it holds, making it a 100% subsidiary. SK Telecom will purchase an equivalent amount of Hana Financial Group shares from the market. The remaining planned purchase volume is estimated at about 200 billion KRW, which is 4.2 times the average daily trading volume.

Nam Min-wook, a researcher at DB Investment & Securities, stated, "Considering the current stock price level, the supply and demand improvement effect from the purchase trust contract is expected for the time being."

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