Hana Financial Group (086790) Q3 2024 earnings summary

Executive summary

• Q3 2024 cumulative net income reached KRW 3.225 trillion (₩3,225.4bn), up 8.3% year-over-year, with quarterly net income at KRW 1.157 trillion, marking record highs for both periods, driven by strong non-interest income and improved non-bank affiliate performance.

• Shareholder returns enhanced with a cumulative KRW 450 billion share buyback and cancellation, and a quarterly cash dividend of KRW 600 per share, reflecting strong capital adequacy.

• Group CET1 ratio improved to 13.17% at Q3 end, up 37 bps quarter-to-date, supported by RWA management and KRW appreciation.

• Asset quality showed some deterioration, but credit cost ratio remained stable due to high collateral and preemptive provisioning.

• A new corporate value enhancement plan was introduced, targeting increased shareholder returns and improved capital efficiency.

Financial highlights

• Cumulative fee income for Q3 was KRW 1.501 trillion, up 11.9% year-over-year, led by credit card fees, IB business, and operating leases.

• Non-interest income rose 6.4% year-over-year to KRW 1.805 trillion, with disposition and valuation gains up 18.9% year-over-year.

• Group NIM in Q3 was 1.63%, down 6 bps quarter-on-quarter, reflecting market rate pressures.

• General operating income slightly decreased by 0.9% year-over-year to KRW 8,382.2 billion; interest income declined 2.8% year-over-year.

• SG&A expenses increased 3.5% year-over-year, with a cost-to-income ratio of 39.5% for Q3 2024.

Outlook and guidance

• NIMs expected to rebound slightly in Q4 as loan balance rates stabilize and funding costs improve.

• CET1 ratio targeted at 13% or above, with Q4 projection at 13.2% or higher, maintaining a conservative asset growth stance.

• Shareholder return ratio to gradually increase, aiming for 50% by 2027.

• Management expects moderate economic recovery in Q4 2024, with export growth and gradual improvement in domestic demand.

• Guidance for capital return includes ongoing quarterly dividends and additional share buybacks, subject to capital adequacy.