📈 하나금융그룹의 밸류업: 함영주 CEO에게 듣다 📈

Company transformation & performance (2015 → 2024)

• 2015 baseline (post-merger integrated bank; CEO start in 2015):
  • Net income: ~₩900B
  • ROE: ~4%
• By 2024:
  • Net income: ~₩3.7T (~4x growth)
  • ROE: >9% (more than doubled)

Management framing: transformation driven by employee dedication + customer/shareholder support, leading to the fastest profitability growth among Korean financial groups.

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“Value Up” as a 3-year corporate value enhancement program

Core priority: move from quantitative growth to qualitative growth, while making Value Up systemized and sustainable (not a one-time/short-term campaign).

Framework / operating principles implied

• Capital efficiency playbook
  • Value Up = shareholder returns + sustainable profitability
  • Success depends on how capital is allocated to create a sustainable profit structure
• Capital adequacy guardrail
  • Returns must be feasible without eroding bank loss-absorbing capacity

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Value Up plan goals & targets (published: October; discussed 4 months in)

Primary shareholder value target

• Increase shareholder return ratio to 50% by 2027
  • Rationale: global bank norms cited at ~50% to nearly 100% (U.S., Japan, Singapore)
  • Korean banks referenced around ~40%, contributing to undervaluation

Method shift for shareholder returns

• Return mechanisms:
  • Cash dividends
  • Share buybacks + cancellation
• Strategy direction:
  • Increase buyback/cancellation proportion (align with global practices)
  • Benefits: supports stock price; reduces shares outstanding → increases per-share value

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Prerequisites & risk/capacity constraints (CET1 + RWA management)

Key dependency: shareholder returns require strong profitability and sufficient capital.

• CET1 ratio definition:
  • CET1 = Common equity capital / Risk-weighted assets (RWA)
• Management levers:
  • Profitability increases common equity capital
  • Payouts reduce equity capital
  • Must also manage RWA efficiently, not just equity
• RWA growth target:
  • Keep RWA growth in line with domestic nominal GDP growth
• Capital target range:
  • Maintain CET1 in 13%–13.5% to expand shareholder returns steadily

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Execution results so far (2024 + recent actions)

Shareholder return execution

• Share buyback + cancellation: ₩400B in 2024
  • Called the largest annual amount in Group history
• Dividend per share (DPS): increased by ₩200
• Shareholder return ratio (2024): 38%
  • Compared with:
    • 27% (2022)
    • 33% (2023)
• Management emphasizes sharp upward trend over 3 years

Operational/capital resilience achievement

• External uncertainty cited: FX rate increase late last year
  • Mechanism: higher FX increases value of foreign-currency assets → RWA rises quickly → CET1 declines
• Management claim: through rigorous group-wide RWA management, Hana maintained CET1 above 13% despite this headwind.

Market outcome

• Stock price performance:
  • Up ~31% from ₩43,400 (end-2023) to ₩56,800 (end-2024)
  • Outperformed the market
• Management view: stock repricing tied to Value Up execution (not just narrative).

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Beyond 2024: shareholder returns plan and timing

Early 2025 buyback/cancellation

• ₩400B share buyback + cancellation announced in early February
  • “Largest since the Group was established”

2025 total shareholder return start point

• Assuming cash dividends remain at 2024 level:
  • Begin the year with >₩1.4T in total shareholder returns

2H execution cadence

• Second half of this year: additional buybacks/cancellations
• Goal: achieve a higher shareholder return ratio than last year
• Positioning: confidence that the firm is on track for 50% by 2027

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Dividend predictability & governance mechanisms (for stability)

Policy

• Fix the total cash dividend amount starting this year at a certain level (to increase predictability)
• Distribute dividends evenly each quarter
• Rationale tied to buybacks:
  • As shares are repurchased/cancelled, shares outstanding ↓
  • DPS tends to rise, supporting stable quarterly cash flow

Expected per-share improvement mechanics

• With fewer shares, EPS and BPS should improve faster (per-share metrics rise more sharply)
• Management notes Hana currently has the smallest number of outstanding shares among major financial groups, so share reduction may compound faster benefits.

Condition for stock metrics

• Management expectation (forward-looking): PBR reaches 1.0 when Value Up accelerates.

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Strategic “must-do” to sustain Value Up: non-banking profitability + ROE target

Most critical factor (management view): capital allocation + sustainable profit structure Ultimate metric: improve Group ROE

Non-banking business strengthening

• Management focus: strengthen non-banking portfolio
• Requirement:
  • Each non-banking subsidiary must build competitiveness
  • Group must maximize synergies through improved collaboration
• Target profit contribution:
  • Non-banking profit contribution to reach ~30%
• ROE outcome target:
  • ROE of 11%–12% for Hana Financial Group considered “entirely realistic” under this plan

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Key metrics & KPIs mentioned (all surfaced in subtitles)

• Net income
  • ~₩900B (2015) → ~₩3.7T (2024)
• ROE
  • ~4% (2015) → >9% (2024)
  • Target: 11%–12% (via non-banking + synergy + profit structure)
• Shareholder return ratio
  • 27% (2022) → 33% (2023) → 38% (2024)
  • Target: 50% by 2027
• Buybacks/cancellations
  • ₩400B (2024) (annual record)
  • ₩400B (announced early February of the following year)
• Dividend
  • +₩200 DPS (for 2024)
  • Policy: fix total cash dividend amount; pay evenly quarterly
• Capital adequacy
  • CET1 target: 13%–13.5%
  • Maintain CET1 above 13% through FX-driven RWA headwinds
• RWA management
  • Target: RWA growth aligned with domestic nominal GDP growth
• Stock performance
  • +31%: ₩43,400 → ₩56,800 (end-2023 to end-2024)
• Valuation expectation
  • PBR expected to recover to 1.0 (management view)

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Concrete examples / actionable moves highlighted

• Largest-in-history annual buyback/cancellation: ₩400B in 2024
• Dividend adjustment: +₩200 DPS and institutionalized quarterly distribution
• Capital resilience example: maintaining CET1 > 13% despite FX-driven RWA growth
• Governance/plan continuity: announce and execute buybacks in early February and plan further actions in 2H

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Presenters / sources

• Bobae Kim (Host)
• Young Joo Ham (CEO, Hana Financial Group)