Value-Up Commitment Expressed by Chairman Ham Young-joo: "We Will Overcome the 'PBR 1x' Barrier"

CEO Expresses Strong Determination in Internal Interview
"The Core is to Build a Sustainable Earnings Structure"

"Over the past three years, our primary focus has been on 'value-up.' This year as well, we will steadfastly pursue shareholder returns by raising the undervalued stock price and increasing the contribution of non-bank earnings."

Hana Financial Group on the 27th released a CEO interview video, the first among domestic financial holding companies, expressing the management's commitment to corporate value enhancement. Chairman Ham Young-joo explains the value-up plans to increase shareholder value of Hana Financial Group. Provided by Hana Financial Group.

Ham Young-joo, Chairman of Hana Financial Group, expressed a strong commitment to implementing value-up in an internal CEO interview on the 27th. This is the first time a CEO of a domestic financial holding company has directly declared a value-up commitment through an interview. The video was conducted in a dialogue format with an in-house announcer.

Chairman Ham revealed specific ambitions to rapidly recover the stock price through shareholder return policies befitting the status of a global financial group and to raise Hana Financial Group’s price-to-book ratio (PBR) to above 1. PBR is an indicator showing how many times the stock price is traded relative to the company’s net assets; generally, a PBR below 1 is interpreted as the stock being undervalued.

Last Year’s Stock Price Increase Exceeded 30%... Continuing the Value-Up Drive This Year

Chairman Ham reflected, "As the group CEO, I have made great efforts over the past three years to expand shareholder returns and achieve value-up based on the group’s solid fundamentals."

As a result, Hana Financial Group raised its stock price by more than 30% last year. This is the highest annual increase in the past three years. Chairman Ham explained that this was a result of meeting market expectations for shareholder returns, such as improving the group’s shareholder return ratio from 26% in 2021 to 38% in 2024.

Chairman Ham pointed out, "Currently, the stock price of domestic financial holding companies is significantly undervalued, trading below a PBR of 1. This is mainly due to lower shareholder return ratios compared to global bank stocks." He added, "Hana Financial Group will continuously expand shareholder returns to achieve a total shareholder return ratio of 50% by 2027."

The group will first fix the total annual cash dividend starting this year and implement equal quarterly cash dividends to increase predictability regarding dividend size. This is to contribute to shareholders’ stable cash flow.

Additionally, the group plans to improve key corporate value indicators such as earnings per share (EPS) and book value per share (BPS) by expanding the proportion of treasury stock repurchases and cancellations. They also plan to gradually increase dividends per share due to the reduction in the number of issued shares. On the 4th, Hana Financial Group decided on the largest-ever treasury stock repurchase and cancellation worth approximately 400 billion KRW since the group’s inception.

The Core of Value-Up is Sustainability... Raising Non-Bank Earnings Contribution to 30%

Ham Young-joo, Chairman of Hana Financial Group (left in the photo), is explaining the value-up plan to enhance shareholder value of Hana Financial Group. Provided by Hana Financial Group.

Chairman Ham also emphasized the need to create a sustainable earnings structure to expand shareholder returns.

He stated, "The core of value-up is to efficiently utilize limited capital and create a sustainable earnings structure," and added, "We will focus on strengthening the non-bank business portfolio." He further revealed plans to "not only ensure that each affiliate of the group has its own competitiveness but also enhance synergy through collaboration among the 14 affiliates, raising the group’s non-bank earnings contribution to 30% in the future."

The common equity tier 1 ratio (CET1), which forms the basis for shareholder returns, will be stably managed within the range of 13.0% to 13.5%. To maintain CET1 above a certain level, the group has also established a capital policy to manage the growth rate of risk-weighted assets at the level of nominal domestic gross domestic product (GDP) growth rate.

This video was released on the group’s website and also made available on the official YouTube channel "HanaTV" to improve accessibility for shareholders. An English-subtitled version was prepared for overseas investors, who account for about 70% of shareholders.

Meanwhile, Hana Financial Group’s stock price has risen approximately 10% from 56,800 KRW at the end of last year to 62,500 KRW as of the close on the 26th.