By Kim Jae-won
Staff Reporter
Hana Bank went through a tough time last year. The lender marked 305 billion won in net loss in the first quarter of 2009 due to loan losses associated with troubled exporters, including Taesan LCD, which went bankrupt on the weakening Korean won.
However, entering the second half of the year, the lender rebounded at a fast pace due to its cost reduction efforts. It recorded a net profit of 273.9 billion won in 2009. It was down 42 percent from the previous year but a sharp turnaround from the first half's poor performance.
Now, the lender hopes to keep up the pace in 2010. Hana aims to join the club of 1 trillion won net income banks this year, with the ambitious vision of becoming a global bank through strategic M&A.
The bank's net interest margin (NIM), a lender's barometer of profitability, has increased for eight consecutive months since April 2009 when it fell to 1.38 percent. The NIM jumped by 87 basis points to 2.25 percent in December, the fastest rebound among local lenders.
The bank has also reduced its non-performing loan (NPL) ratio. NPLs are loans in default or close to being in default. It was at 1.72 percent in June 2009, but marked just 1.05 percent at the end of the year, lowering 67 basis points for the six months.
Hana hopes to keep this trend based on strong profitability.
"We set annual asset growth targets of six to seven percent. We will focus on profitability to achieve it," the lender said in a business report recently.
It will increase low cost funding gradually, while avoiding excessive financing competition, the lender added.
Meanwhile, Hana Financial Group, holding company of the lender, is waiting for a good chance to increase its size with a timely M&A. The government plans to privatize Woori Financial Group this year, while Texas-based hedge fund Lone Star also may sell its controlling stake in Korea Exchange Bank sometime in 2010.
"We will play an active M&A role during the course of the industry's reshaping," said Kim Seung-yu, chairman of the group, at a press conference, held at a resort in Yangpyeong, Gyeonggi Province in November 2009.
Hana has been aggressive in trying to enter global markets as a long-term growth engine. It's focusing on East Asia first, and hopes to expand its boundaries to the whole Asian region.
Hana hopes to join the top 50 lenders in the world in assets by expanding its presence in emerging markets. So far, it has two local subsidiaries ― one in China and the other in Indonesia. It also has branches in five countries ― the United States, Japan, Hong Kong, Singapore and Vietnam.
Among them, Hana's main focus is China. Hana Bank China saw its total assets soar by 50 percent to $1.85 billion at the end of 2008 from a year ago, the biggest in the nation among local lenders, with total loans valued at $1.32 billion.
In particular, its deposits reached $869 million, up 662 percent from $114 million a year earlier. It posted a net profit of $11.3 million in 2008.