BUSINESS REVIEW
Select Business Area

Pension & Trust

By offering distinctive products and services in a proactive response to market changes and unique customer experiences made possible by advanced digital innovations, we will strengthen our market leadership and protect customer assets.

RETIREMENT PENSION
  • The retirement pension market grew 14.1% YoY in 2021 to KRW 292.0 trillion. Hana Bank’s retirement pension contributions amounted to KRW 22.8 trillion at the year-end, a YoY increase of KRW 3.9 trillion or 20.3%. To review contributions by type, IRP, defined benefit (DB), and defined contribution (DC) grew KRW 1.5 trillion, KRW 1.4 trillion, and KRW 1.0 trillion, respectively.

    Hana Bank created the Asset Management Division in 2021 and facilitated organic collaborations among relevant organizations for growth of the retirement pension sector. As a result, Hana Bank ranked No. 1 in the banking industry in terms of net increase in contributions. In addition, it became the first in the banking industry to add an exchange-traded fund (ETF) to its retirement pension product line-up, and as part of the effort to improve the earnings of retirement pension funds, built systems for managing the earnings performance of retirement pension funds, thus strengthening its asset and risk management.

    By supplying distinctive new products in collaboration with its affiliates and outside organizations, the Bank also became an industry No. 1 in both IRP and DB, and a No. 2 in DC, in terms of yield. In the Hana 1Q app, it created a retirement pension page, including a two-way channel for a non-face-to-face consultation with pension planners, thus enhancing the non-face-toface channel competitiveness of its retirement pension products and services. Furthermore, Hana Bank provided hyper-personalized, customer-tailored services, including a text alert on monthly management status reports.

    The retirement pension market for 2022 is forecast to grow by KRW 335.0 trillion. Market growth will likely be driven primarily by DC and IRP rather than DB. Owing to a volatile interest rate environment and a growing popularity among individual investors of direct investment trends, the level of interest in retirement pension earnings is expected to be higher than ever. Many regulatory changes are in the pipeline in place to retirement pension systems, such as amendments, and ordinances thereof, to the Act on the Guarantee of Employees’ Retirement Benefits.

    Amendments-induced changes and requirements that will substantially affect the retirement pension market include changing the weight of corporates’ retirement benefit funds managed by third-party pension managers from 90% to 100%; DB plan-selected companies of over 300 full-time workers are required to form a contribution management committee and to publish a regular investment policy statement (IPS); implementing an SME funding system organized by the Korea Workers’ Compensation & Welfare Service; adopting the DC/IRP default option; and the mandatory transfer of retirement IRP.

    By proactively responding to the changes, Hana Bank will turn them into a growth opportunity.By strengthening the product supply line-up with affiliates and other financial companies, it will offer competitive retirement pension products and develop high-margin products based on our diversified base assets. To this end, the Bank will develop diverse products to the varying characteristics of the three plans and thus implement product strategies that accommodate a greater diversity of needs. It will also do its best to improve customer service.

    By building a multi-dimensional service system covering the digital channel, branches, professional consultants, customer management centers through the customer management omni-channel, the Bank will offer a pension asset management service comprising a quick non-face-to-face pension asset assessment and a visit by professional consultants. In addition, by identifying customer needs and offering optimal solutions based on customer-tailored management, it will establish a service system that enables easy pension investments and a continuous management of pension earnings. Furthermore, Hana Bank will improve mobile customer journeys as a way to simplify digital subscription, product operation, and management processes, and it will build a mobile earnings management system in order to offer convenient and efficient digital services.


TRUST
  • MAKING TRUST BUSINESS COMPETITIVE AND SUSTAINABLE Hana Bank sought to strengthen its trust business by diversifying the structure of ELT, its flagship product, and increasing the supply of such fixed-income products that would meet diverse customer financial situations as alternative investment, high grade fixed income product, and foreign currency-based products. In line with digitalization trends, the Bank adopted a virtual consultation system for trust customers. In response to the aging population of Korea as well as for generating synergies through integrated marketing of inheritance and bestowal products and services to increase AUM and strengthen the services, and to lay the foundation for expanding affordable living trust products.

    As a result, trust sales increased KRW 3.7 trillion YoY to KRW 74.2 trillion, the second largest in terms of market share, resulting in KRW 179.2 billion in trust commissions, a YoY increase of KRW 31.8 billion. Hana Bank diversified the structure of its flagship trust product into one that is stable and profitable, which also resulted in the second largest share of the market by annual cumulative sales. The Bank substantially raised the market share of the trust-type ISA product, which offers increased tax benefits, to No. 1 by number of accounts (314,000 accounts) and No. 2 by total trust sales (KRW 2.1 trillion).

    Hana Bank’s plans for 2022 are to diversify key products, adopt distinctive specialized products, and strengthen digital trust. It will continually increase the supply of ELT which has been improved in stability and profitability over the years, develop ETF trust products high in versatility, increase the supply of high-grade fixed-income products that are selected in line with interest rate hikes, take other measures to diversify key base trust income. In addition, through monitoring latest trends and regulations, the Bank will adopt distinctive specialized products and thus meet various customer’s needs; and expand non-face-to-face trust products, improve the trade process, and thus build a customer-oriented trade environment. At the same time, improvements will be made to the IT infrastructure as part of efforts to prepare for competition with Internet-only banks and big tech companies. Hana Bank will also expand product base of affordable living trust by promoting the “100 Years Management-Care” product. By doing so, the Bank will contribute to expanding the social safety net and enhancing the Group’s social value through trust business.

    INCREASING MARKET POWER BY STRENGTHENING CUSTODIAN BUSINESS In custodian business, Hana Bank recorded KRW 167.0 trillion in AUM in 2021, a YoY increase of KRW 12.0 trillion. In particular, the Bank was re-selected by Korea Venture Investment Corp. and Government Employees Pension Service to manage their funds, a coveted honor reserved for top fund managers. The two government-run agencies each have around KRW 8.8 trillion and KRW 4.8 trillion in assets, respectively. The reselection not only confirms the Bank’s expertise and excellence in providing distinctive services, but also will serve as a strong foundation for the Bank to become the nation’s premier fund manager.

    To actively attract the assets of investment associations, Hana Bank completed development of a system that connects to the Korea Securities Depository’s Venturenet system. Running a system through Venturenet substantially not only improves the overall operation efficiencies compared to those in the previous system most of which are done manually, but also lessens the conventionally high risk burden of fund managers. Furthermore, quick and accurate instructions can be made in asset management, while safer, more efficient work executions are possible in the asset management in custody. Taking full advantage, the Bank will actively carry out marketing campaigns targeting investment association assets.

    In 2022, Hana Bank will focus on internal controls and risk management when managing the funds. At the same time, to better respond to sharp changes in the market environment, it will focus on digitalizing fund operations and diversifying investment vehicles for AUM. Due to the 2021 amendments to the Capital Markets Act, asset managers’ operations have been more rigorously monitored and asset audits have further expanded in scope. To comply with the toughened regulations and to roll out new products more effectively, the Bank will reconfigure and digitalize all trust business systems.

    Also, it will add entrusted assets, which have been concentrated in investment trust, to investment associated assets which are invested through the Venturenet system, and thus focus on diversifying asset attractions.