Hana Securities Issuer Summary

Report date: 2026-05-16
Issuer: Hana Securities Co., Ltd.
Ticker: HANFGI
Relevant bond context: Hana Securities senior unsecured, subordinated and short-term market funding, including foreign-currency notes where documentation is available before investment.

1. Business Snapshot and Recent Developments

Hana Securities Co., Ltd. (“Hana Securities”) is a Korean full-service securities company wholly owned by Hana Financial Group Inc. (“HFG”). It should be viewed not as a bank, but as a market-based financial issuer combining investment dealing, brokerage, investment advisory, discretionary investment management and asset management, trust-related services, capital markets activities, corporate finance, and proprietary trading. The starting point for credit analysis should not be to transfer Hana Bank’s deposit-and-loan credit profile, or HFG’s consolidated bank-centric credit profile, directly to Hana Securities. Hana Securities is an important non-bank subsidiary for HFG, but because its debt has not been confirmed to be explicitly guaranteed by HFG or Hana Bank, bondholders need to assess separately parental support expectations, the company’s strategic position within the group, standalone capital and liquidity, and market-funding sensitivity specific to securities companies.

In short, Hana Securities is “a full-service securities company backed by the customer base of a major bank-affiliated financial group, but whose repayment capacity depends on securities markets, short-term funding access, and capital headroom.” According to the 2023 Sustainability Report, the company was established on 18 January 1977 and, as of end-December 2023, was 100% owned by HFG, with 1,798 employees, 55 domestic branches, consolidated total assets of KRW 48.2 trillion, consolidated equity of KRW 5.7 trillion, and client assets of KRW 116.6 trillion. In HFG’s Databook, Hana Securities’ total assets, including trust assets, were KRW 89.8 trillion for full-year 2025, with equity of KRW 6.1 trillion; at end-1Q26, total assets were KRW 94.0 trillion and equity was KRW 6.1 trillion. Accounting total assets differ in scope between the audit reports and the Databook: the audit report shows consolidated total assets of KRW 57.8 trillion at end-2024 and KRW 61.8 trillion at end-June 2025. Therefore, when discussing scale, the Databook basis including trust assets should not be confused with the K-IFRS consolidated financial statement basis.

The most recent credit focus is how to interpret the recovery from the large loss in 2023 to profitability in 2024, 2025, and 1Q26. According to the HFG 1Q26 Databook, Hana Securities’ net income on the HFG disclosure basis was negative KRW 292.4 billion in 2023, KRW 225.1 billion in 2024, KRW 212.0 billion in 2025, and KRW 103.3 billion in 1Q26. Operating income also recovered from negative KRW 366.8 billion in 2023 to KRW 142.0 billion in 2024, KRW 166.5 billion in 2025, and KRW 141.6 billion in 1Q26. Net income in 1Q26 increased 37.1% year on year, and the recovery looks strong when viewed only through that quarter. However, securities companies’ earnings are affected by equity markets, interest rates, credit, foreign exchange, derivatives, investment banking transactions, PF and real estate-related valuations, and proprietary trading gains and losses. To assess the recovery from 2023 as an improvement in credit quality, it is necessary to separate the potential recurrence of the loss drivers, how much of earnings growth came from fees and client-asset-based revenues, and whether capital and liquidity can absorb volatility in market-related gains and losses.

The most important current interpretation is that Hana Securities is not a “weak securities company” but a “major securities company under a large group,” while also “not having as stable a funding base as a bank.” Domestic local ratings are high, and the NCR is far above the regulatory minimum. The NCR shown in the HFG Databook was approximately 1,391% at end-2025 and approximately 1,333% at end-1Q26, far above the regulatory minimum of 100%. However, a high NCR does not mean that market risk and liquidity risk have disappeared for a securities company. For issuers with large repo, CP, short-term bonds, foreign-currency bonds, derivatives, FVTPL assets, guarantees, and commitments, collateral, haircuts, and access to short-term markets can deteriorate before reported earnings weaken. Investors should therefore assess both the support factor that the company is group-owned and well capitalised, and the constraint that it is sensitive to market funding and the liquidity of proprietary-account assets.

The current credit issues can be summarised as follows.

2. Industry Position and Franchise Strength

Hana Securities’ franchise should be assessed less as a standalone independent securities company and more as the securities platform of a financial group spanning HFG’s banking, card, capital, insurance, and asset management functions. The 2023 Sustainability Report states that the company’s pillars are WM, Wholesale, IB, and S&T, and that it handles equities, futures, options, asset management products for retail and general investors, financial products for institutional and corporate clients, corporate finance, M&A, bonds, and listed and OTC derivatives. It is not merely a retail equity broker, nor a pure investment bank, nor a bank subsidiary. Its credit strength comes from the combination of customer access, group referrals, domestic capital market access, equity capital, and short-term market funding.

