Hana Financial Group (086790) H1 2024 earnings summary

Executive summary

• Net income for the first half of 2024 ranged from KRW 2,068.7 billion to KRW 2,087.1 billion, up 2.4% year-over-year, with over KRW 1 trillion in net income for two consecutive quarters, driven by strong fee income and cost control.

• Fee income rose 12.6% year-over-year, led by credit card and IB fee growth.

• Cost-to-income ratio remained under 40% despite upward cost pressures.

• Credit cost ratio was stable at 0.24% YTD, reflecting preemptive provisioning and write-backs.

• Key one-off items in Q2 included social contribution expenses, FX translation losses, PF provisions, and significant provision write-backs.

Financial highlights

• Net interest income for H1 2024 was KRW 4,381.6 billion; net fee income was up to KRW 1,213.3 billion.

• Group NIM declined to 1.69% in Q2 2024, with Hana Bank NIM at 1.46%, both down quarter-over-quarter.

• Cost-to-income ratio was 38.7%, with some sources reporting 33.8%.

• Q2 non-interest income was KRW 556.4 billion, down 22% quarter-over-quarter due to lower trading gains and FX losses.

• SG&A expenses increased 2.1% year-over-year, mainly from higher salaries and taxes.

Outlook and guidance

• Policy rates in the US and Korea are expected to fall in the second half, pressuring interest income.

• CET1 ratio targeted at 13–13.5%, with plans to return 50% of excess capital within this range.

• Credit cost is projected to rise to around 30 bps by year-end, mainly due to household and SOHO loan delinquencies.

• Value-up plan to enhance shareholder value will be announced in the second half, focusing on implementable metrics and capital efficiency.

• Focus will shift to RWA control and profitability, with limited additional loan growth expected in the second half.