Hana Bank at record profit; office bets hit Hana Securities

South Korea’s Hana Financial Group on Wednesday reported a dip in net profit in 2023, with record earnings at its flagship Hana Bank offset by massive valuation losses from its brokerage arm’s overseas real estate investments.

The country’s leading financial services group posted 3.45 trillion won ($2.6 billion) in net profit last year, a 3.3% drop from the prior year’s 3.57 trillion won profit. It marked the group’s first on-year decline in net profit since 2013.

Hana Bank chalked up a record profit of 3.48 trillion won, driven by a surge in non-interest income such as fee income and investment gains.

By contrast, Hana Securities suffered 270.8 billion won in shortfalls in 2023, battered by valuation losses of 267 billion won on its overseas real estate portfolio.

The brokerage company was among the most aggressive South Korean real estate investors in Europe and other countries in the late 2010s. However, a plunge in their values and failure to sell down some of the assets took a heavy toll on the company.

Hana Financial’s net interest margin fell by 0.20 percentage point to 1.76% in the fourth quarter of last year, compared to the same period a year earlier. On the other hand, fee income increased 5.4% on-year to 1.8 trillion won.

Overall, its non-interest income spiked 65.3% on-year to 1.1 trillion won in 2023, with investment gains skyrocketing 453.2% on-year to 863.1 billion won. 

Other units, including credit card and life insurance subsidiaries, underperformed. Hana Savings swung to a loss.

Last year, Hana Financial set aside 370.9 billion won in loan-loss provisions.

The group said it will return half its earnings to shareholders in the medium to long term, up from 33% in 2023.

It decided to pay 1,600 won in fourth-quarter dividend per share, bringing its annual dividend payout to 3,400 won last year, versus the previous year’s 3,350 won.

Write to Jae-Won Park at wonderful@hankyung.com
 


Yeonhee Kim edited this article.