A second support factor is the scale of its equity capital and its function as a comprehensive financial investment company. The 2023 Sustainability Report describes the company as a major investment bank with more than KRW 5 trillion in equity capital and a balanced portfolio across WM, Wholesale, IB, and S&T. Consolidated equity on the audit report basis was KRW 5.74 trillion at end-2023, KRW 5.99 trillion at end-2024, and KRW 6.05 trillion at end-June 2025. HFG Databook equity was KRW 6.11 trillion at end-2025 and KRW 6.13 trillion at end-1Q26. In Korea’s securities industry, equity capital scale is closely linked to capacity in underwriting, corporate finance, proprietary investment, derivatives, short-term financing business, and client margin lending. Equity capital is therefore not only a loss-absorbing buffer; it is also a business licence for participation in higher-capacity activities.

The franchise constraint is that, even under a leading financial group, securities-company earnings are heavily affected by market conditions. Hana Securities’ Other income, as shown in the HFG Databook, was negative KRW 191.4 billion in 2023, positive KRW 89.5 billion in 2024, negative KRW 144.5 billion in 2025, and positive KRW 27.7 billion in 1Q26, showing substantial volatility. This suggests that the company is not a purely fee-based business; market-related elements such as proprietary-account results, valuation gains and losses, financial product gains and losses, foreign exchange, and derivatives are significant. Hana Securities’ strength is that it has multiple revenue sources, but the constraint is that some of those revenue sources can deteriorate simultaneously under the same market stress.

3. Segment Assessment

For Hana Securities’ segment assessment, because the company’s latest formal segment-by-segment profit data has not been sufficiently obtained in this report, the nature of its revenue sources is organised using the revenue items and operating statistics in the HFG Databook. From a credit perspective, Fee income and client-asset-based revenues contribute to stabilisation, Net interest income supports earnings through securities finance and interest income, and Other income together with S&T and proprietary-account activities creates earnings volatility. IB depends on capital market conditions and deal flow, but it is meaningful because Hana Securities can leverage HFG’s corporate customer base.

Note: FY2026 1Q represents the quarterly or cumulative first-quarter figures shown in the Databook and is not annualised on the same basis as full-year results. Unless otherwise noted, units are shown in the text as KRW billion converted into hundred million won.

IB and corporate finance are a good fit with HFG’s corporate customer base, but profit depends on the deal environment. The company’s debt issuance market handling volume exceeded KRW 3.6 trillion in both 2024 and 2025 and was above KRW 1.0 trillion in 1Q26. On the other hand, IPO performance is volatile, was low in 2025, and was zero in the Databook for 1Q26. In the credit analysis of Korean securities companies, IPOs, real estate PF, acquisition finance, underwriting guarantees, unsold inventory, bridge loans, and equity investments can increase earnings in good periods, but can lead to valuation losses, provisions, and liquidity burdens in weak periods. For Hana Securities as well, investors should monitor deal quality, capital usage, guarantees and commitments, and PF-related risks more than the IB revenue track record itself.

S&T, proprietary-account activities, and financial product-related businesses are important areas that determine the ceiling of the credit profile. According to the audit reports, Hana Securities has large FVTPL assets and FVTPL liabilities. FVTPL assets were KRW 36.4 trillion and FVTPL liabilities were KRW 19.4 trillion at end-2024; at end-June 2025, FVTPL assets were KRW 37.7 trillion and FVTPL liabilities were KRW 21.9 trillion. This indicates that the company is not a simple intermediary, but a securities company involved in financial products, derivatives, repos, proprietary accounts, and product structuring for clients. When markets are normal and liquidity is deep, these businesses create revenue opportunities. But if sharp moves in interest rates, credit spread widening, equity declines, foreign-exchange volatility, higher hedging costs, and wider collateral haircuts overlap, earnings and liquidity can deteriorate at the same time.

The credit conclusion across segments is that Hana Securities has multiple revenue sources, but they are not fully diversified. WM, brokerage, IB, and S&T appear to be different businesses, but when Korean equity markets, interest rates, credit spreads, investor risk appetite, real estate PF, and the short-term funding environment deteriorate, several businesses can come under pressure simultaneously. HFG’s customer base and Hana Securities’ equity capital are supportive, but they do not eliminate securities-company earnings volatility. Investors should focus less on the profit level in a good quarter and more on whether NCR, liquidity, short-term funding, and parental support capacity can be maintained even in weak market conditions.

4. Financial Profile and Analysis

Hana Securities’ financial analysis needs to consider the 2023 loss, the post-2024 recovery, asset growth, NCR headroom, and reliance on short-term funding together. In 2023, on the HFG Databook basis, general operating income was KRW 432.7 billion, G&A expense was KRW 554.1 billion, Provision expense was KRW 245.3 billion, operating loss was KRW 366.8 billion, and net loss was KRW 292.4 billion. In 2024, the company recovered to general operating income of KRW 848.7 billion, operating income of KRW 142.0 billion, and net income of KRW 225.1 billion. It also maintained net income of KRW 212.0 billion in 2025, and 1Q26 was a strong quarterly start with net income of KRW 103.3 billion.

