Hana Financial Group Reports Q1 Net Profit of 1.034 Trillion KRW, Down 6.2% YoY

Hong Kong ELS Customer Compensation Cost 179.9 Billion
Partially Offset by Interest and Fee Income

Hana Financial Group announced on the 26th that its net profit for the first quarter was 1.034 trillion KRW, a decrease of 6.2% (68.2 billion KRW) compared to the previous year.

The decline in net profit was due to large one-time expenses. These included approximately 179.9 billion KRW in customer compensation costs related to Hong Kong H Index (Hang Seng China Enterprises Index·HSCEI) based equity-linked securities (ELS) and 81.3 billion KRW in foreign exchange (F/X) translation losses from forward contracts caused by the rise in exchange rates.

Hana Financial explained that despite the large one-time expenses, they delivered results exceeding market expectations by expanding core earnings such as interest income and fee income. The core earnings for the first quarter, combining interest income (2.2206 trillion KRW) and fee income (512.8 billion KRW), totaled 2.7334 trillion KRW, an increase of 4.3% (113.2 billion KRW) compared to the same period last year.

The cost-to-income ratio (CIR), a management efficiency indicator, improved by 0.1 percentage points from the same period last year to 37.4%. Key profitability indicators recorded a return on equity (ROE) of 10.44% and a return on assets (ROA) of 0.7%.

Looking at the operating results of major affiliates, Hana Bank’s net profit for the first quarter was 843.2 billion KRW, down 13.1% year-on-year due to the impact of ELS loss compensation. Hana Securities posted a net profit of 89.9 billion KRW in the first quarter, driven by balanced growth across key business divisions such as wealth management (WM) and sales & trading (S&T). Hana Capital (60.2 billion KRW), Hana Card (53.5 billion KRW), Hana Asset Trust (18.1 billion KRW), and Hana Life Insurance (4.5 billion KRW) also recorded net profits respectively.

On the same day, Hana Financial’s board of directors resolved to pay a quarterly dividend of 600 KRW per share to enhance shareholder value. The 300 billion KRW share repurchase program announced at the beginning of the year is expected to be completed within the second quarter, and all repurchased shares will be canceled.