“Earned 1.2 trillion won every quarter”: Hana Financial Group Inc. Group posts record earnings and record shareholder returns

[Financial News] Hana Financial Group Inc. posted net profit of more than 3.6 trillion won in the first three quarters of this year. Interest income continued to grow, while higher fee income also helped diversify the group’s revenue base. Along with announcing its results today, the group’s board said it would step up shareholder returns by unveiling a plan to buy back and cancel 250 billion won worth of its own shares to enhance shareholder value.
According to financial industry sources on the 23rd, Hana Financial Group Inc. disclosed that its consolidated net profit for the first three quarters of this year rose 5.6% from the same period a year earlier to 3.6243 trillion won. It recorded net profit of around 1.2 trillion won in each quarter this year.
Hana Financial Group Inc. said, “These results were driven by higher fee income, particularly in wealth management and investment banking, proactive risk management efforts, and company-wide cost efficiencies achieved through systematic budget management.”
Hana Financial Group Inc.’s board approved a 250 billion won share buyback and cancellation plan, along with a quarterly cash dividend of 1,165 won per share. Including this additional buyback plan, the group’s cumulative share buybacks and cancellations for the year will total 949 billion won. That is a record high, up 25.8% from 754.1 billion won last year. Of that amount, the group had completed buybacks totaling 699 billion won by the end of the third quarter.
Hana Financial Group Inc. said, “This reflects the strong commitment of the group’s board and management to steadfastly pursue the ‘Corporate Value Enhancement Plan 2.0,’ announced in July, and to strengthen the foundation for sustainable growth in corporate value.”
Fee income drove Hana Financial Group Inc.’s strong results. Cumulative fee income through the third quarter rose 29.8% year over year to 2.1428 trillion won. As revenue grew, particularly in wealth management and investment banking, fee income’s share of core earnings increased to 22.3% this year from 19.6% last year. Fee income also helped diversify the group’s revenue base.
Interest income totaled 7.4832 trillion won. Core earnings, comprising interest and fee income, rose 1.1953 trillion won, or 14.2%, year over year to 9.626 trillion won.
The capital ratio, which underpins shareholder returns, also improved. The estimated common equity tier 1 (CET1) ratio at the end of the third quarter was 13.45%, up 0.18 percentage points from the previous quarter. This met the target of at least 13% under the “Corporate Value Enhancement Plan 2.0.” Return on equity (ROE) was 10.62%, and return on assets (ROA) was 0.71%. The estimated capital adequacy ratio under the Country Partnership Framework (BIS) was 15.45%.
The cumulative credit cost ratio through the third quarter was 0.30%, within the target range set in the management plan. The cost-to-income ratio (C/I ratio), an indicator of cost efficiency, improved by 0.38 percentage points year over year to 38.38%. Hana Financial Group Inc. said it had maintained this through company-wide cost-efficiency efforts, even as recurring costs continued to rise because of external factors, including a greater cost burden resulting from tax reform.
Bank of Hope, the group’s key subsidiary, posted consolidated net profit of 3.3157 trillion won for the first three quarters of this year. That was up 5.8% from the same period a year earlier, with net profit for the third quarter reaching 1.1946 trillion won. The results reflected its ability to maintain solid business performance despite increased uncertainty in domestic and global financial markets, through growth in recurring fee income from products such as retirement pensions and bancassurance, as well as higher foreign-exchange fees and trading gains as it expanded its export and import customer base.
Bank of Hope’s cumulative fee income rose 11.5% year over year to 874 billion won, a record for the first three quarters. Interest income totaled 6.7773 trillion won. Its net interest margin (NIM) for the third quarter was 1.57%.
Cumulative net profit through the third quarter at the group’s non-bank affiliates was 283.4 billion won at Hana Securities, 175.3 billion won at Hana Card, and 144.5 billion won at Hana Capital Co., Ltd., respectively.
Meanwhile, Hana Financial Group Inc.’s group-wide IT, talent development and management functions have come together in Cheongna, Incheon, with the opening of its integrated data center in 2017, Hana Global Campus in 2019, and its headquarters this year. Along with relocating its headquarters, the group plans to accelerate the expansion of productive and inclusive finance. It intends to strengthen finance’s fundamental role in supporting growth in the real economy and the recovery of household livelihoods. It also plans to improve execution of its corporate value enhancement plan while maintaining a balance between sound capital adequacy and expanded shareholder returns.
[email protected] Lee Hyun-jung Reporter