Note: Units in the HFG Databook are KRW billion. NCR is shown as the Net Operating Capital Ratio in the Databook and expressed as a percentage. FY2026 1Q is first-quarter data and should not be compared mechanically with full-year results. Total assets are the Databook figure incl. trust asset, and differ in scope from K-IFRS consolidated total assets in the audit reports.

In terms of earnings quality, the increase in Fee income is positive, but volatility in Other income is large. Other income was positive KRW 89.5 billion in 2024, but negative KRW 144.5 billion in 2025. Nevertheless, net income in 2025 was maintained at KRW 212.0 billion, suggesting that interest income and fee income provided some support. However, to assess positively that the company remained profitable despite negative Other income, the breakdown of that negative result needs to be confirmed, including which of PF and real estate, proprietary accounts, valuation losses, hedging, derivatives, and foreign exchange contributed. This report leaves those details as not yet obtained.

The financial structure on the audit report basis is as follows.

This statement of financial position makes clear that Hana Securities is a securities company with large marketable assets and market-based liabilities. At end-June 2025, it had FVTPL assets of KRW 37.7 trillion, FVTPL liabilities of KRW 21.9 trillion, borrowings of KRW 17.6 trillion, and debentures of KRW 5.6 trillion. Its main funding source is not deposits as in a bank, but a combination of repos, CP, short-term bonds, financial product liabilities, client deposits received, foreign-currency bonds, and subordinated bonds. Equity capital of around KRW 6 trillion is a major support, but the thickness of equity against total liabilities of KRW 55.7 trillion should be assessed in the context of securities-company regulation and liquidity management.

NCR is the most important regulatory indicator in the company’s credit assessment. In the HFG Databook, NCR was 1,269% in 2023, 1,483% in 2024, 1,391% in 2025, and 1,333% in 1Q26; the audit report also explains that the company is required to maintain a ratio above 100% under financial investment business regulations. Looking only at the level, it is sufficiently high. However, NCR measures market risk, credit risk, and operational risk under a specific framework, and does not fully represent liquidity management when short-term markets close. Even with a high NCR, liquidity pressure can rise if repo counterparty haircuts widen, the CP market closes, foreign-currency funding costs increase, client funds flow out, and derivatives collateral postings all occur at the same time.

In terms of credit costs and provisions, Provision expense in the HFG Databook was KRW 245.3 billion in 2023, KRW 87.1 billion in 2024, KRW 21.2 billion in 2025, and KRW 14.7 billion in 1Q26. The fact that it was large in 2023 and declined from 2024 onward suggests that part of the loss drivers may have been credit-related, PF-related, or valuation-loss-related. However, this report has not sufficiently confirmed the detailed loss breakdown for real estate PF, bridge loans, guarantees and commitments, and proprietary-account investments. To interpret the recovery from the 2023 loss as an improvement in credit quality, it is necessary to confirm which risks have declined, whether the recovery was simply a market reversal, or whether losses were merely absorbed by capital.

The overall financial assessment is that Hana Securities has returned to profitability after the 2023 stress, and that its equity capital and NCR are strong, but profitability remains dependent on market conditions, and the balance sheet relies heavily on marketable assets and market-based funding. For short-term repayment capacity, the company is supported by being a wholly owned subsidiary of HFG, high domestic ratings, NCR headroom, and around KRW 6 trillion in equity capital. On the other hand, it cannot reasonably be treated as a bank-like stable credit based on standalone financials alone, and investors need to continue monitoring earnings volatility, short-term funding, repos, CP, foreign-currency bonds, FVTPL assets, and real estate PF-related risks.

5. Structural Considerations for Bondholders

The most important structural issue for Hana Securities bondholders is that although the issuer is a wholly owned subsidiary of HFG, the direct repayment obligor is Hana Securities. Hana Securities is part of HFG’s consolidation and is closely linked to the group in terms of brand, customer base, capital policy, and regulatory reputation. The audit reports also confirm that HFG is the parent company and that related-party transactions exist. However, parent ownership is not an explicit guarantee. Guarantees, collateral, subordination, covenants, cross-default, events of default, change of control, and bail-in or loss-absorption clauses for individual bonds should be confirmed in the final terms or offering materials for the relevant bond.

HFG has meaningful incentives to support Hana Securities. First, the company is the securities firm that supports HFG’s non-bank strategy, providing financial products, corporate finance, capital markets, and wealth management to Hana Bank customers. Second, damage to the company’s brand or a debt default could adversely affect HFG’s overall market funding, customer confidence, and relationship with regulators. Third, HFG’s consolidated capital and Hana Bank’s credit strength provide context when domestic investors and rating agencies assess group support capacity. These factors are likely to support Hana Securities’ domestic local ratings.

