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Retail Banking

We offer distinctive banking services throughout the customer lifecycle from a customer perspective, online and offline, strengthen long-term customer trust, and thus continue to build growth momentum.

DAILY BANKING
  • EXPANDING THE CUSTOMER BASE In 2021, Hana Bank continued to improve its customer base from both quantitative and qualitative perspectives in the face of a pandemic-induced decline in branch customers, an enforcement of Financial Consumer Protection Act, and other challenging developments. While highlighting the benefits of digital finance through marketing campaigns, we sought to improve the qualitative aspect of the customer base by focusing on customers generating over KRW 10 million in sales. As a result, the number of customers grew 373,000 or 1.7% YoY to 21.73 million, the largest increase of customers among major commercial banks in Korea. In particular, we outpaced peers in ttracting customers with over KRW 10 million in sales, a major industry indicator of qualitative growth.

    With the accelerating digitalization of finance, customers mainly using digital channels are on the rise. Of Hana Bank’s total retail customers, digital channel-only customers accounted for 12.8% at the end of 2021. The Bank is therefore proactively meeting the needs of digital channel customers with mobile-only products and digital-specialized services, continually expanding the base of digital channel customers. It enhanced product competitiveness in 2021 by rolling out “Hana’s Time Deposit”, a mobile-only all-in-one time deposit, and “Timing Installment Savings” with a game-like UI. Hana Bank selected a handful of more viable products out of numerous deposit and savings products in the mobile channel and communicated the benefits of each product to customers and recommended products best suited to their needs. It also established a roadmap for a digital customer management system to assess customer needs and offer optimal solutions on a 1:1 basis.

    In 2022, the Bank plans to build an organic customer management system that enables scenario-based automatic executions and to apply it to all customers and all channel types. For the core customer segment, it will engage in customer management that adds a human touch to both online and offline channels, thereby offering a distinctive customer experience.

    QUALITY ASSET-BASED HOUSEHOLD LOAN GROWTH Household loans at the end of 2021 amounted to KRW 130.3 trillion, a YoY increase of KRW 5.0 trillion or 4.0%, on the back of solid growth of quality assets. Interest incomes from household loans grew KRW 212.0 billion YoY to KRW 1,066.0 billion, 113.7% above the target for the year. The number of household loan customers also went up 45,292 over the year to 1,516,362.

    In 2021, Hana Bank focused on bolstering its product lineup, including mobile-only loan products. In April, it launched “Hana 1Q Apartment Loan”, a mortgage product that enables customers to check their loan amounts in three minutes without a branch visit or an account, and sold 1,387 accounts amounting to KRW 217.5 billion in 2021. In July, the Bank became the first in the financial industry to launch an AI-based loan product which uses AI to determine customer loan limits. The new product calculates optimal loan limits for applying customers’ finances, based on its analysis of the Bank’s big data of loan transaction records and patterns. By the end of 2021, 1,857 accounts were sold, amounting to KRW 33.0 billion. In pushing the product, we leaned toward collateralization in the interest of risk management, and as a result, increased the proportion of secured loans to74.5%.

    COVID-19 is expected to persist along with its ripple effects. In response, Hana Bank will devote a great deal of resources to managing risks associated with market interest rates. It will especially focus on increasing secured assets such as Jeonse loan, intermediate ayment loans and other types of secured loans in a bid to improve the asset portfolio and achieve qualitative growth. Furthermore, the Bank will enhance financial consumer convenience by expanding alliances and strengthening collaborations with external platform businesses, and improve the financial accessibility of the underprivileged by applying the non-faceto-face process to a policy finance product, as part of our effort to practice social finance.

    HOUSEHOLD DEPOSITS Hana Bank kept its sales focus on payroll, pension, and other cash-inflow accounts, as well as card payment and other cash-outflow accounts, ending the year at KRW 47.3 trillion in Low Cost Fund (LCF), a YoY increase of KRW 5.3 trillion or 12.5%. Despite a slight decrease in time deposit as of 2021 was KRW 0.5 trillion less than the figure of 2020, the growth rate turned upwards in response to the back-to-back base rate increases in August and November, thus contributing to the stable management of LCR and NSFR.

    Hana Bank also unveiled various deposit products calibrated to customer needs and market trends. With a particular focus on developing products by customer lifecycle phase, ranging from fetus to post-retirement, it followed the successful launch of a senior-only product with an installment savings product for pregnant women in 2021. It also rolled out a travel installment savings product in anticipation of a spike in the demand for foreign travel. Also released are installment savings products connected to the MyData service and a string of mobile-only installment savings and deposit products, all developed with an eye toward creating a distinctive customer experience.

