Issuer Flash: Hana Securities Co., Ltd.

Report date: 2026-11-02 Event date: 2026-10-23 Event title: Q3 2026 Results

1. Flash Conclusion

Hana Securities' third-quarter result shows how quickly a strong earnings recovery can lose momentum. The market-funded Korean securities company reported net income of KRW10.3bn in Q3, down from KRW169.8bn in Q2, as general operating income fell to KRW228.5bn from KRW464.1bn. The weak quarter does not erase the first-half recovery: nine-month net income was KRW283.4bn, already above the KRW212.0bn recorded for all of 2025. It does, however, weaken confidence that the unusually strong first-half result is a sustainable quarterly run rate.

The reported net operating capital ratio rose to 1,719.6% at September-end from 1,550.6% at June-end, while reported equity increased to KRW7.06tn from KRW6.80tn. Those indicators are supportive of the capital position but do not demonstrate the availability of cash under stress. The same official group databook does not provide a complete standalone funding maturity profile, an explanation of the quarterly income decline, or a detailed reconciliation of the change in equity. Hana Securities remains a group-owned, market-funded securities-company credit whose sensitivity to trading, valuations, collateral and refinancing conditions needs to be assessed separately from the capital strength indicated by the regulatory ratio.

2. Quarterly Earnings and Nine-Month Results

Hana Financial Group's Q3 2026 databook reports the following figures for its Hana Securities subsidiary. The databook's income statement is labelled consolidated; its total-assets measure explicitly includes trust assets. These group-presented subsidiary measures should not be substituted for a full standalone funding and liquidity analysis.

General operating income fell approximately 51% quarter on quarter, while fee income fell approximately 41%. Other income swung from a positive KRW42.2bn to a negative KRW47.0bn. General and administrative expenses declined, but by much less than income; pre-provision profit fell nearly 89% to KRW27.9bn. Provisions also fell sharply, from KRW39.4bn to KRW6.8bn, which limited the effect on operating income. These are comparisons calculated from the official table; they should not be read as evidence that underlying credit risk fell by the same proportion.

Nine-month fee income was KRW676.9bn, more than double the KRW301.8bn shown for the same period of 2025. Nine-month net income was KRW283.4bn, compared with KRW273.1bn already earned in the first half. The arithmetic highlights both sides of the period: the earlier recovery remains visible in the cumulative figures, while almost none of the year's net profit was added during Q3. The databook does not establish whether weaker fees were caused by lower client activity, transaction timing, product mix or other factors. Nor does it provide a component-level explanation for the negative other-income line.

3. Capital, Funding and Credit Read-Through

The reported net operating capital ratio increased by approximately 169 percentage points to 1,719.6%. Its numerator, net operating capital, rose to KRW5.79tn from KRW5.47tn; total risk also rose, to KRW3.47tn from KRW3.37tn. These are encouraging reported measures, but the databook does not supply a full bridge explaining changes in capital or risk. The ratio and its inputs use the stated regulatory methodology and should not be equated with cash available to meet margin calls or maturing debt.

Reported assets, including trust assets, were KRW96.48tn at September-end, down from KRW97.79tn at June-end, while the databook's equity figure increased from KRW6.80tn to KRW7.06tn. The movement in equity is materially larger than Q3 net income; the source does not identify the components of that change, so attributing it to retained earnings would be unwarranted. Assets including trust assets also cannot be compared directly with the accounting balance-sheet total in an audited consolidated statement.

Relative to the August flash, the key change is the erosion of the quarterly earnings cushion. Q2's stronger fee income and KRW243.0bn of pre-provision profit had offered more room to absorb provisions or valuation pressure. In Q3, pre-provision profit was only KRW27.9bn. A further adverse valuation move or credit loss of comparable scale could consume a meaningful share of quarterly earnings, although one weak quarter does not establish a persistent loss or a breach of any regulatory or contractual threshold.

The September additional discussion raised the possibility that credit losses, market marks and tighter wholesale funding might coincide. The databook confirms weaker Q3 earnings and an increase in reported regulatory capital metrics, but it does not verify the discussion's proposed loss ranges or establish the current stock of PF guarantees, liquidity gap or margin-call exposure. The discussion's scenarios remain monitoring hypotheses rather than rating-agency triggers. More detailed company financial statements and original rating materials are needed before drawing a conclusion on those exposure channels.

For bondholders, Hana Financial Group ownership and the securities platform's role in the group remain relevant support considerations. Neither the databook nor this event establishes committed emergency liquidity or an explicit parent or Hana Bank guarantee for a particular security. As in the existing issuer summary, seniority, guarantees, cross-default provisions and other terms must be checked in each instrument's documentation. The Q3 result supports a more cautious assessment of earnings durability, while the positive reported capital ratio does not, by itself, resolve refinancing or collateral risk.

4. What To Watch Next

• Track whether fee income and pre-provision earnings recover in Q4, and obtain management's explanation for the decline and the negative other-income line.
• Obtain a detailed current balance sheet and maturity profile for repos, commercial paper, short-term bonds, collateral, foreign-currency funding and liquid assets; compare changes in liquidity with any evidence of increased haircuts or shorter funding tenors.
• Check PF and bridge-loan exposures, guarantees, commitments, impairment and provision coverage in the next detailed disclosure. A lower quarterly provision charge alone is not evidence that those risks have receded.
• Reconcile changes in equity, net operating capital and total risk to source disclosures; monitor the ratio under the applicable regulatory methodology rather than treating it as a liquidity ratio.
• Verify original rating-agency commentary and the actual terms of the relevant Hana Securities bonds. Maintain HFG support expectations separately from contractual guarantees.

5. Sources

• Hana Financial Group, 3Q26 HFG IR Databook, Hana Securities worksheet, published 2026-10-23. Used for the Q3, nine-month, balance-sheet and regulatory-capital comparisons. https://www.hanafn.com:8002/download/10080694/crossDownload.do
• Hana Financial Group, IR Events & Presentations, 2026 Q3 entry. Used to confirm the official disclosure date. https://www.hanafn.com/en/ir/info/presentationsList.do
• Hana Securities, Issuer Summary, 2026-05-16, and 1H 2026 Business Results Flash, 2026-08-03. Used for the existing credit view and scope cautions. issuer_summary/issuers/hana_securities/current/hana_securities_issuer_summary_20260516.md; issuer_summary/issuers/hana_securities/current/hana_securities_issuer_flash_1h2026_results_20260803.md.
• Hana Securities, SSC Credit-Risk Monitoring Discussion, 2026-09-17. Used only to identify directly relevant questions for verification against the official databook; its scenario ranges are not adopted as facts. issuer_summary/issuers/hana_securities/current/hana_securities_additional_discussion_ssc_discussion_20260917.md.