At the same time, support expectations have limits. HFG is a bank holding company and must simultaneously manage bank subsidiary capital, depositor protection, regulatory capital, shareholder returns at the holding company level, and risks at other non-bank subsidiaries. If Hana Securities incurs losses under market stress, the extent, timing, and form of support from HFG will depend on regulation, capital headroom, loss size, implications for other subsidiaries, and reputational risk. The fact that the parent owns 100% of the company does not mean that all bonds carry the same credit risk as Hana Bank bonds.

Bond type also matters. The debenture breakdown in the audit reports includes plain non-guaranteed bonds, subordinated bonds, foreign-currency bonds, private placement bonds, and short-term bonds. At end-June 2025, plain non-guaranteed bonds were approximately KRW 1.29 trillion, subordinated bonds approximately KRW 0.81 trillion, foreign-currency bonds approximately KRW 0.94 trillion, private placement bonds approximately KRW 0.25 trillion, and short-term bonds approximately KRW 2.35 trillion. Subordinated bonds normally have higher loss-absorbing capacity than plain senior bonds and weaker protection in terms of redemption, interest payments, and insolvency ranking. For short-term bonds, refinancing risk can become a problem before credit loss. Foreign-currency bonds require confirmation of foreign exchange, cross-border funding, governing law, target investors, and final terms.

For related parties and intragroup support, the relationship with Hana Bank should also be considered as a supplementary factor. The FY2024 audit report includes references to letters of guarantee from KEB Hana Bank and unused foreign-currency payment guarantee limits, and the end-June 2025 review also mentions foreign-currency payment guarantee limits. This indicates that intragroup bank functions may supplement some of Hana Securities’ transactions and foreign-currency liquidity. However, these transactions are based on specific limits and contracts, and are not blanket guarantees for all debt. In this report, intragroup bank support is treated as a “potential liquidity and transaction support” factor, and is distinguished from a legal guarantee for all outstanding bonds.

For Hana Securities bondholders, the structural recovery sources are the company’s assets, earnings, equity capital, and the potential capital and liquidity support from HFG. Because a large portion of assets consists of FVTPL assets and repo-related assets, recovery value under stress will depend on market liquidity. The audit reports identify liquidity risk, credit risk, market risk, and operational risk as risks under management, but they do not provide detailed collateral or guarantee terms for individual bonds. As an issuer report, the domestic high-grade credit profile and parental support expectations should be acknowledged, but before investing in a specific bond it is necessary to confirm the issuer, guarantee, ranking, subordination, maturity, redemption terms, cross-default, covenants, and governing law.

There are two structural mistakes to avoid. The first is treating Hana Securities as the same kind of bank bond issuer as Hana Bank. Hana Bank is a bank with international ratings of Moody’s Aa3, S&P A+, and Fitch A, and has a deposit, lending, and payments base. Hana Securities is a securities company, and Hana Bank’s credit ratings are not a direct guarantee. The second is mechanically translating a domestic AA rating into a high global investment-grade rating. Korean domestic ratings are relative assessments within the domestic market. For international investors assessing foreign-currency bonds, the Korean sovereign, HFG group, parental support, the market-based nature of the securities company, foreign-currency liquidity, and individual bond terms all need to be assessed together.

6. Capital Structure, Liquidity and Funding

In assessing Hana Securities’ capital and liquidity, the high NCR should be recognised as a support factor, while the concentration in short-term funding and market-based liabilities needs to be weighed heavily. Because the company is not a bank, it is more practical to examine cash and deposits, liquid assets, short-term maturities, reliance on repos, CP, short-term bonds, foreign-currency bonds, collateral posted and received, derivative-related liquidity, unused commitments, and transaction headroom with the parent company and Hana Bank, rather than using LCR or NSFR as primary indicators.

In the end-June 2025 audit review, Hana Securities had borrowings of KRW 17.57 trillion and debentures of KRW 5.64 trillion. Within borrowings, repos were the largest item at KRW 13.09 trillion, followed by CP at KRW 2.69 trillion and borrowings from KSFC and others at KRW 1.43 trillion. Within debentures, short-term bonds were KRW 2.35 trillion, plain non-guaranteed bonds KRW 1.29 trillion, foreign-currency bonds KRW 0.94 trillion, and subordinated bonds KRW 0.81 trillion. In other words, the core funding structure is not long-term stable liabilities, but market-based funding combining repos, CP, short-term bonds, and foreign-currency bonds.

The largest liquidity issue is maturity concentration. The liquidity risk note in the FY2024 audit report shows that, of financial liability cash flows at end-2024, KRW 35.0 trillion was due within three months, KRW 9.45 trillion in over three months and within one year, KRW 4.71 trillion in over one year and within five years, and KRW 2.78 trillion after five years. Of the total KRW 52.0 trillion, the amount due within three months was very large. This is natural to some extent given the securities-company business model, which includes repos, derivatives, financial product liabilities, client deposits received, and short-term borrowings, but for bond investors it means that short-term market access and collateral liquidity are core risks.

