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On track for 1.0x P/B

Maintain Buy and raise TP to W179,000

We raise our target price on Hana Financial Group (HFG) from W145,000 to W179,000, applying a target P/B of 1.0x (up from 0.8x previously) to our 2026F BPS. We lifted our target multiple because we expect financial authorities’ expanded recognition of structural FX risk to sharply reduce CET1 ratio sensitivity to FX movements, allowing HFG to introduce a new shareholder return policy without a formal cap (in line with peers). With our target price implying 45.2% upside, we reiterate our Buy rating.

1Q26 results beat consensus

For 1Q26, HFG reported net profit attributable to owners of the parent of W1.21tr, exceeding both our estimate (W1.11tr) and the consensus (W1.13tr). Net interest income grew sharply (+5.1% QoQ), supported by expansion in group and bank NIMs (+4bps and +6bps QoQ, respectively). Non-interest income was in line with our estimate, supported by solid fee income. Provisions were better than expected, with provision reversals at the bank supporting an improved credit cost ratio (-8bps YoY to 21bps). The CET1 ratio declined 29bps QoQ to 13.09%, reflecting a weaker won and the impact of stricter Basel III regulations, but remained above 13%.

Shareholder return ratio likely to reach 50% in 2026

For 2026, we expect HFG to deliver a shareholder return ratio of 50%, achieving the target set out in its 2024 corporate value enhancement plan ahead of schedule. Looking ahead, we expect the group to announce a new shareholder return policy without a formal upper limit, in line with peers. HFG has already announced W400bn in treasury share buybacks/cancellations for 1H26; factoring in cash dividends, we estimate additional buybacks/cancellations in 2H26 at around W600bn.