Hana Financial’s 2023 net profit falls on weak non-banking business

[Courtesy of Hana Financial Group]

South Korea’s Hana Financial Group Inc. reported a decline in net profit for 2023 as the non-banking business remained weak due to the spillover of project financing woes.

Hana Financial Group held an investor relations meeting on Wednesday and announced that it posted a net profit of 3.45 trillion won ($2.6 billion) in 2023, down 3.3 percent from 3.57 trillion won in 2022.

Hana Bank, its core subsidiary, continued its strong performance last year, posting a net profit of 3.48 trillion won, up 12.3 percent from the previous year. The lender achieved both its highest-ever net profit and record net profit exceeding the financial group’s net profit for the year.

Behind Hana Bank’s record net profit last year lay in the expansion of total loan assets, implementing a strategy of reducing household loans while bolstering loans to large corporates and small- and medium-sized enterprises (SMEs).

By the end of last year, Hana Bank recorded corporate loans of 25.8 trillion won and SME loans of 132.9 trillion won, up by 31.5 percent and 10.4 percent, respectively, from the end of the previous year.

However, household loans decreased by 0.6 percent from the previous year to 128.4 trillion won by the end of 2023.

Non-bank sectors, in the meantime, performed poorly.

The financial investment business, the group’s second-largest sector after banking, swung to a loss of 270.8 billion won in 2023 from a profit of 298.3 billion won in 2022.

“This is due to extraordinary expense recognition, including losses in the investment bank assets and active reserves,” the group said.