Hana Financial Group
Encyclopedia
Hana Financial Group is the 4th largest commercial banking group in South Korea.
The company originally began in 1971 as Korea Investment & Finance, the nation’s first financial company established with purely private capital. 'Hana' is Korean for one or unity and its symbol is "ㅎ" the first consonant in 'Hana'.
Hana Bank, Hana Financial Group’s primary banking subsidiary, was converted as a commercial bank in 1991. The subsequent years were characterized by remarkable growth, driven by successful transformational M&As and operational excellence. Hana Bank went through P&A with Chungchong Bank and M&A with Boram Bank in 1998 and acquired Seoul Bank in 2002. In May 2005, it acquired Daehan Investment and Securities, Korea’s second largest asset management company.
Hana Bank is one of the nation’s leading lenders and has been recognized as the best bank in Korea by the international financial press including Euromoney.
Hana Bank made another leap to offer convenient one stop services to its customers by establishing Hana Financial Group in December 2005. Through the financial group structure, Hana Financial Group has realigned the distribution channel, upgraded customer relationship management system as well as product development systems and capabilities.
Hana Financial Group is in charge of forming group-level business strategies and providing management resources to subsidiaries, including Hana Bank, Hana Daetoo Securities, Hana SK Card, Hana HSBC Life Insurance, Hana Capital, Hana Daol Trust, Daol Fund Management, Hana I&S, Hana Institute of Finance, and overseas units Hana Bank (China) and PT Bank Hana.
The integration of the Korea Exchange Bank (KEB) into the Hana Financial Group, slated for this year, will reshape the Korean financial Industry landscape. The acquisition will bolster the Group’s position as Korea’s third largest financial institution and equip it with vast domestic distribution channels that are second only to KB. KEB will add its expertise in corporate and global banking as well as its extensive global network to the Group’s overseas network.
Hana Bank established a program called the Hana Overseas Club in 1994 as a means to provide financial services to Korean expatriates living abroad, including those living in Canada, Australia,New Zealand and the United States etc. Through the Hana Overseas Club, Hana Bank managed the Korean financial assets of its overseas customers. Upon written or verbal request, Hana Bank would convert funds to U.S. dollar currency and remit the funds via wire transfer to the overseas customer. Hana Bank launched an advertising campaign for the Hana Overseas Club in July of 1994. As part of this campaign, Hana Bank ran advertisements in the Korea Times in Los Angeles, New York and other major cities.
To date, the Group’s strategies for global expansion have been focused on East Asia, China in particular. As early as 2007, the Hana Financial Group established a subsidiary in China, Hana Bank China, which now has 13 branches in the world’s most populous market. In 2009, Hana Bank China was licensed to perform transactions involving China’s currency, the Remnimbi, as well as debit card transactions. A year later, the Hana Financial Group acquired an 18% stake in the Bank of Jilin Co. Ltd, solidifying its growing network of retail bank outlets in the region. The largest single investment in the Group’s history, this strategic partnership will give the Hana Financial Group access to the branch network of China’s second largest bank. In January, 2011, the Group entered into a strategic alliance with the China Merchants Bank, which not only has the largest potential for growth in China, but also a competitive credit card and retail banking business in local markets.
The Group has a presence in Indonesia, another area of strategic importance in its global expansion. The Group operates 17 branches through PT Bank Hana, a local subsidiary in Indonesia set up by the Hana Financial Group in 2007. In its embrace of these markets, the Hana Financial Group is taking the concept of ‘glocalization’ as its basic strategy for expansionary growth. A combination of globalization and localization, ‘glocalization’ embodies the Group’s basic principles of openness and diversity. Indeed, the Group hires most of the employees for its overseas operations from local communities. For instance, of the 255 employees at the Group’s Indonesian subsidiary, 98% are Indonesians, including three of the five members of the Board of Directors. Such a prudent approach in local markets has proven highly effective, as PT Bank Hana is already turning a profit after only two years in operation.
The acquisition of KEB will further strengthen the Hana Financial Group’s overseas network. Previously clustered around East and Southeast Asia, this network will now stretch out around the globe, expanding from 10 branches in nine countries to 37 in 22 countries around the world.