Cash and deposits were KRW 4.11 trillion at end-2024 and KRW 4.16 trillion at end-June 2025, which is limited relative to total short-term financial liability cash flows. Of course, securities companies are not designed to repay all short-term liabilities with cash and deposits alone; they use a combination of securities holdings, repos, collateral, client transactions, clearing houses, financial institution lines, parent and group support, and daily treasury management. However, because cash and deposits alone do not sufficiently cover short-term liabilities, liquidity assessment needs to include the quality of securities holdings, collateral eligibility, haircuts, repo counterparties, foreign-currency liquidity, the CP investor base, and the short-term bond investor base.

NCR is strong, but it has declined from 1,483% in 2024 to 1,391% in 2025 and 1,333% in 1Q26. The level remains high, but it moves with asset growth, changes in Total risk, and changes in proprietary-account, derivative, and PF-related exposures. In the HFG Databook, Total risk was KRW 2.57 trillion in 2023, KRW 2.91 trillion in 2024, KRW 3.28 trillion in 2025, and KRW 3.25 trillion in 1Q26. NOC was KRW 4.28 trillion in 2023, KRW 4.90 trillion in 2024, KRW 5.16 trillion in 2025, and KRW 5.05 trillion in 1Q26. Capital headroom has been maintained, but risk volume has also increased, so the direction of NCR should not simply be ignored.

Foreign-currency liquidity should also be confirmed. Foreign-currency bonds were equivalent to KRW 0.94 trillion at end-June 2025, up from KRW 0.62 trillion at end-2024. The audit reports also contain Hana Bank-related references such as foreign-currency payment guarantee limits. Foreign-currency bonds can be an important investment target for international investors, but foreign-currency funding has a different investor base, governing law, settlement, hedging, swap costs, and terms from the domestic won-denominated short-term market. Before investing in an individual foreign-currency bond, the issuance programme, final terms, existence of any guarantee, use of proceeds, redemption terms, tax treatment, governing law, and cross-default provisions need to be confirmed.

The conclusion on capital and liquidity is that Hana Securities is a high-grade domestic securities-company credit supported by NCR and the parent relationship, but it is also an issuer sensitive to liquidity stress because of its large reliance on short-term funding and repos. In normal times, refinancing capacity is likely to be supported by its high domestic ratings and HFG group background. However, if PF concerns in the Korean securities sector, CP market closure, sharp interest-rate moves, collateral value declines, and foreign-currency market volatility overlap, funding conditions can deteriorate before earnings weaken. Bond investors should not take comfort from the NCR level alone, but should assess short-term liability maturities, repo balances, short-term bond balances, foreign-currency bond balances, and support capacity from HFG together.

7. Rating Agency View

For Hana Securities’ ratings assessment, it is necessary to distinguish between domestic local ratings and how international investors should read the credit. The 2023 Sustainability Report appears to show domestic ratings of AA from Korea Investors Service, Korea Ratings, and NICE Investors Service, and an S&P international rating of A-. According to an Asia Business Daily report dated 23 April 2025, NICE Ratings revised the outlook on Hana Securities’ unsecured bond rating from Negative to Stable and maintained the senior unsecured bond rating at AA and the subordinated unsecured bond rating at AA-. However, this report has not directly obtained the latest original releases from NICE, KIS, Korea Ratings, or S&P. Therefore, detailed rating agency upgrade and downgrade triggers remain unconfirmed.

That said, a domestic AA rating should not be mechanically compared with A/Aa ratings on international senior bank bonds. Domestic ratings are relative assessments within the domestic issuer universe and incorporate the Korean sovereign, the HFG group, the relationship with Hana Bank, and domestic investors’ support expectations. Foreign-currency bond investors, by contrast, focus more heavily on foreign-currency liquidity, governing law, international ratings, bond terms, hedging, cross-border settlement, and stress in the Korean financial market. HFG’s official ratings page for Hana Bank shows Moody’s Aa3 / P-1, S&P A+ / A-1, and Fitch A / F1+ as of August 2023, but these are Hana Bank ratings, not direct ratings on Hana Securities bonds.

This report’s credit view recognises high domestic ratings and HFG group support expectations as important supports. However, rating agency assessments should not substitute for analysis. Even with an AA rating, Hana Securities has marketable assets, short-term funding, FVTPL, repos, PF-related risk, and securities-company reputational risk. Ratings should be used as evidence supporting refinancing access and support expectations in the domestic market, while standalone liquidity, capital, and earnings volatility should be analysed separately.

