Hana Financial Group Enjoys Highest Business Performance in Eight Years in First Half of 2020
Hana Bank signs business agreement with Seoul Metropolitan Government to support fintech startups
Chairman Kim Jung-tai of Hana Financial Group (Photo: Hana Financial Group)
Hana Financial Group made an announcement on July 23 that it posted 1,344.6 billion won in net profit on a consolidated basis in the first half of 2020.
The figure was up 11.6 percent (140.1 billion won) from the same period of 2019 and the highest semiannual performance ever since 2012. The interim dividend will remain at 500 won per share as it did in 2019.
“In the non-banking sector, its net profit increased by 106.9 billion won on year to 407.9 billion won while it inflated by 66.7 billion won on year to 169.5 billion won in the global sector,” Hana Financial Group explained.
In terms of proportions, the figure in the non-banking sector swelled by a 5.3 percentage points from 25 percent in the first half of 2019 to 30.3 percent in the first half of 2020.
In the global sector, the figure rose by a 4.1 percentage points from 8.5 percent in the first half of 2019 to 12.6 percent in the first half of 2020.
An increase in net income in the non-banking sector pushed up the Hana Financial Group’s net profit. Hana Financial Investment posted 172.5 billion won in net profit of (a year on year increase of 19.7 billion won), Hana Capital 84.1 billion won (a year on year increase of 37.1 billion won), and Hana Card 65.3 billion won (a year on year increase of 31.6 billion won) in the first half of 2020.
In order to secure a sufficient loss absorption capacity for COVID-19, the group set aside 432.2 billion won in provisions among others as transferred funds in the second quarter. The figure was an increase of 339.1 billion won from the previous quarter.
As of the end of the first half, transferred funds including provisions shot up 112.5 percent (278.1 billion won) on-year to 525.2 billion won, significantly strengthening the Hana Financial Group’s overall ability to absorb losses.
The group posted 3,442.2 billion won in core net profit, which combined interest income (2,861.3 billion won) and commission income (1,080.9 billion won) in the first half of 2020.
Its net interest margin (NIM) stood at 1.62 percent the same as the previous quarter.
Its return on equity (ROE), a key measure of profitability, rose 0.06 percentage points to 9.44 percent from the previous quarter while its return on assets (ROA) arrived at 0.63 percent, the same as the previous quarter.
The group’s NPL coverage ratio rose 20.4 percentage points on year to 126.8 percent. Its delinquency rate stood at 0.31 percent at the end of the second quarter, the same as the end of the previous quarter.
Bad loans accounted for 0.45 percent of its total lending, down 0.02 percentage point from the end of the previous quarter.
The Hana Financial Group’s stable management of risk-weighted assets and robust net income pushed up its BIS ratio estimate by 0.28 percentage points from the previous quarter to 14.08 percent.
The ratio of common stock capital was estimated at 12.04 percent, up 0.14 percentage points from the previous quarter.
In the meantime, Hana Bank announced on July 30 that it signed a business agreement with the Seoul Metropolitan Government in order to support fintech startups’ growth and global business at the Seoul Metropolitan Government’s Second Complex in Seoul.
The agreement was signed to promote the creation of a sound fintech ecosystem and the development of the financial industry in cooperation between the public and private sectors.
Based on this agreement, Hana Bank 1Q Agile Lab and Seoul Fintech Lab, both of which are startup support centers, plan to develop joint programs on discovering promising fintech startups, supporting their growth and attracting investment in them from Korean and foreign investors and actively promote exchanges with each other.
In particular, Hana Bank will open the 1Q Agile Lab Global Center within the second half of 2020.
The center will provide office space and growth support programs to select global startups hoping to make a foray into Korea and expand their business areas in cooperation with the Seoul Metropolitan Government and help them settle in the Korean market.