[Exclusive] Expanding Non-Banking under 'Ham Young-joo 2nd Term'... Hana Asset Management Group Subsidiary Planned

Hana Asset Management, a Subsidiary of Hana Securities, Considered for Promotion to Group Subsidiary Status
Chairman Ham Youngjoo: "We Must Strengthen Non-Banking Competitiveness by Expanding Synergy Among Affiliates"

Ham Young-joo, Chairman of Hana Financial Group. Provided by Hana Financial Group. Photo by Yonhap News.

Hana Financial Group is considering elevating Hana Asset Management, a 100% subsidiary of Hana Securities, to a group subsidiary status. This move aims to strengthen competitiveness by expanding the existing financial portfolio, which was heavily focused on banking, into the non-banking sector amid an unfavorable domestic and international environment surrounding the banking industry, including the onset of a full-scale interest rate cut cycle this year. In particular, since Chairman Ham Young-joo emphasized strengthening the non-banking sector in his New Year's address, it is interpreted as a plan to maximize synergy among group affiliates by promoting Hana Asset Management to a group subsidiary.

According to the financial sector on the 11th, Hana Financial Group plans to elevate Hana Asset Management, a 100% subsidiary of Hana Securities, to a group subsidiary as part of its non-banking sector strengthening measures this year. Hana Asset Management was launched as a 100% subsidiary of Hana Securities in October 2023, when its parent company, Hana Securities, acquired a 51% stake held by Swiss investment bank UBS. After being incorporated as a subsidiary of Hana Securities, Hana Asset Management is set to be promoted to a subsidiary of Hana Financial Group within about a year.

Hana Financial's move to strengthen the non-banking sector stems from the urgent need to no longer rely solely on bank interest income to guarantee the overall profitability of the financial holding company. Last year, Hana Financial Group recorded a net profit of 3.7388 trillion KRW, achieving its highest-ever performance, but its high dependence on banking is seen as a limitation. Hana Financial Group's banking dependence stands at 84%, which is lower than Woori Financial Group's 91.6% among the four major financial holding companies but higher than KB Financial Group's 60% and Shinhan Financial Group's 74%. Notably, KB Financial Group, which became the first financial holding company last year to join the '5 trillion KRW net profit club,' owes much of its success to contributions from non-banking affiliates, which carries significant implications. Accordingly, strengthening the non-banking sector is the key agenda for all financial holding companies, including Hana Financial, this year.

Chairman Ham Young-joo emphasized strengthening the non-banking sector in his New Year's address this year. He stated, "In the rapidly changing financial environment and fierce competition, the top priority for survival is to secure sustainable value creation capabilities," adding, "The focus should be on strengthening the competitiveness of the non-banking sector and creating sustainable performance by expanding synergy among all group affiliates." While the past strategy was to grow through mergers and acquisitions (M&A), the new strategy is to solidify internal capabilities and maximize synergy among affiliates to diversify the revenue base.

Hana Asset Management is expected to generate significant synergy with affiliates, including Hana Bank, particularly in the retirement pension sector. Last September, Hana Asset Management launched the 'Hana The Next' Target Date Fund (TDF) retirement pension product. This product was introduced when CEO Kim Tae-woo took office, expressing his ambition that "Hana Financial Group will take a leap to become the number one retirement pension provider." It was a confidently launched product, and as of the end of last month, the six vintages of Hana The Next TDF (2030, 2035, 2040, 2045, 2050, 2055) achieved cumulative returns of 8-11%, ranking first in returns for each vintage.

Last month, Chairman Ham personally visited the headquarters of Hana Asset Management and received a business status report from CEO Kim. Although this was Chairman Ham's third visit to Hana Asset Management, it was the first time he received a business report.

Hana Financial plans to elevate Hana Asset Management to a subsidiary this year and strengthen its product lineup, including Exchange-Traded Funds (ETF) and TDFs, next year. Furthermore, the group aims to increase its Assets Under Management (AUM) by 2027. Through these efforts, Hana Financial plans to expand the non-banking sector's net profit from 267 billion KRW (16%) last year to 1.6 trillion KRW this year, increasing its share to over 30%.