8. Credit Positioning

Hana Securities’ credit positioning is naturally placed between Hana Bank, the HFG holding company, independent or other large Korean securities companies, and global securities firms. Compared with Hana Bank, Hana Securities does not have a deposit, lending, and payments base, and is sensitive to repos, CP, short-term bonds, foreign-currency bonds, FVTPL assets, proprietary-account gains and losses, and market sentiment. Compared with independent small and mid-sized securities companies, it is supported by being a wholly owned HFG subsidiary, having around KRW 6 trillion in equity capital, domestic AA-level ratings, and the group customer base.

In terms of fundamental credit quality, Hana Securities should be viewed as a “high-grade domestic securities-company credit with parental support expectations,” more cautiously than Korean bank senior bonds, but stronger than an independent non-bank. HFG’s brand, capital, and customer base are strong supports, but the earnings and funding of a securities company can deteriorate faster than those of a bank under market stress. Therefore, even under the same Hana name, Hana Bank senior bonds, HFG holding company bonds, Hana Securities plain bonds, Hana Securities subordinated bonds, short-term bonds, and foreign-currency private placement bonds should not be treated as identical.

9. Key Credit Strengths and Constraints

The first strength is that Hana Securities is wholly owned by HFG. The company supports HFG’s non-bank earnings, wealth management, capital markets, securities brokerage, and corporate finance functions. The brand, customer base, and regulatory reputation of HFG and Hana Bank support Hana Securities’ market access and parental support expectations. Particularly for domestic investors, the Hana name and wholly owned HFG status can function as an important credit support beyond standalone financials.

The second strength is the thickness of equity capital and NCR. Equity on the audit report basis was KRW 5.99 trillion at end-2024 and KRW 6.05 trillion at end-June 2025, and NCR in the HFG Databook was 1,391% at end-2025 and 1,333% at end-1Q26. For a securities company, equity capital and NCR are the foundation for loss absorption, underwriting capacity, derivatives, proprietary-account activities, client credit, and short-term market funding. Looking only at the level, this is not an issuer whose main concern is near-term capital shortage.

The third strength is the return to profitability from 2024 onward. The move from a net loss in 2023 back to profit in 2024, 2025, and 1Q26 stabilises the credit view. In particular, the increase in Fee income and Brokerage fee revenue, and net income of KRW 103.3 billion in 1Q26, show that the company has a business base that can capture earnings when markets recover. It is important that this is not a securities company unable to exit the 2023 loss.

The fourth strength is high domestic ratings and market access. Based on the 2023 Sustainability Report and 2025 media reports, the domestic ratings are AA-level, and NICE is reported to have stabilised the outlook. High domestic ratings support market access for CP, short-term bonds, plain bonds, repos, and financial institution transactions. For a securities company, market access is itself part of credit quality, and maintaining ratings is not merely a label. However, the latest rating materials directly confirmed in this report are limited; domestic high ratings are treated as a support for market access, while the detailed support notching and downgrade triggers of the rating agencies remain unconfirmed.

The largest constraint is securities-company market sensitivity. FVTPL assets, FVTPL liabilities, repos, derivatives, proprietary-account assets, and short-term financial products are large, and Other income is volatile. If interest rates, equities, credit, foreign exchange, liquidity, and investor risk appetite deteriorate simultaneously, earnings, capital, collateral, and funding costs can all come under pressure at the same time. The 2023 loss shows that this constraint has materialised in practice.

The second constraint is reliance on short-term funding. At end-2024, KRW 35.0 trillion of financial liability cash flows were due within three months, and at end-June 2025 the company had repo borrowings of KRW 13.1 trillion, CP of KRW 2.7 trillion, and short-term bonds of KRW 2.3 trillion within debentures. In normal times, these are efficient funding tools, but under stress, rollovers, haircuts, collateral values, and counterparty behaviour can all deteriorate at once. This is a constraint not present in bank-type credit.

The third constraint is that parental support expectations are not an explicit guarantee. Being a wholly owned subsidiary of HFG is a major support, but not all of Hana Securities’ debt is guaranteed by HFG or Hana Bank. Especially for foreign-currency bonds, private placement bonds, subordinated bonds, and short-term bonds, the issuer, guarantee, ranking, and redemption terms must be confirmed individually. Overestimating parental support can lead investors to overlook subordination and short-term funding risk.

The fourth constraint is that the details of real estate PF, IB, guarantees, commitments, and proprietary-account risk remain unconfirmed. Given Hana Securities’ 2023 loss, the size of Provision expense, financial guarantees and commitments, and the general industry sensitivity to PF and real estate markets, this area is important for credit analysis. This report confirms the broad outline from public materials, but the details of PF-related exposure, bridge loans, unsold inventory, underwriting guarantees, valuation losses, and provisioning policy remain unconfirmed. This unresolved point is not merely supplementary; it is the largest remaining issue in determining whether the recovery from the 2023 loss can be judged as structural improvement.

