This article first appeared on GuruFocus .
Release Date: July 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 record high first-half net income of 2,402.9 billion Korean won, marking a 4.4% increase year-over-year.
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The group's interest income grew by 7.1% year-over-year, driven by Hana Bank's healthy net interest margin (NIM) improvement and Korean Won loan growth.
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Fee income increased by 37.7% year-over-year, supported by asset management-related fees and a bullish stock market.
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The company announced a strategic partnership with Dunamu to leverage digital asset-based financial services, aiming to achieve a revised ROE target of 12%.
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Hana Financial Group Inc ( XKRX:086790 ) plans to increase total cash dividends by at least 10% annually until reaching a payout ratio of 40%, enhancing shareholder value.
Negative Points
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The group's Q2 net income decreased by 1.4% quarter-over-quarter, affected by temporary decreases in insurance profit and provisioning expenses due to a large business group filing for corporate rehabilitation.
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Despite an increase in shareholder return ratio to 47% in 2025, Hana Financial Group Inc ( XKRX:086790 ) still faces a relatively low valuation compared to global peers.
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The group's CET1 ratio posted a slight decline of 2 basis points quarter-over-quarter, pressured by the depreciation of the Korean won.
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Non-performing loan (NPL) ratio increased by 13 basis points quarter-over-quarter, with a significant rise in newly classified NPLs due to corporate rehabilitation filings.
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The group's G&A expenses rose by 9.8% year-over-year, driven by increases in salary, benefits, and taxes, impacting overall profitability.
Q & A Highlights
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Q: Interest income decreased despite growth in interest-bearing assets and a positive NIM. Can you explain the technicals behind this? Also, regarding your shareholder return formula, why use actual ROE instead of target ROE, and what if actual ROE is lower than expected? A: Jong Woo Park, Group CFO: The decrease in interest income is due to a distortion effect related to variable insurance, impacting interest expenses by around 290 billion. Regarding the shareholder return formula, our goal is to achieve at least a 50% shareholder return in 2026, and we are committed to maintaining this level going forward.
Q: What are your concrete plans to achieve the 12% ROE target, and when do you expect to meet this target? Also, how do you plan to increase retail investor contributions? A: Jong Woo Park, Group CFO: We aim to achieve the 12% ROE target by strengthening bank competitiveness, normalizing non-banking operations, and pursuing new growth drivers. For retail investors, we are leveraging tax exemption dividends and have been actively engaging with them through offline meetings and partnerships.
Q: The group margin is higher than the bank's margin. Was there any one-off explaining this difference? What is your outlook for margins and income in the second half? A: Chie Shin Kang, CRO: The group NIM was higher due to the credit card NIM increase and reversal of some merchant fees. For the second half, we expect to maintain a neutral NIM around 1.60, considering market rate changes and loan cycle dynamics.
Q: How do you plan to manage RWA growth and improve ROE for subsidiaries, particularly in securities? A: Jong Woo Park, Group CFO: We aim for a TSR of 50% or higher, managing RWA growth in line with economic conditions. Dongsik Kim, CFO of Hana Securities, added that they aim to achieve a 10% ROE in the second half and 12% within three years through structural improvements and market expansion.
Q: Regarding shareholder return, how do you prioritize between share buyback and dividends? A: Jong Woo Park, Group CFO: We plan to increase total cash dividends by 10% each year until reaching a 40% payout ratio. Any additional profits will likely be used for share buybacks, following our default mechanism.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
