Chairman Kim Jung-tai of Hana Financial Group. (Photo: Hana Financial Group)]

Hana Financial Group posted its best-ever business performance in the first half of 2021 thanks to the growth of its non-banking business. The financial group decided to pay a dividend of 700 won per share.

Hana Financial Group announced on July 22 that it recorded 1,753.2 billion won in net income in the first half of the year, logging a 30.2 percent increase from a year earlier.

Its net profit in the second quarter stood at 917.5 billion won, up 33.2 percent from a year earlier.

The results are attributable to the steady growth of its non-bank business such as Hana Financial Investment and its sufficient loss absorption capacity for internal and external uncertainties.

In fact, Hana Financial Investment, a major non-bank affiliate, recorded net profit of 276 billion won in the first half, an increase of 60 percent from a year earlier.

Net profit swelled thanks to increases in acquisition arrangement and advisory fees.

Hana Card racked up 142.2 billion won in net profits and Hana Capital 125.5 billion won, respectively, as they grew 117.8 percent and 49.3 percent, respectively, from a year ago.

As a result, the proportion of profits made by the non-banking sector increased by 7 percentage points to 37.3 percent in the first half of this year from 30.3 percent in the first half of 2020.

Hana Bank also achieved solid business performances in the first half of this year. Its net income in the first half of the year totaled 1,253.0 billion won, up 17.9 percent from a year earlier.

“Hana Bank enhanced sales performances of major non-face-to-face products and an increase in core low-interest deposits caused by abundant liquidity,” a Hana Financial Group official explained.

In the first half, Hana Bank’s core profit - which combines interest income (2,915.7 billion won) and commission income (377.7 billion won) - rose 7.9 percent, or by 242 billion won on year to 3,293.4 billion won.

Hana Financial Group’s core profit which combines interest profit (3,254.0 billion won) and commission profit (1,261.3 billion won) stood at 4,515.3 billion won in the first half of the year. The financial group logged a net interest margin of 1.67 percent.

Hana Financial Group’s efficient risk management at the group level and continuous efforts to improve asset soundness steadily stabilized soundness indicators.

In the first half of this year, its NPL coverage ratio inflated by 11.2 percentage points to 151.3 percent.

Its NPL The ratio stood at 0.36 percent, making a 4-bp improvement and a 2-bp improvement, respectively compared to the previous quarter, respectively. Its loan-loss cost ratio stayed at 0.12 percent, down by 15 bps from a year earlier.

The stable management of risk-weighted assets and a steady increase in net income, the group’s BIS ratio estimate stood at 16.60 percent, up by 28 bps from the previous quarter. I

ts return on equity (ROE), a major management indicator, rose by 29 bps from the previous quarter to 11.25 percent and its return on assets (ROA) by 2 bps to 0.76 percent.

In the meantime, Hana Financial Group announced on Aug. 1 that it completed selection work for the 100 Daycare Center Project, an environmental, social, governance (ESG) management activity by selecting 21 additional national and public daycare centers this year.

The financial group has pushed forward with the project since May 2018. According to Hana Financial Group, among the 21 additional sites selected this time were Heuksan Island in Sinan-gun, Jeollanam-do and Sabuk-eup in Gangwon-do.

In the case of Heuksan Island, a daycare center is currently running temporarily at Heuksan Island General Welfare Center as the island’s only daycare center facilities has become too old to use.

Hana Financial Group decided to build a new daycare center because it believes multi-use facilities for residents and tourists and nursing facilities are in the same welfare center building so infants can be exposed to infectious diseases in the building.

Since 2018, Hana Financial Group has built a total of 43 daycare centers through the 150-billion-won daycare center project.

A total of 100 daycare centers will be completed by 2023, including 57 currently under construction.