10. Downside Scenarios and Monitoring Triggers

The most realistic downside scenario is a recurrence of real estate PF and short-term financial market stress common to the Korean securities-company sector. If real estate conditions deteriorate and valuations decline for PF loans, bridge loans, guarantees, underwriting, unsold deals, and related funds and securitisation products, pressure would first appear in Provision expense, valuation losses, Other income, and equity capital. Next, if investors become cautious toward securities-company CP and short-term bonds, and repo haircuts and collateral requirements tighten, funding costs would rise. The 2023 loss shows that this type of stress is not irrelevant to Hana Securities. Indicators to monitor include PF-related disclosures, provisions, valuation losses, guarantees and commitments, NCR, short-term bond balances, CP issuance conditions, and domestic rating outlooks.

The second downside is a sharp deterioration in S&T and proprietary-account gains and losses due to market price movements. If rising rates, credit spread widening, equity declines, foreign-exchange moves, and higher derivatives volatility overlap, valuations of FVTPL assets and liabilities, hedging, collateral postings, and client flows can all deteriorate simultaneously. Because Hana Securities has large FVTPL assets and liabilities, market movements can feed directly into earnings and liquidity. Monitoring items include Other income, FVTPL assets and liabilities, VaR or market risk amount, Total risk, NCR, collateral posted, and derivative-related contingent liquidity.

The third downside is closure of short-term funding markets. For an issuer with around KRW 13 trillion in repos, KRW 2.7 trillion in CP, and KRW 2.3 trillion in short-term bonds, a deterioration in funding can appear before an earnings decline. If CP investors become cautious, repo counterparties raise haircuts, short-term bond rollovers shorten, and hedging costs in foreign-currency markets rise, cash and deposits in the KRW 4 trillion range would not be a sufficient buffer by themselves. Potential liquidity support from HFG or Hana Bank is supportive, but investors cannot confirm the form of such support contractually. Monitoring items include the short-term liability maturity profile, CP and short-term bond issuance, repo balances, cash and deposits, liquid assets, Hana Bank-related guarantees and limits, and rating outlooks.

Upside triggers would include the earnings recovery continuing beyond a single year or quarter, Fee income and client-asset-based revenues being maintained even in weak markets, reduced volatility in Other income, NCR remaining high, no excessive increase in short-term funding reliance, and greater transparency on PF-related exposures and guarantees and commitments. Conversely, a renewed net loss, renewed expansion in Provision expense, a large negative Other income result, a sharp decline in NCR, difficulty issuing short-term bonds or CP, deterioration in domestic rating outlooks, deterioration in the ratings of the parent or Hana Bank, or expanding PF-related losses would require a reassessment of the current credit view.

11. Credit View and Monitoring Focus

At present, Hana Securities’ credit quality can be assessed as a securities-company credit supported in the domestic market by high ratings and support expectations as a wholly owned HFG subsidiary. However, to determine investment-grade suitability for international investors, the latest international ratings, issuer of foreign-currency bonds, guarantees, ranking, and terms need to be confirmed separately. The quality of the credit is not deposit-driven bank credit like Hana Bank, but market-based financial credit sensitive to marketable assets, short-term funding, repos, CP, and proprietary-account gains and losses. The credit direction has stabilised because the company returned to profit in 2024, 2025, and 1Q26 after the 2023 loss period, but it cannot yet be said that the earnings improvement has become structurally embedded; the pace of improvement should be viewed as gradual and dependent on market conditions.

The largest constraint, meanwhile, is the company’s securities-company reliance on market funding and earnings volatility. For an issuer with borrowings of KRW 17.6 trillion, debentures of KRW 5.6 trillion, FVTPL assets of KRW 37.7 trillion, and FVTPL liabilities of KRW 21.9 trillion at end-June 2025, a high NCR in normal times is not sufficient to judge liquidity under stress. Cash and deposits are in the KRW 4 trillion range, while financial liability cash flows due within three months at end-2024 were around KRW 35.0 trillion, so liquidity assessment must consider not only the cash balance, but also collateral-eligible assets, repo market access, CP and short-term bond rollovers, and intragroup support capacity. HFG support expectations are supportive, but they differ from an explicit guarantee for an individual bond, so the issuer and bond terms must always be confirmed.

The monitoring focus is the Hana Securities sheet in the HFG Databook, Hana Securities audit and semi-annual review reports, NCR, NOC, Total risk, borrowings and debenture breakdown, short-term liability maturities, cash and deposits, FVTPL assets and liabilities, PF-related disclosures, guarantees and commitments, domestic rating outlooks, and the ratings, capital, and earnings of HFG and Hana Bank. If the full-year 2025 audited report for Hana Securities and the latest original rating agency reports become available, the current credit view can be further tested for the repeatability of the earnings recovery, PF-related risk, foreign-currency bond terms, and the extent of parental support incorporated into ratings.

