Hana Financial Group (086790) H1 2024 earnings summary

Executive summary

• Net income for the first half of 2024 was reported as KRW 2,687 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%, reflecting preemptive provisioning and write-backs.

• Interim consolidated financial statements reviewed by Deloitte for the six months ended June 30, 2024, with no material misstatements found under K-IFRS 1034.

Financial highlights

• First-half group fee income rose 12.6% year-over-year to KRW 1,032.8 billion, led by credit card and IB fee growth.

• Group NIM declined 8 bps quarter-over-quarter to 1.69%; Hana Bank NIM dropped 9 bps to 1.46%.

• Q2 interest income fell 2.7% quarter-over-quarter; first-half interest income decreased 0.6% year-over-year.

• Non-interest income declined due to higher FX translation losses, but fee income was robust.

• 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.

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

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

• The group targets a CET1 ratio of 13–13.5% and plans to return 50% of excess capital within this range.

• No significant impact from the global minimum tax (Pillar 2) is expected for the current period.