[Click e-Stock] "Hana Financial Group, Further Shareholder Returns Expected if Exchange Rate Falls"

On April 28, Kiwoom Securities stated that Hana Financial Group's shareholder return rate is gradually increasing and that there is potential for further expansion if the exchange rate declines. The firm maintained its "Buy" investment rating and a target price of 86,000 won.

Kim Eungap, a researcher at Kiwoom Securities, explained, "The common equity tier 1 (CET1) ratio for the first quarter stood at 13.23%, up 0.1 percentage points from the previous quarter, indicating a stable level. The shareholder return rate for 2024 reached 38%, and is expected to exceed 40% in 2025."

Kim added, "A share buyback worth 400 billion won is underway in the first half of this year, and there is a high possibility of additional buybacks in the second half. According to the corporate value enhancement plan, a stepwise increase in shareholder returns is possible within the CET1 ratio range of 13.0% to 13.5%."

He particularly pointed out, "If the exchange rate falls, it could have a positive impact on the CET1 ratio, providing room for further strengthening of shareholder returns. Currently, the price-to-book ratio (PBR) is at an attractive valuation level, as it is low compared to the return on equity (ROE), which is above 9%."

Hana Financial Group's consolidated net profit for the first quarter of this year was 1.13 trillion won, up 9.1% from the same period last year. Kim analyzed, "Core profits, including net interest income and fee income, increased by 2.2%, while cost control efforts and management of credit loss expenses were carried out stably."

However, Kim pointed out, "The proportion of non-banking profit in the first quarter was 16.3%. While this is an improvement from 4.7% in 2023, it is still lower than the over 30% levels seen in the past, indicating that further improvement is needed to enhance the group's ROE."