Hana Bank's Record Profit
Bank attributes first-half earnings to large NIM, non-interest income
The Hana Bank generated net profit totaling 443.2 billion won in the first half this year, up 23.1 billion from the same period last year, which is the largest in the bank? history.
The bank's board of directors resolved that the bank's profit before loan loss provisions amounted to 667.4 billion won, with ROA standing at 1.12 percent, ROE 18.39 percent and the ratio of non-performing asset at 1.09 percent. They also declared a 7 percent dividend for shareholders.
The bank's envious performance record has been attributed to flourishing activities across a wide spectrum of the bank's business, bringing an increase in good quality assets which rose to 4.690.4 trillion won at the end of June. The bank's total assets reached 99.550.4 trillion won in the first half.
Net interest margin (NIM) jumped to 2.19 percent in the second quarter from 2.06 percent in the first quarter. Non-interest income also rose by 24.4 billion won, bringing such a large increase in net profit. Total assets saw a sizeable increase in the first half, but its soundness also increased with the ratio of non-performing assets down 0.58 percent from the previous year to 1.09 percent in the first half. The coverage ratio improved by 16.66 percent to 127.4 percent.
Bank officials said the first half of this year had a superb record despite the payment of 97 billion won in corporate taxes, thanks mainly to flourishing banking activities across the board and they were certain that the bank would be able to expand its total assets to surpass 100 trillion won in the second half.
The bank's goal this year is to build a superb integrated financial network base to cope with hardening competition among banks amid diversifying financial needs of customers. The bank plans to strengthen its role in building such network among related companies and maximize its synergy effect.
The bank's management strategy for the second half would be pushed in the following direction:
-Expand capital and assets through risk management.
-Pursue Basel II and build the most desirable portfolio to expand NIM.
-Strengthen networking among Hana Financial Group affiliates.
-The settlement of the Hana business culture to lead Hana to be one of the best banks in the world.
In the second half, the bank will try to increase its total assets to amount to 100.800 trillion won, 950 billion won in pre-tax profit, ROA of 1.09 percent, 19.46 percent ROE, 12.10 percent in BIS ratio, 2.42 percent in NIM, expand capital and good quality assets through risk management and pursue Basel II and build most desirable portfolio to hike NIM. Strengthen Hana Financial Group networking and the settlement of the Hana culture to lead Hana to be one of the best banks in the world.
To achieve these goals, the bank will pursue the following steps: the bank will focus on core business areas, develop products tailored to the needs of customers and restructure its assets and expand the bank? superb position in the VIP financial market, expand the sale of the second round bancassurance products, expand the sale of indirect products and spur asset management. Also strengthen the role of investment banking in link with stocks and networking; Strengthen customer care, and expand the market base by spurring foreign exchange transaction; Maximize NIM through yield rates in securities deals and expand the size of low-cost funds; and expand Hana corporate culture with evaluation of performance and reimbursement based on the evaluation and develop a next generation support system.
The bank will focus on the operation of credit card faced with narrowing NIM and increase non-interest income. More new credit card products will be developed in the second half, also, with no lag behind the first half marketing operation, which launched 17 new credit card products in the market. The bank will promote cross-sale of beneficiary funds taking advantage of its takeover of Daehan Investment and Securities Co. with a goal for increased non-interest earnings. nw
Hana Bank President Kim Jong-yol.