    In 2022, as domestic consumption is expected to recover in tandem with improving COVID-19-induced situations, so are needs to rise for stable household funding in anticipation for a liquidity crunch resulting from a base rate increase. Accordingly, Hana Bank will pursue inclusive finance with a focus on stable household funding and ESG values. To fortify the foundation for stable household funding, it will seek to increase LCF with focus on banking accounts related to payments, wages, and other daily life finance. In addition, the Bank will stay responsive to market developments conducive to stable household funding. It will also work on increasing support for the socially and financially underprivileged. To this end, it will launch products that help youths build assets in collaboration with government organizations, including the Ministry of Health and Welfare, while advancing policy finance products that support the socially underprivileged as part of its social contribution through finance.


PRIVATE BANKING
  • STRONG, STABLE GROWTH IN 2021 Befitting to its reputation as the pioneer of private banking (PB) in Korea, Hana Bank garnered, again in 2021, all four of the most coveted global PB awards from world-renowned financial magazines. It also succeeded for the first time in receiving the 2021 National Service Awards hosted by the Institute for Industrial Policy Studies (IPS). Recognized for its asset management and lifecycle products and services for VIP customers in particular, the Bank further solidified its reputation as an undisputed leader of asset management.

    As a leader of private banking, Hana Bank continued its stable growth in the PB sector. In particular, the Bank leveraged its digital capabilities to stay focused on strengthening non-face-to-face services for high-net-worth individuals in response to a pandemic-induced sharp drop in branch customers. It became the first in Korea to roll out a video consultation service operated by various financial experts and received positive customer feedback for its secure yet convenient services. The monthly Gold Club magazine for high-net-worth individuals was fully digitalized into “Hana 1Q M”, a webzine, resulting in a substantial improvement in customer convenience. In addition, “Digital PB Organization” was launched as a headquarter-led direct marketing medium targeting mobile channel customers. Insightful content is developed and promptly uploaded onto the Hana 1Q platform. By connecting with the MyData service, we will provide hyper-personalized asset management solutions based on the financial transaction patterns of each customer.

    As of the end of 2021, Hana Bank is operating 44 branches in collaboration with Hana Financial Investment as a way to proactively respond to customers’ increasingly diverse needs for financial products and services. The Bank in 2021 opened two Club1 branches as a space exclusively for ultra-high-net-worth (UHNW) customers, providing professional and exclusive services. At Club1, a team of the Bank’s most seasoned experts provide customers with professional services in PB, tax, legal, real estate, trust, asset management, and other pecialized investment areas. The space is a culmination of finance, culture, and the arts, exuding an ambiance of exclusivity and gaiety. As a result of these efforts, the Bank’s year-end PB asset under management (AUM) reached KRW 62.7 trillion, an increase of KRW 5.6 trillion or 9.8% YoY. Hana Bank will offer asset management services in the direction of responding solely to customer needs and changes, and lead the asset management market providing new, diverse content.

    STRATEGIC DIRECTIONS FOR 2022 Hana Bank will make utmost efforts to increase its high-net-worth customer base by further fostering its asset management strengths in 2022. Detailed plans to achieve this goal include the following – first, it will focus on living trust services providing comprehensive inheritance solutions, and expedite the growth of living trust services by launching various new products in collaboration with large external general agencies (GAs) and by promoting the brand; second, it will form a team of tax, legal and real estate experts and develop alliances with legal and tax firms to strengthen advisory services; third, it will advance digital asset management by building a digital asset management platform connected to the MyData service and by setting up a bank-wide coverage of asset management customer through the Digital WM Sales Division; fourth, it will distinguish VIP services by creating a Hana Art Banking Service offering trust services related to collective purchasing of artworks and buying NFT artworks and art in general, and by strengthening the Club1 brand and services, enhance the image of Hana Bank’s overall asset management services; and lastly, it will strengthen the capabilities and cooperation to provide PB services listed above by focusing on selecting and nurturing talents, by enhancing the overall capabilities of PBs and strengthening PB collaborations between banking and securities operations to continue the reputation of being the unsurpassed leader in asset management.


INVESTMENT FUNDS & BANCASSURANCE
  • INVESTMENT FUNDS The KOSPI index surpassed 3,000 points for the first time in its history at the beginning of 2021, spurred by improving domestic corporate performances led by a global economic recovery, increasing exports, and ample liquidity. KOSDAQ also recovered to 1,000 points for the first time in 20 years, mainly attributable to a recovery of investment sentiment fueled by a rapid rise of COVID-19-related bio stocks. An IPO boom following the listing of many companies diverse in size and business, including such large businesses as Kakao Bank/Pay, SK Bioscience, and Hyundai Heavy Industries, as well as businesses in materials, parts, and equipment industries. The US stock markets continued its robust incline, generating a substantial increase in the number of Korean investors investing in US stocks.