Although the substandard & below ratio, the substandard & below coverage ratio and the delinquency ratio all rose slightly compared to the previous year, this was due to amortization and disposition, which were at half the levels of 2009. Taking amortization and disposition into account, the substandard & below ratio and delinquency ratio dropped by 0.48%p and 0.61%p, respectively, and are barometers of effective risk management in proportion to the growing volume of our operating assets.
Hana Financial Group’s capital ratio was maintained at an adequate level with a BIS ratio of 12.38% and a Tier-1 ratio of 9.15%. Subsidiaries also maintained the quality of their assets, which was well above the ratios required by regulation.
The company originally began in 1971 as Korea Investment & Finance, the nation’s first financial company established with purely private capital. 'Hana' is Korean for one or unity and its symbol is "ㅎ" the first consonant in 'Hana'.
Hana Bank, Hana Financial Group’s primary banking subsidiary, was converted as a commercial bank in 1991. The subsequent years were characterized by remarkable growth, driven by successful transformational M&As and operational excellence. Hana Bank went through P&A with Chungchong Bank and M&A with Boram Bank in 1998 and acquired Seoul Bank in 2002. In May 2005, it acquired Daehan Investment and Securities, Korea’s second largest asset management company.
Hana Bank is one of the nation’s leading lenders and has been recognized as the best bank in Korea by the international financial press including Euromoney.
Hana Bank made another leap to offer convenient one stop services to its customers by establishing Hana Financial Group in December 2005. Through the financial group structure, Hana Financial Group has realigned the distribution channel, upgraded customer relationship management system as well as product development systems and capabilities.
Hana Financial Group is in charge of forming group-level business strategies and providing management resources to subsidiaries, including Hana Bank, Hana Daetoo Securities, Hana SK Card, Hana HSBC Life Insurance, Hana Capital, Hana Daol Trust, Daol Fund Management, Hana I&S, Hana Institute of Finance, and overseas units Hana Bank (China) and PT Bank Hana.
The integration of the Korea Exchange Bank (KEB) into the Hana Financial Group, slated for this year, will reshape the Korean financial Industry landscape. The acquisition will bolster the Group’s position as Korea’s third largest financial institution and equip it with vast domestic distribution channels that are second only to KB. KEB will add its expertise in corporate and global banking as well as its extensive global network to the Group’s overseas network.
Corporate Timeline
- In 1990 - No. 1 Underwriter of Corporate Bond
- In 1991 converted to a commercial bank with a nationwide branch Network
- Launched Credit Card Business in 1992
- Korea’s Best Bank Award” by Euro-money in 1993
- Acquisition of Chungchong Bank in 1999
- Merger with Seoul Bank in 2002, becoming Korea’s 3rd largest bank
- Launched Hana Life Insurance in 2003
- Establishment of Financial Holding Company in Dec. 2005 (Chairman & CEO: Seung-Yu Kim)
- Acquisition of Hana Daetoo Securities in May 2005
- Launched PT Bank Hana (Indonesia) in Dec.2007
- Established UBS Asset Management in May 2007
- Established Hana HSBC Life Insurance in Mar 2008
- Reorganized HFG to Matrix Structure in Mar.2008
- Merged Hana Daetoo Securities &Hana IB Securities in Dec. 2008
- Established Hana Credit Card JV with SK Telecom in Dec. 2009 http://www.sktelecom.com
- Acquisition of Daol Trust in Mar. 2010
- Acquisition of 18.27% share of Bank of Jilin in May 2010
- Signed SPA with Lone Starfor KEB share acquisition in Nov 2010
- Signed on MOU with China Merchants Bank in Jan 2011
Overseas Network
In early 1990, the group had planned to acquire a 25% equity stake in the California Center Bank (CCB).Hana Bank established a program called the Hana Overseas Club in 1994 as a means to provide financial services to Korean expatriates living abroad, including those living in Canada, Australia,New Zealand and the United States etc. Through the Hana Overseas Club, Hana Bank managed the Korean financial assets of its overseas customers. Upon written or verbal request, Hana Bank would convert funds to U.S. dollar currency and remit the funds via wire transfer to the overseas customer. Hana Bank launched an advertising campaign for the Hana Overseas Club in July of 1994. As part of this campaign, Hana Bank ran advertisements in the Korea Times in Los Angeles, New York and other major cities.
