Hana Financial Group Logs 2,637.2 Bln Won in Net Income in 2020, Up 10.3% from 2019
Attributes its growth to the non-banking sector’s strong performance and the diversification of business portfolio
Chairman Kim Jung-tai of Hana Financial Group (Photo: Hana Financial Group)
Hana Financial Group said in early February that it has racked up 2,637.2 billion won in net income in 2020, including 532.8 billion won in the fourth quarter on a consolidated basis.
The figure was an increase of 10.3 percent (245.7 billion won) compared to the previous year.
Hana Financial Group attributed the increase to its company-wide cost reduction efforts, improvements in business performances by the non-banking sector and the diversification of the business portfolio and sales channels despite one-off costs caused by the recognition of preemptive provisions and expenses related to private equity funds and special retirements.
The group’s core profit, which combines interest income (5,814.3 billion won) and commission income (2,255.7 billion won), climbed 1.8 percent (145.4 billion won) from the previous year to 8,070 billion won.
During the fourth quarter, the group posted 847.3 billion won in accumulated loan-loss provisions including a transfer of 276.9 billion won in 2020.
In particular, Hana Financial Group accumulated a total of 337.7 billion won annually in loan-loss provisions with reference to the COVID-19 crisis by setting aside 108.2 billion won in the fourth quarter. The group recognized 220.7 billion won annually in the fourth quarter, recognizing 112.6 billion won in preemptive private equity-related expenses.
At the end of 2020, the group’s NPL ratio stood at 0.40 percent, which was an improvement of 8 bp compared to the previous year. Its delinquency rate reached 0.26 percent, down 4 bp from the end of the previous year, maintaining steady stability.
Hana Financial Group’s sales and administrative expenses fell 4.6 percent year on year, or 189.4 billion won on the back of its overall cost-cutting efforts despite special retirements. Its C/I ratio also fell 5.3 percent year on year to 45.3 percent, boosting the group’s cost efficiency.
Hana Financial Group’s net interest margin (NIM) stood at 1.54 percent in the fourth quarter. As of the end of 2020, the group recorded 593 trillion won in total assets, including 133 billion won in trust assets.
Hana Bank posted 2,010.1 billion won in net profit on a consolidated basis in 2020, including 355.7 billion won in the fourth quarter. The figure was a decrease of 6.1 percent (129.7 billion won) from the previous year.
The decrease was blamed on a low interest rate and an unfavorable business environment amid the spread of the COVID-19 virus.
The bank’s core profit, which combines interest income (5,307.8 billion won) and commission income (711.3 billion won), hit 6.19 billion won, down 4.5 percent (281.3 billion won) from the previous year.
The bank’s sales and administrative expenses fell by 10.2 percent (337.5 billion won) from the end of 2019 due to the effects of reducing labor costs for special retirements and efforts to reduce costs across the board in 2019.
Hana Bank’s NPL coverage ratio stood at 130.1 percent at the end of 2020, up 36 percentage points from the end of 2019.
Its nonperforming loan ratio fell by 5bp to 0.34 percent from the end of 2019. Its delinquency rate dropped to 0.19 percent during the same period. Therefore, the lender maintained the stable soundness of its assets.
As of the end of 2020, Hana Bank’s total assets stood at 462 billion won including 71 billion won in trust assets.
As for non-banking affiliates, Hana Financial Investment posted 410.9 billion won in net income in 2020, up 46.6 percent (130.6 billion won) from the previous year as its overall profit-making capabilities such as securities brokerage, acquisition arrangement and advisory fees improved amid a favorable environment in which stock trade volume surged.
Hana Capital racked up 177.2 billion won in net income, up 64.5 percent (69.4 billion won) from 2019 on the back of an increase in interest income from the expansion of blue-chip retail assets.
Hana Card’s net income hit 154.5 billion won, up 174.4 percent (98.2 billion won) from 2019 thanks to increased commissions for card services and higher cost-effectiveness based on digital innovation.
Hana Asset Trust posted 80.8 billion won in net income, up 23.0 percent (15.1 billion won) from a year before and Hana Life Insurance 26.6 billion won, up 12.3 percent (2.9 billion won).