Return to the 1 Trillion Club... Hana Financial Group 3Q Net Profit 1.2 Trillion

21% Increase Year-on-Year... Holding Up Despite Foreign Currency Conversion Losses
Loan Growth and Focused Cost Management

[Asia Economy Reporter Minwoo Lee] Hana Financial Group posted strong earnings by surpassing 1 trillion KRW in net profit again in the third quarter of this year. Despite a foreign currency translation loss of 136.8 billion KRW due to the weak Korean won, this is attributed to a significant increase in loan assets and efficient cost management.

On the 25th, Hana Financial Group recorded a third-quarter net profit (attributable to controlling shareholders) of 1.1219 trillion KRW, a 20.8% increase compared to the same period last year. It grew more than 30% from the somewhat sluggish 825.2 billion KRW in the previous quarter, surpassing 1 trillion KRW in net profit again.

Interest income was 2.2966 trillion KRW, and fee income was 428.7 billion KRW. Interest income increased by 5.7% from the previous quarter, but fee income decreased by 12.0%. The group's net interest margin (NIM) for the third quarter was 1.82%, up 18 basis points (bp; 1bp=0.01%) from the same period last year and 0.2bp from the previous quarter.

The cumulative loan loss expense ratio for the third quarter fell by 1bp from the previous quarter to 0.21%. This is explained as a result of stable management of loan loss provisions through asset management strategies focused on soundness and risk management efforts.

The non-performing loan (NPL) ratio improved by 2bp from the previous quarter to 0.35%, and the delinquency rate at the end of the third quarter remained the same as the previous quarter at 0.32%. The NPL coverage ratio, which indicates the amount of provisions set against NPLs, rose by 11.3 percentage points from the previous quarter to 175.7%.

General administrative expenses in the third quarter were 1.0086 trillion KRW, up 5.5% from the previous quarter. Considering uncertain domestic and international conditions, efforts to reduce costs led to an improvement in the third-quarter cost-to-income ratio (CIR) to 38.0%, improving by more than 2 percentage points from the previous quarter.

At the end of the third quarter, the capital adequacy ratio (BIS ratio) and common equity tier 1 capital ratio were estimated at 15.2% and 12.7%, respectively. The group's total assets, including trust assets of 157 trillion KRW as of the end of the third quarter, amounted to 755 trillion KRW.

For Hana Bank, the group's main affiliate, net profit attributable to controlling shareholders in the third quarter was 807.2 billion KRW, a 25.4% increase compared to the same period last year. This was attributed to continued growth in corporate-centered loan assets and effective management of general administrative expenses and loan loss provisions.

The bank's net interest margin (NIM) for the third quarter was 1.62%. The NPL ratio at the end of the third quarter fell by 3bp from the previous quarter to 0.21%, and the NPL coverage ratio rose by 18.8 percentage points from the previous quarter to 207.3%. The delinquency rate was 0.18%. Hana Bank's total assets, including trust assets of 74 trillion KRW as of the end of the third quarter, amounted to 586 trillion KRW.

Additionally, Hana Securities' operating profit was 153.8 billion KRW, a 47.6% increase compared to the same period last year.

A Hana Financial Group official stated, "We are reviewing various capital utilization plans to expand shareholder return policies, including increasing dividends, repurchasing and retiring treasury shares, to meet shareholders' expectations and enhance shareholder value."

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