[Concall] Hana Financial "Real Estate PF Managed Without Issues"

Complete Inspection Done... Almost No Delinquency and Thorough Management

[Asia Economy Reporter Minwoo Lee] Hana Financial Group has stated that it is managing the real estate project financing (PF) market, where concerns about liquidity tightening are growing due to incidents such as the Gangwon-do Legoland case, without any issues.

On the 25th, executives from Hana Financial Holdings and its affiliates announced this during the Q3 earnings conference call. Kim Juseong, Chief Risk Officer (CRO) of Hana Financial Group, said, "The group has managed the total amount related to real estate PF at the group level, and all affiliates, including banks, consider this part when setting their annual business plans," adding, "Regarding the recently raised concerns about the Legoland PF asset-backed commercial paper (ABCP) exposure, neither Hana Securities nor any subsidiary of Hana Financial Group is involved at all."

They also disclosed the status and preparedness of real estate financing by each affiliate. Jung Seunghwa, CRO of Hana Securities, said, "The scale of Hana Securities' debt guarantees was 4.9 trillion KRW in the previous quarter, higher than other securities firms, due to 10 large acquisition financing deals in the first half, which temporarily increased the amount," and added, "In Q3, it decreased by nearly 1 trillion KRW to about 3.9 trillion KRW, and we plan to continuously reduce domestic real estate financing for the time being."

He also explained the detailed breakdown. CRO Jung said, "The scale of domestic real estate financing is 1.9 trillion KRW, of which the main PF is 1.1 trillion KRW, physical real estate is 200 billion KRW, and bridge loans are about 600 billion KRW," adding, "Most of the main PF has achieved investment recovery (exit) through sales, and even the partially unmet cases are mostly agreements with reputable construction and trust companies, so there is no problem with bond preservation," and "Among the 600 billion KRW in bridge loans, we are focusing on managing 450 billion KRW excluding high-quality data centers and logistics offices." He continued, "Some projects in the Daegu area are delayed in contractor selection or permits, causing delays in conversion to main PF, and we are negotiating with the main lenders for maturity extensions," adding, "Most maturity extensions have been completed, and only one project has some overdue payments, but since this project is secured by collateral, there is no concern about insolvency."

Executives from Hana Savings Bank and Hana Capital also responded that they are managing without issues. Kim Kidong, Chief Financial Officer (CFO) of Hana Capital, explained, "Out of total financial assets of 15 trillion KRW, real estate PF-related assets are 73 cases totaling 695.4 billion KRW, and bridge loans are 12 cases totaling 200 billion KRW," adding, "Only a 5 billion KRW commercial building in Suncheon, Jeonnam, and a 4 billion KRW residential-commercial complex in Juan-dong, Incheon, are overdue; the rest are being managed normally." Hana Savings Bank also stated, "We have inspected all projects, and only two cases totaling 9 billion KRW are overdue, with a total delinquency rate of about 1%, and there are no projects with worsening concerns," adding, "We are not handling new PF or bridge loans and will continue to manage them thoroughly."

The group’s plan regarding treasury stock repurchases was also disclosed. After being asked about plans to repurchase and retire new treasury stocks, Lee Hooseung, CFO of Hana Financial Group, said, "We are planning to repurchase and retire new treasury stocks separately from the retirement of existing treasury stocks," adding, "This is being prepared as part of strengthening overall shareholder return policies."

Meanwhile, Hana Bank does not plan to conduct voluntary retirement within this year. Kim Youngil, Head of Management Strategy at Hana Bank, said, "Retirement costs were reflected in Q1 this year due to last year’s retirements, but we do not plan to conduct any this year," adding, "If we do, it is being considered for next year."

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