Hana Financial Group

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Hana Financial Group
Hangul:	하나금융그룹
Revised Romanization:	Hana Geumyung Group

Hana Financial Group Inc. KSE: 086790 is a South Korean holding company whose flagship subsidiary is Hana Bank, the third largest bank by asset value in South Korea.

As part of the conversion to a holding company, Hana Bank (formerly KSE: 002860) was delisted from the Korea Stock Exchange on November 28, 2005 and relisted as Hana Financial Group Inc. on December 12, 2005.

Hana Financial has a total of 10 subsidiaries. Apart from Hana Bank, other subsidiaries include Daehan Investment & Securities Co.

Hana Financial Group is the 3rd largest commercial banking group in South Korea (after Kookmin Bank and Woori Bank) and was established in 1971. The bank reached its current size by four mergers since 1998; the two largest are with Boram Bank in 1999 and with Seoul Bank in 2002. The largest single shareholder at time of listing was U.S. investment bank Goldman Sachs which purchased 9.4% of the new entity in October; the second largest was Singapore's Temasek Holdings with 9.06%.and third largest Germany's leading Insurance corporation Allianz AG with 5.3%. The latter has acquired Hana Bank's 50% stake in their South-Korean asset management joint venture in the third quarter of 2005. A life insurance joint venture between Allianz and Hana is still in place.

Compared to the other leading domestic bank groups Hana Financial Group has an above-average asset quality. This is among other things a result of its comparatively small credit card business and the Bank's concentration on high net-worth individuals and SME-business. Additionally, the relatively large exposures with SK Corp and LG Card are withdrawn from substandard classification due to the financial recovery of both companies. As a result, the bank was able to improve its non-performing loan ratio to 1.1% and its loan loss cover ratio to more than 110% at end of fiscal year 2004. Hana Bank's profitability improved singnificantly in fiscal year 2004; especially the trading income rose by 172%. Together with the sharp decline in loan loss provisions operating profit more than trippled. Net income got an additional push through the usage of loss carried forward by former Seoul bank, resulting in a tax surplus. In the first three quarters of fiscal year 2005 operating profit rose again (+30.7%) but net income fall 17.8%, mainly as a result of increased tax payments. Capitalisation at Hana Financial Group is satisfactory and has increased since the 2002 merger, but is still below peer group figures.

Currently there are several acquisitions under discussion, the two most important are the possible takeover of LG Card (second largest domestic credit card issuer) and the purchase of German Commerzbank's participation in Korea Exchange Bank (5th largest banking group in South Korea). Additionally, Hana Financial Group itself could be the target for a takeover by a foreign bank due to its positive development, its strong position in the domestic banking market and its high free float.