Steadily steps up efforts to boost operational efficiency and enhance risk management
Chairman Kim Jung-tai of Hana Financial Group (Photo: Hana Financial Group)
Hana Financial Group announced that it posted 657 billion won in net income on a consolidated basis in the first quarter of 2020.
This is an increase of 20.3 percent or 110 billion won in net profit from the same period in 2019. The increase is attributable to the fact that Hana Financial Group steadily endeavored to boost internal cost efficiencies and strengthen risk management.
The non-bank and international sectors contributed to an improvement to its business performances, despite challenges such as irregular interest rates and the spread of the COVID-19 virus.
The group’s core income, which combines interest income (1,428.0 trillion won) with commission income (532.6 billion won) increased 0.6 percent (by 12 billion won) to 1,960.6 billion won from a year before.
This is because loan assets grew properly with a proactive response to domestic companies' financing demands. Hana Bank and Hana Card’s net interest margins (NIMs) declined due to lower interest rates and reduced credit card payments due to the aftermath of the COVID-19 virus.
The group’s NIMs arrived at 1.62 percent, down 6bp from the previous quarter due to a drop in the market interest rate.
The group’s sales and administration expenses during the first quarter touched 927.9 billion won, a decrease of 12.1 percent (127.2 billion won) compared to the same period the previous year due to the base effect of approximately 120 billion won for special retirements implemented in the first quarter of 2019, and ordinary cost reduction efforts.
The C/I ratio also improved by 5 percentage points year on year and 48.7 percent, down 1.7 percentage points from the previous quarter, significantly boosting cost efficiency. The group’s overall asset quality indicators are at a stable level.
Through an asset growth strategy centered on asset quality, the amount of transfers such as loan loss provisions shrank by 43.6 percent (718 billion won) in the first quarter, compared to the same period of the previous year, and the group's credit cost during the first quarter of 2020 dropped by 12bp to 0.13 percent thanks to risk management efforts.
At the end of the first quarter, the group's delinquency rate stood at 0.31 percent, a 1 bp increase from the previous quarter, and its substandard loan ratio fell 1 bp from the previous quarter to 0.47 percent, reflecting the group’s good asset quality.
Hana Bank posted 554.6 billion won in net income in the first quarter based on a consolidated basis. This is an increase of 15.6 percent (74.7 billion won) compared to the same period a year ago thanks to the stable management of selling general & administrative expenses.
In the first quarter, Hana Financial Investment posted 46.7 billion won in net profit, down 25.2 percent (15.8 billion won) from the same period of 2019. Hana Card posted net profit of 30.3 billion won, an increase of 66.1 percent (12.1 billion won) compared to the same period in 2019.
Hana Capital, Hana Life Insurance and Hana Asset Trust posted 44.2 billion won, 19 billion won and 19.6 billion won in net profit, respectively, on a consolidated basis.
Hana Financial Group announced that it had decided to actively support the prevention of the novel coronavirus and help those suffering from the virus.
Accordingly, on Feb. 27, Hana Financial Group donated one billion won to the National Disaster Relief Association to prevent the epidemic from spreading and to help promptly recover.
Hana Financial Group focused on giving support to medical staff in the Daegu and Gyeongbuk areas, which were declared a special disaster area.