Hana Financial Investment recapitalizes to file for mega investment bank status

2020.02.05 11:57:58 | 2020.02.06 09:35:37

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South Korea’s Hana Financial Investment Co. will be recapitalized by 500 billion won ($422 million) by selling new shares to its parent company Hana Financial Group Inc. to bump up its equity capital to over 4 trillion won and become eligible to join the mega investment category.

Hana Financial Group, the namesake financial conglomerate’s investment holding entity that owns a 100 percent stake in Hana Financial Investment, in a public disclosure on Tuesday said its board approved the purchase of 8.47 million shares in the investment bank unit at 59,000 won a share, worth a total 499.73 billion won. The payment is due on Mar. 26.

Hana Financial Investment on the same day said its equity capital would exceed 4 trillion won by the end of March upon reflecting the proceeds from the new rights issue in the first-quarter financial statement.

This would allow the brokerage unit to apply for a mega-sized investment bank permit that would allow the institution to issue banknotes to a maximum 200 percent of its net worth.

The upscaling comes less than a year after the investment unit became a comprehensive finance and investment company with its capital bumped up over 3 trillion won following the 1.2 trillion won worth rights issue.

The investment company recorded 280.3 billion won in net profit for full 2019, up 84.3 percent from a year earlier. Its operating profit jumped 77.1 percent on year to 349.5 billion won and revenue was up 44.4 percent to 5.55 trillion won last year.

Its holding entity, Hana Financial Group, said in a regulatory filing on Tuesday that it recorded 2.4 trillion won in net profit on a consolidated basis last year, up 7.84 percent from a year earlier. Its operating profit came at 3.3 trillion won, up 3.9 percent on year and revenue totaled 38.7 trillion won, up 18.9 percent on year.

The financial conglomerate generates the bulk of its earnings and revenue from commercial lending unit KEB Hana Bank. It aims to bolster the revenue contribution of its non-banking sector to 30 percent by 2025.

On Wednesday, Hana Financial Group stock closed up 2.7 percent at 34,300 won. Hana Financial Investment is not listed.

By Cho Jeehyun

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