This article first appeared on GuruFocus .
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Net Income:KRW1,210 billion, a 7.3% increase Y-o-Y.
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Core Profit:Expanded 13.6% Y-o-Y.
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Return on Equity (ROE):Increased by 29 basis points Y-o-Y to 10.91%.
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CET1 Ratio:Declined by 29 basis points to 13.09%.
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Interest Income:KRW2,505 billion, a 10.2% growth Y-o-Y.
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Net Interest Margin (NIM):Group NIM at 1.82%, a 4 bp Q-o-Q and 13 bp Y-o-Y improvement.
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Fee Income:KRW667.8 billion, a 28% increase Y-o-Y.
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G&A Expense:KRW1,198.4 billion, with a C/I ratio of 38.8%.
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Loss Provisioning Expense:KRW231.6 billion, a 23.1% decrease Y-o-Y.
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Credit Cost Ratio:0.21%, an 8 bp fall Y-o-Y.
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NPL Coverage Ratio:95.6%, a 19.6 percentage point drop Y-o-Y.
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Dividend Per Share (DPS):KRW1,145, a 26.4% increase from the previous year.
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Release Date: April 24, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Hana Financial Group Inc ( XKRX:086790 ) reported a 7.3% year-over-year increase in net income for Q1 2026, exceeding market expectations.
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The group's core profit expanded by 13.6% year-over-year, driven by growth in interest income and fee income.
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Hana Financial Group's return on equity (ROE) increased by 29 basis points year-over-year to 10.91%, indicating improved earnings capacity.
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The group approved a share buyback and cancellation of KRW200 billion, along with a quarterly cash dividend of KRW1,145 per share, reflecting a commitment to shareholder returns.
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Hana Securities achieved a 203.9% year-over-year increase in brokerage fee income, contributing to a 28% year-over-year increase in group fee income, marking a historic high.
Negative Points
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The group's Common Equity Tier 1 (CET1) ratio declined by 29 basis points from the end of the previous year to 13.09%, due to Basel III transitional arrangements and a weak Korean won.
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Group's disposition and valuation gain in Q1 decreased by 67.2% year-over-year, primarily due to FX translation loss and weaker bond performance.
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The group's non-performing loan (NPL) coverage ratio dropped by 19.6 percentage points year-over-year to 95.6%, indicating a temporary fall below 100%.
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Despite a decrease in loss provisioning expense, the group's delinquency and NPL ratios increased year-over-year, posing potential risks to asset quality.
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Hana Securities' ROE was reported at less than 7%, which is lower compared to other securities subsidiaries, indicating room for improvement in profitability.
Q & A Highlights
Q: Can you provide margin guidelines for this year given the recent uplift in NIM? Also, any updates on your share return policies considering the CET1 ratio? A: In Q1, we experienced a better-than-expected NIM uplift due to market rate changes and portfolio rebalancing. While growth may be limited in the second half due to regulatory changes, we expect the upward trajectory to continue. Regarding CET1, we plan to provide a clearer picture of our shareholder return policies after reviewing our earnings trend until Q2.
Q: Your credit costs and loan loss ratios appear low. What is your outlook on credit cost ratio given the increase in NPL and delinquency ratios? A: There was a one-off reversal of provisioning in Q1, which will not recur in Q2. We expect credit costs to normalize, aiming for a mid-30 bp credit cost ratio by year-end. We are monitoring alternative investments and real estate project financing, which could increase in Q2.
Q: How do you plan to improve nonbanking profitability, particularly in securities, given the current market share and ROE challenges? A: We are focusing on strengthening our Wealth Management (WM) and digital channels. A new MTS will be launched in May, and we are expanding our branch network. We aim to increase our brokerage market share and improve Hana Securities' competitiveness as a core part of Hana Financial Group.
Q: Can you break down the factors affecting the CET1 ratio, and how will this impact your shareholder return strategy? A: The CET1 ratio was impacted by a 25 bp effect from exchange rate changes and an 8 bp effect from Basel III transition measures. We plan to increase cash dividends by around 10% YoY and aim to reach a 50% total shareholder return earlier than planned. We are shifting focus towards increasing cash dividend payouts.
Q: What are your plans for promissory note issuance and overseas investments in securities? A: We plan to issue KRW2-3 trillion in promissory notes this year, potentially reaching KRW6 trillion by 2027-2028. Overseas alternative investments are well managed, and we expect normalization by 2027.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
