Hana Bank to pare down bad-loan ratio

The lender targets 20% profit rise as it expects economy to be stable this year.

Hana Bank, the lending unit of South Korea’s fourth-largest financial company, said it will cut bad loans and increase the number of clients to spur profit by about 20 percent this year.

Hana plans to trim the non-performing loan ratio to 1.3 percent this year from an estimated 1.5 percent for 2010, Chief Executive Officer Kim Jung Tai said on Tuesday in an interview in Seoul. The lender aims to increase the number of active domestic customers by 30 percent to 4.2 million, he said.

“We expect the economy to be stable, even though it’s not showing rapid growth, and that will help us reduce the delinquency rate and bad-loan ratio this year to boost profit,” Kim, 58, said. “We also developed lots of creative products such as smart-phone banking and Internet-based mortgage lending to lure more retail customers.”

South Korean banks are starting to curb soured loans to property companies and builders, which contributed to a 6.9 percent drop in third-quarter profit, according to the Financial Supervisory Service. KB Financial Group Inc. and Woori Finance Holdings Co., owners of the nation’s largest lenders, predict better profit this year as provisions against bad debt fall.

View the full story in Bloomberg.