Constant growth via M&As

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Constant growth via M&As

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Former national soccer team player Hong Myong-bo and Kim Jung-tae president of of Hana Bank, hand out 100 million won in donations tolower-income families as a Christmas gift last year during the “Dream Football Match” held at the Sangam Soccer Stadium. [JoongAng Ilbo]

When it comes to the world of banking in Korea, Hana Financial Group is one of just a handful of major companies steering the ship.

Established in 1971 as the Korea Investment and Finance Corp., the firm has continued to change in the face of new trends and challenges, growing to become the major financial institution that it is today.

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Kim Seung-yu (66)
Chairman and CEO of Hana Financial Group

  • Bachelor’s in business administration, Korea University
  • Master’s in business administration, University of Southern California Honorary doctorate in business, Korea University


  • Most of its growth since the 1990’s has been fueled by acquisitions. Unlike many other firms that shelve such plans during economic downturns, Hana has continued with that strategy even in difficult times. In 1999, it bought Boram Bank, following that up with the acquisition of Seoul Bank in 2002. The company has been expanding in the global market as well, operating business units in China and Indonesia.

    Observers say Hana’s successful growth strategy could work well in the future, as well.

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    “Hana Financial Group has the potential to expand through mergers and acquisitions, especially since it has been on the road to recovery since the second quarter and is likely to continue in the third and fourth quarters,” said Kim Jae-woo, a senior analyst at Samsung Securities.

    “However, it has to be very cautious since it suffered a deficit in the first quarter.”

    The latest iteration of the company came in late 2005, when the firm - at the time called Hana Bank - launched Hana Financial Group to run all of its businesses as a holding company. It is now one of the leading banking conglomerates in the country along with KB Financial Group, Shinhan Financial Group and Woori Financial Group.

    One of the characteristics that distinguishes Hana from its competitors is the company’s non-financial contribution to society. The firm has been working aggressively on green growth activities in recent years and provides micro-credit loans and other types of financial aid to lower-income families. Additionally, it also works to establish welfare facilities for senior citizens.

    At the center of it all is chairman Kim Seung-yu.

    Kim is a veteran in the financial industry who started out as a lower-level bank employee and worked his way up the corporate ladder. He took his first job at a bank in 1965 and eventually joined Korea Investment and Finance Corp. in 1971 after finishing his master’s degree in the United States. Kim served as president of Hana Bank for a dozen years before becoming chairman of the holding company created several years ago.

    Kim was instrumental in helping Hana become one of Korea’s top banking groups, fueling growth through mergers and acquisitions including those of Boram and Seoul banks. When Kim took on the role as Hana president in 1997, the financial institution’s assets totalled 8 trillion won ($6.54 billion). Today, it has more 100 trillion won in assets.

    It wasn’t always smooth sailing though, and Kim faced his fair share of challenges. In 2003, SK Networks was mixed up in accounting fraud. As its main creditor, Hana could have taken a huge financial hit. But Kim helped SK Networks restructure its finances and minimized damage resulting from the fraud. At the end of the year, Hana Bank recorded a net profit of 500 billion won.

    All of his hard work was recognized this year, when Kim received an international business leadership award from the Asia Society. The only other Korean to receive an award from the group - which works to promote Asia in the United States - is Ban Ki-moon, who is secretary-general of the United Nations.

    Kim is known for his flexibility and tenacity and for never backing down in the face of adversity. He is now strongly pushing several projects aimed at giving back to society, such as micro-credit loans and welfare centers.

    Like the company’s chairman, Hana Chief Execuitve Officer Kim Jong-yeol is a self-made executive who has been with the firm since 1978.

    He, too, played a major role in helping build the Hana empire through the acquisition of Boram and Seoul banks. The CEO is known as the strategic brain behind the operation, espousing a management philosophy of innovation and continuous change. He encourages competition and puts emphasis on performance, hoping to foster an environment where employees can come up with creative ideas rapidly.

    Such motivational tools were behind Hana’s move to tailor its products to individual customers. CEO Kim, who majored in Chinese language and literature, helped Hana expand in China as well.

    Kim Jung-tae, the head of Hana Bank, is a strong believer in honesty and transparency. He emphasizes that earnings generated without the trust of the market are worthless and undesirable. He follows Hana Bank’s tradition of building up bad debt allowances during economic downturns even if it leads to near-term deficits.

    The executive is widely regarded as an expert in sales who, like other Hana leaders, worked his way up from his initial job as a regular banker. From 2006 to 2008 he headed the company’s investment securities affiliate, Hana Daetoo Securities. When he was first appointed to run the brokerage, the market was skeptical. But Kim met with more than 2,000 potential clients in his first 20 days on the job and visited the brokerage’s branches across the country. His aggressive sales strategy worked, quickly improving the unit’s performance. In just a year, the brokerage division’s total assets rose from 24.8 trillion won to 31.2 trillion won. Kim Jung-tae’s sales philosophy involves creating products that are exclusive to Hana Bank, rather than those based on current trends.

    Kim Ji-wan, the current chief executive of Hana Daetoo Securities, is an expert in the field and has been working in it since 1977. His management philosophy revolves around sales and performance, and he is known for being assertive. That’s true in his private life, too, as you’ll often find him climbing Mount Bukhan or Mount Dobong for two days straight without any sleep.

    His aggressiveness can be seen in his performance. Even though Hana Financial Group lost 325 billion won in the first three months of the year, the brokerage unit he heads enjoyed earnings of 54.2 billion won.

    One of the newest pieces to the Hana puzzle is its life insurance unit, which celebrated its first anniversary in March. The unit was jointly established with HSBC Insurance.

    Yoon In-sub, chief executive of Hana HSBC Life Insurance, is a well known figure in the insurance industry in Korea. He became the youngest president of an insurance company in 1995 when he was appointed to head ING Life Insurance at the age of 37.

    Kim Jong-jun was appointed as CEO of Hana Capital in January this year. Kim, who joined the company in 1980, looks to implement new ideas and find niche markets.

    Cho Bong-han, chief executive of Hana I&S, is one of the youngest members of the group’s executive team. An expert in artificial intelligence, Cho was at the center of attention when he became the vice president of Hana Bank at the age of 39. It was a shock to the industry, as Cho was not an expert in the banking industry but an engineering major who created an fighter jet program for the U.S. military. His current objective is to create a financial system that will connect all Hana branches with ATM machines as well as mobile services and customer centers.

    Kim Young-ick, the head of Hana Institute of Finance, is a security expert. His career began at Daishin Securities, and he later headed the investment strategy department of the Daishin Economic Research Institute until 2005. Kim’s precise prediction of a sharp drop in the stock market in 2000 and again a few days before the Sept. 11, 2001, terrorist attacks astonished market followers.


    By Lee Ho-jeong [ojlee82@joongang.co.kr]
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