To date, the Group’s strategies for global expansion have been focused on East Asia, China in particular. As early as 2007, the Hana Financial Group established a subsidiary in China, Hana Bank China, which now has 13 branches in the world’s most populous market. In 2009, Hana Bank China was licensed to perform transactions involving China’s currency, the Remnimbi, as well as debit card transactions. A year later, the Hana Financial Group acquired an 18% stake in the Bank of Jilin Co. Ltd, solidifying its growing network of retail bank outlets in the region. The largest single investment in the Group’s history, this strategic partnership will give the Hana Financial Group access to the branch network of China’s second largest bank. In January, 2011, the Group entered into a strategic alliance with the China Merchants Bank, which not only has the largest potential for growth in China, but also a competitive credit card and retail banking business in local markets.
The Group has a presence in Indonesia, another area of strategic importance in its global expansion. The Group operates 17 branches through PT Bank Hana, a local subsidiary in Indonesia set up by the Hana Financial Group in 2007. In its embrace of these markets, the Hana Financial Group is taking the concept of ‘glocalization’ as its basic strategy for expansionary growth. A combination of globalization and localization, ‘glocalization’ embodies the Group’s basic principles of openness and diversity. Indeed, the Group hires most of the employees for its overseas operations from local communities. For instance, of the 255 employees at the Group’s Indonesian subsidiary, 98% are Indonesians, including three of the five members of the Board of Directors. Such a prudent approach in local markets has proven highly effective, as PT Bank Hana is already turning a profit after only two years in operation.
The acquisition of KEB will further strengthen the Hana Financial Group’s overseas network. Previously clustered around East and Southeast Asia, this network will now stretch out around the globe, expanding from 10 branches in nine countries to 37 in 22 countries around the world.
Financial Results
In terms of the volume of business conducted, which demonstrated a minor decline or stagnation in 2009, HFG saw a rebound in both qualitative and quantitative growth. Total assets, which fell 2.94% in 2009, increased by a robust 15.54%, owing to the growth in operational assets including interest-earning assets and a decrease in non-interest-earning assets such as derivative products. Total sales improved 2.16% as the significant growth in total deposits offset a minor decrease in AUM for beneficiary certificates. The number of credit card members also increased 10.87% in 2010, a greater increase over the 7.31% of 2009, to reach a total of 4.15 million members, as the credit card BU continued to consolidate its platform since its spin-off at the end of 2009.Although the substandard & below ratio, the substandard & below coverage ratio and the delinquency ratio all rose slightly compared to the previous year, this was due to amortization and disposition, which were at half the levels of 2009. Taking amortization and disposition into account, the substandard & below ratio and delinquency ratio dropped by 0.48%p and 0.61%p, respectively, and are barometers of effective risk management in proportion to the growing volume of our operating assets.
Hana Financial Group’s capital ratio was maintained at an adequate level with a BIS ratio of 12.38% and a Tier-1 ratio of 9.15%. Subsidiaries also maintained the quality of their assets, which was well above the ratios required by regulation.
Family Companies
- Hana Bank
- Hana Daetoo Securities (formerly Daehan Investment & Securities)(merged Hana IB Securities in 2008)
- Hana SK Card
- Hana HSBC Life Insurance (formerly Hana Life Insurance)
- Hana Capital
- Hana Daol Trust
- Daol Fund Management
- Hana I&S
- Hana Institute of Finance
- Overseas Units: Hana Bank (China),PT Bank Hana (Indonesia),Hana Asia Limited (Hong Kong)
Former companies
- Hana IB Securities (formerly Hana Securities in 1999~2007 and HFG IB Securities in July 1st~July18th 2007)(merged into Hana Daetoo Securities in 2008)
- Hana Allianz Investment Trust Management (currently Allianz Global Investors KoreaAllianzSE is a global financial services company headquartered in Munich, Germany. Its core business and focus is insurance. As of 2010, it was the world's 12th-largest financial services group and 23rd-largest company according to a composite measure by Forbes magazine.Its Allianz Global Investors...
) - Qingdao International Bank