    Hana Bank continued to try new attempts at providing customer-led asset management services in 2021 to capitalize on the increase of individual investments and on fast-growing non-face-to-face transactions. The Bank launched “Pocket Money Fund” through which customers can experience the delight of investment even with a small amount of cash, asset management platform “Fun#” for digital customers in general and digital natives, including Millennials, in particular, and “Marble of Investment”, a game-like investment simulator.

    In addition, fund subscription and management were improved with the addition of such services as quick hashtag search and “Fund Traffic Light”, and new hyper-personalized content, such as Bucket List and DIY Portfolio, was introduced. Also, every quarter, a fund investment theme was selected and recommended that would best reflect market trends. Underperforming products, including those with either diminishing investment appeal or declining sales, were reassessed in terms of their marketability and reduced to below 100 in a bid to increase customers’ fund accessibility as well as to improve front office’s understanding of the product lineup.

    On the strength of these efforts and robust sales of IPO and overseas mutual funds, fund fees grew 13% YoY to KRW 86.9 billion by the end of 2021. In particular, equity fund sales increased by KRW 1.3 trillion YoY. In addition, the Bank developed a market for asset allocation-type ETF managed portfolio (EMP) funds that can generate a stable cash flow, posting annual sales of KRW 200 billion and thus proactively preparing for market volatility. Also, the proportion of non-face-to-face installment funds jumped, posting a record KRW 4.3 trillion in online new sales, more than double the previous year’s figure of KRW 2.1 trillion. The growth of online sales relative to total new sales has been sharply growing from 6% in 2019 to 28% in 2020 to 47% in 2021. The MAU of Fun#, which opened in October, and the number of cumulative users of Marble of Investment reached 180,000 and 360,000, respectively at the end of 2021, contributing to the increased online sales.

    In 2022, Hana Bank will promote fixed income products with low volatility, and will constantly reinforce trend products (satellite) by using a core/satellite strategy, while focusing on long-term investment (core) products. At the same time, the Bank will proactively manage risks by keeping number of marketable funds under 100. It will also capitalize on market trends such as non-face-to-face financial product demands. By carrying out diverse marketing activities with an eye toward increasing Fun # MAUs, the Bank will increase the inflow of digital natives, including Millennials and Gen Z.

    BANCASSURANCE Hana Bank’s bancassurance sales continued growth in 2021, recording KRW 967.7 billion, a YoY increase of KRW 223.3 billion, on first premium basis. The increase is mainly attributable to a long-term income base comprised of sales expansions across the board, the acceleration of a mobile channel-focused digital transformation, and a resultant expansion of the customer base and income. New bancassurance sales in 2021 comprised KRW 29.2 billion from installment products and KRW 938.4 billion from lump-sum products, respectively, down 17.5% and up 32.3% from the previous year, the latter contributing to securing non-interest incomes.

    Despite the increase of aggregated sales, sales income decreased KRW 1.5 billion YoY to KRW 44.9 billion, mainly owing to a reduction in commissions on insurance sales. However, as the 2021 rise in lump-sum product sales would translate into higher deferred commissions in 2022, sales income is expected to grow further going forward. In addition, as sales of installment pension insurance, an important base product in the era of aging population, grew 48.2% from the previous year to KRW 12.7 billion, we expect long-term loyal customers to increase soon.

    The mobile channel generated 54,835 cases of new sales in 2021, an increase of more than 1,200 compared to previous year, driven mainly by a strengthened product lineup and innovative marketing collaboration. In addition, Hana Bank’s mobile bancassurance market share reached 70% (based on no. of cases), bolstering its market dominance. As such, digital channel contribution in total bancassurance sales has grown meaningfully, recording 31%, a YoY increase of 19.5%p.

    Affected by rising interest rates, savings-type insurance will be less appealing relatively to deposit/installment savings products. Also, as domestic and overseas stock markets are expected to struggle, variable insurance and other investment-type insurance products should secure a minimum margin of profitability through a diversified portfolio doubling down on safety.

    To actively reflect such trends in its daily operations and bolster its market leadership, Hana Bank will strengthen products and services of variable and other insurance products and do its best to help customers rebalance their mid/long-term asset portfolios. It will ctively launch various forms of mini insurance and customized products and thus develop new niche markets, and through active collaboration with big tech, startup, and insurance companies, will create new digital bancassurance markets related to health care.