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Fundamental View
AS OF 04 Feb 2026Hana Financial Group (Hana FG) struggled for several years to make its acquisition of the former Korea Exchange Bank a success, but results improved dramatically in 2015 as revenues grew and cost efficiencies improved. It has produced strong results since 2020.
The group is looking for inorganic growth in its non-bank businesses as it has fallen behind Shinhan FG and KBFG in this area, but has so far shied away from a large acquisition.
Hana Bank has the highest CET 1 ratio among the Korean Big 4 banks.
Business Description
AS OF 04 Feb 2026- Hana FG is the third-largest financial group in South Korea. From small origins as a finance company in the 1970s, after the 1997 Asian crisis, Hana grew by acquiring three other banks, including the much older Seoul Bank, which had a banking and trust management business.
- Hana FG bought Korea Exchange Bank (KEB) from Lone Star in 2012 after overcoming many hurdles, but due to staff union opposition, it could not merge with Hana Bank until 2015.
- Hana FG's overseas business is smaller than its peers, and is complemented by KEB's extensive international operations. KEB was started in 1967 as a government-owned bank specializing in foreign exchange. It had a leading share in FX transactions and trade finance among Korean banks.
- Hana FG has shown good growth in its credit card and securities non-bank businesses, but is less diversified than its larger peers KB and Shinhan, which have also acquired insurance companies. Its latest acquisition (in 2019) was a 15% stake in Vietnam's state-owned Bank for Investment & Development (BIDV).
Risk & Catalysts
AS OF 04 Feb 2026Hana FG’s credit costs at ~30 bp in FY24 and FY25 were lower than peers. However, the group’s NPL coverage ratio was also ~20-30 ppt behind peers.
NIMs are lower than those of KB and Shinhan at both the group and bank levels. The profit contribution from non-bank entities to group profits is also lagging behind these two peers. Both metrics are comparable to Woori’s.
Non-banking businesses have underperformed in recent years, with profit contributions falling from 20–30% in 2019–2021 to around 10%, primarily due to elevated provisions for domestic real estate project financing and valuation losses related to overseas commercial real estate.
Loan growth is expected to be more challenging given tighter regulation on mortgage lending.
Key Metric
AS OF 04 Feb 2026| KRW bn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Pre-Provision Profit ROA | 1.07% | 1.10% | 1.11% | 1.00% | 1.02% |
| ROA | 0.74% | 0.66% | 0.59% | 0.61% | 0.62% |
| ROE | 10.9% | 10.1% | 9.0% | 9.1% | 9.2% |
| Provisions/Loans | 0.16% | 0.34% | 0.46% | 0.32% | 0.31% |
| NPL Ratio | 0.32% | 0.34% | 0.50% | 0.62% | 0.72% |
| CET1 Ratio | 13.8% | 13.2% | 13.2% | 13.2% | 13.4% |
| Equity/Assets | 6.8% | 6.4% | 6.6% | 6.7% | 6.6% |
| Net Interest Margin | 1.66% | 1.83% | 1.82% | 1.69% | 1.73% |
CreditSight View Comment
AS OF 09 Feb 2026Hana FG grew through acquisitions but only in 2015 was it able to merge its two main bank units to form KEB-Hana Bank. Hana’s management has a good record but for some years struggled to extract value from its acquisitions. Its performance for the past few years has generally been strong. More focus has been put on RWA management and capital enhancement since 2H24. The non-bank segment remains a drag. Hana’s credit costs were lower than those of its peers, but this has also resulted in the lowest NPL coverage ratio among the four FGs. The bank LCR and NSFR are low at 105/109% (3Q25). The group aims to maintain a CET1 ratio of 13-13.5%; its bank level CET1 ratio is the highest amongst peers. Insurance M&A is being considered. We have an Underperform recommendation on tight valuations.
Recommendation Reviewed: February 09, 2026
Recommendation Changed: October 31, 2025
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