Hana Financial Group, one of South Korea's top five financial groups, is mulling mergers and acquisitions in non-banking sectors in a bid to seize new growth opportunities, its chief said on Thursday.

“We are reviewing M&As in non-banking sectors to explore new growth drivers,” Hana Financial Group Chairman and CEO Ham Young-joo said on the sidelines of this year's CEO Summer Forum hosted by the Federation of Korean Industries (FKI), Korea's top business lobby group.

“While reinforcing our core businesses, we will uncover new businesses through partnerships and M&As."

Hana Financial has been partnering with Korea's information tech giant Naver Corp. and Kakao Corp. to discover new businesses while seeking to set up an exchange platform to trade securities token offerings, Ham added.

He expected that good investment opportunities would spring up “in the fintech sector and Big Tech companies,” despite toughening regulations.

Hana Financial has formed an artificial intelligence council with SK Group for a variety of joint projects in the AI sector. Last year, the financial group launched the AI Startup Lab with SK to provide an accelerator program to AI startups.

The two groups also teamed up to develop a next-generation credit rating model, utilizing their proprietary telecommunications and financial data.


INNOVATOR IN THE KOREAN FINANCIAL INDUSTRY

Hana Financial Group has been on the front line of innovating the financial industry. It enabled 24-hour foreign exchange trading for the first time in the Korean financial market in 2022.

Last month, its flagship retail banking unit Hana Bank became the country’s first commercial lender to offer an inheritance management service — a one-stop service encompassing post-retirement asset management and inheritance.

Hana Financial has been seeking to foster non-banking businesses under the direction of Chairman Ham, who was promoted to his current position in 2022. Ham had also served as the CEO of Hana Bank from 2015 until his inauguration as group CEO.

Since Ham’s appointment to group chair, the group's financial performance has improved, with its cost-to-income ratio (CIR) dropping to 38.7% in 2023 from over 50% in 2022. The lower a bank’s CIR, the more efficiently it operates.

Last year, Hana Financial reported 3.45 trillion won ($2.5 billion) in net profit, a 3.3% dip from the prior year, mainly because massive losses in its brokerage arm’s overseas real estate investments more than offset the flagship banking unit’s record profit of 3.48 trillion won, driven by a surge in non-interest income.