Hana Financial Group said on Thursday it posted first-quarter consolidated net profit of 1.21 trillion won, up 7.3 percent, or 82.3 billion won, from a year earlier.

Despite one-off costs including 82.3 billion won in foreign-exchange translation losses due to a rise in the exchange rate, it posted results that exceeded market expectations on the back of a more diversified earnings portfolio, asset growth, groupwide cost efficiency and pre-emptive risk management.

It also continued gains from diversifying its earnings structure. First-quarter core earnings totalled 3.17 trillion won, combining interest income of 2.51 trillion won and fee income of 667.8 billion won. That was up 13.6 percent, or 378.7 billion won, from a year earlier. Net interest margin was 1.82 percent.

Fee income, in particular, rose 28.0 percent, or 146.2 billion won, from a year earlier, helped by growth in asset management businesses including trusts, brokerage and asset management, as well as the investment banking business.

Cost efficiency also improved. The first-quarter C/I ratio was 38.8 percent, down 0.1 percentage point from a year earlier.

Profitability indicators also improved. Return on equity was 10.91 percent, up 0.29 percentage point from a year earlier, and return on assets was 0.73 percent. The common equity tier 1 ratio was 13.09 percent and is being managed steadily within the target range of 13.0 to 13.5 percent.

Asset quality indicators also improved, with the first-quarter credit cost ratio at 0.21 percent, down 0.08 percentage point from a year earlier.

As of end-March, the group's total assets were tallied at 897.65 trillion won, including 212.28 trillion won in trust assets.

Hana Bank, a key affiliate, posted first-quarter net profit of 1.10 trillion won. That was up 11.2 percent, or 111.3 billion won, from a year earlier. Despite one-off factors including 82.3 billion won in foreign-exchange translation losses and 75.3 billion won in special retirement costs, results improved on the back of expanded foreign-exchange and asset management fees and growth in retirement pensions.

Hana Bank's core earnings were 2.48 trillion won, combining interest income of 2.18 trillion won and fee income of 297.3 billion won, and its net interest margin was 1.58 percent. Total assets were 694.90 trillion won, including 130.45 trillion won in trust assets.

Non-bank affiliates also showed overall growth. Hana Securities posted first-quarter net profit of 103.3 billion won, up 37.1 percent from a year earlier. Hana Card recorded 57.5 billion won, Hana Capital 53.5 billion won, Hana Life 7.9 billion won and Hana Asset Trust 6.7 billion won in net profit, respectively.

Hana Financial's board approved a 200 billion won share buyback and cancellation, along with a quarterly cash dividend of 1,145 won per share. That is about 11.6 percent higher than last year's average dividend.

As part of a previously announced 400 billion won share buyback and cancellation programme, it plans to continue additional shareholder return policies. It also expects an improved after-tax dividend yield effect, with separate taxation of dividend income planned for the first to third quarters and tax exemption for dividend income set to apply in the fourth quarter.

A Hana Financial official said, "We are continuing a stable earnings trend through diversifying our earnings base, improving cost efficiency and strengthening risk management," adding, "We will also continue to expand shareholder return policies."