12. Short Summary & Conclusion

Hana Securities is a Korean full-service securities company wholly owned by Hana Financial Group, with around KRW 6 trillion in equity capital, high domestic ratings, and the HFG group customer base. At the same time, it is not deposit-driven bank credit like Hana Bank, but a market-based financial issuer sensitive to repos, CP, short-term bonds, foreign-currency bonds, FVTPL assets, and proprietary-account gains and losses. The recovery from the 2023 loss to profitability in 2024-2026 is supportive, but key monitoring points are NCR, short-term funding, PF-related risk, FVTPL assets, domestic rating outlooks, and the difference between HFG support expectations and individual bond terms.

13. Sources

Primary company sources

• Hana Financial Group, 1Q26 HFG IR Databook, XLSX. Used to confirm Hana Securities’ earnings, total assets, equity, NCR, operating statistics, and the HFG and Hana Bank group context from 2023 to 1Q26.
  https://www.hanafn.com/en/ir/financial/databookDetail.do
• Hana Financial Group, 4Q25 HFG IR Databook, XLSX. Used to confirm full-year 2025 data and the Hana Securities sheet.
  https://www.hanafn.com/en/ir/financial/databookDetail.do
• Hana Financial Group, Financial Report page, Hana Securities FY2024 Audit Report (Consolidated), PDF. Used to confirm the end-2024 and end-2023 consolidated financial position, borrowings, debentures, liquidity risk, maturity profile, and parent-company relationship.
  https://www.hanafn.com/en/ir/disclosure/report.do
• Hana Financial Group, Financial Report page, Hana Securities 1H2025 Audit Report (Consolidated), PDF. Used to confirm the end-June 2025 consolidated financial position, borrowings, debentures, parent-company relationship, related parties, guarantees, and limits.
  https://www.hanafn.com/en/ir/disclosure/report.do
• Hana Financial Group, Financial Report page, Hana Securities FY2023 Audit Report (Consolidated), PDF. Used to confirm end-2023 comparative financials and prior-year information.
  https://www.hanafn.com/en/ir/disclosure/report.do
• Hana Securities, 2023 Sustainability Report. Used to confirm the company overview, establishment date, business description, 100% HFG ownership, employee count, domestic branches, client assets, and ratings display as of 2023.
  https://www.hanaw.com/download/bbs/pdf/2023_ManagementReportEng.pdf
• Hana Financial Group, Credit Ratings page. Used to confirm Hana Bank’s international ratings as HFG group context. Not used as a direct rating on Hana Securities bonds.
  https://www.hanafn.com/en/ir/creditratingList.do

Secondary sources

• Asia Business Daily, NICE Ratings Upgrades Hana Securities' Credit Rating Outlook to 'Stable', 2025-04-23. Used as a media report on NICE’s outlook stabilisation and maintenance of senior and subordinated ratings. Treated as supplementary information because it is not the original rating agency report.
  https://www.asiae.co.kr/en/article/2025042317394286760
• Seoul Economic Daily, Hana Securities Q1 Net Profit Jumps 37% to 103.3 Billion Won, 2026-04-24. Used to confirm media reporting on 1Q26 results. Official Databook figures are prioritised.
  https://en.sedaily.com/markets/2026/04/24/hana-securities-q1-net-profit-jumps-37-percent-to-1033
• Yonhap News Agency and other public news references for HFG 1Q26 group earnings context. Official Databook figures are prioritised in the body, and media reports are used only as supplementary references.

Internal extraction files

• issuer_summary/issuers/hana_securities/data/hana_securities_credit_metrics_20260516.json
• issuer_summary/issuers/hana_securities/data/hana_financial_group_1q26_ir_databook.xlsx
• issuer_summary/issuers/hana_securities/data/hana_financial_group_4q25_ir_databook.xlsx
• issuer_summary/issuers/hana_securities/data/hana_securities_fy2024_audit_report_consolidated.pdf
• issuer_summary/issuers/hana_securities/data/hana_securities_1h2025_audit_report_consolidated.pdf
• issuer_summary/issuers/hana_securities/data/hana_securities_fy2023_audit_report_consolidated.pdf
• issuer_summary/issuers/hana_securities/data/hana_securities_2023_sustainability_report.pdf

Unverified / Pending

• Hana Securities’ full-year 2025 audited consolidated audit report has not been obtained. Full-year 2025 figures are based on the HFG Databook.
• The latest original rating reports from NICE, KIS, Korea Ratings, and S&P have not been obtained. NICE’s 2025 outlook stabilisation is treated as supplementary information based on media reporting.
• Detailed risk amounts for real estate PF, bridge loans, guarantees, unsold inventory, proprietary-account investments, and FVTPL assets have not been confirmed.
• Final terms, guarantees, covenants, cross-default, change of control, governing law, subordination, and bail-in or loss-absorption clauses for individual foreign-currency bonds, plain bonds, subordinated bonds, and short-term bonds have not been confirmed.
• Live bond prices, spreads, OAS, CDS, and relative value versus peer foreign-currency bonds have not been confirmed.