Hana Financial posts record 9-month profit of W3.62tr

Net profit rises 5.6 percent on-year; fee income jumps 29.8 percent

Hana Financial Group posted a record net profit of 3.62 trillion won ($2.73 billion) in the first nine months of the year, while its share buybacks and cancellations approached 1 trillion won, marking its largest-ever shareholder return.

The group said Friday that its consolidated net profit for the third quarter reached 1.22 trillion won, up 2.4 percent from the previous quarter and 7.8 percent from a year earlier. It was the highest quarterly profit since the group merged with Korea Exchange Bank in 2012.

Net profit for the first nine months totaled 3.62 trillion won, up 5.6 percent from the same period last year and a record high.

Net interest income rose 10.4 percent on-year to 7.48 trillion won over the nine-month period. Non-interest income increased 6.9 percent to 2.17 trillion won, helped by a stock market rally in the first half. Fee income rose 29.8 percent, driving growth in non-interest income, as fees from brokerage, discretionary asset management and trust products increased in the wealth management business.

Trading and valuation gains fell 15 percent as rising interest rates weighed on bond trading results. In the third quarter, the transfer of variable insurance accounts at Hana Life had a one-off impact.

By subsidiary, Hana Bank posted a consolidated net profit of 3.31 trillion won for the first nine months, up 5.8 percent from a year earlier. Its fee income rose 11.5 percent to 874 billion won, a record high for the nine-month period. Growth in recurring fee income from retirement pensions and bancassurance products, along with higher foreign exchange fees and trading gains amid increased export and import transactions, contributed to the improvement.

The bank’s net interest income rose 14.1 percent on-year to 6.78 trillion won. Its net interest margin fell 0.4 percentage point from the previous quarter to 1.57 percent in the third quarter, but loan growth helped support interest income. Household and corporate loans increased 1 percent and 2.3 percent, respectively, lifting won-denominated loans 1.7 percent from the previous quarter.

Hana Securities, Hana Card and Hana Capital posted net profits of 283.4 billion won, 175.3 billion won and 144.5 billion won, respectively, in the first nine months.

Hana Financial’s estimated common equity Tier 1 (CET1) ratio stood at 13.45 percent at the end of the third quarter, up 0.18 percentage point from the previous quarter. The ratio exceeded the group’s target of 13 percent or higher under its Value-up Plan 2.0.

Return on equity stood at 10.62 percent, unchanged from the previous quarter. Return on assets was 0.71 percent, while the estimated Bank for International Settlements capital ratio came to 15.45 percent.

The group’s board on Thursday approved a 250 billion won share buyback and cancellation program and a quarterly dividend of 1,165 won per share as part of efforts to expand shareholder returns. The dividend was up 26.6 percent from a year earlier.

Including 699 billion won in share buybacks completed in the third quarter, the group’s cumulative share buybacks and cancellations for the year reached 949 billion won. That was up 25.8 percent from the full-year total of 754.1 billion won last year, marking a record high.

Hana Financial said its cumulative credit cost ratio stood at 0.30 percent, within the group’s management target. Its cost-to-income ratio improved by 0.38 percentage point from a year earlier to 38.38 percent in the third quarter.