HANA FINANCIAL GROUP INC.

U.S. RESOLUTION PLAN

PUBLIC SECTION

DECEMBER 2018

This document may contain forward-looking statements to provide explanations of Hana Financial 

Group’s businesses and results of operations. These forward-looking statements reflect our current views 

with respect to future events and performance, and are generally identified by the use of forward-looking 

terminology, such as “expect”, “plan”, “intend”, and similar expressions. You are cautioned not to 

place undue reliance in these forward-looking statements, which reflect management’s current analysis of 

future events. We undertake no obligation to publicly update or revise any forward-looking statements, 

whether as a result of new information, future events, or otherwise.
TABLE OF CONTENTS

1. Introduction ...............................................................................................................................1

2. Core Business Lines...................................................................................................................2

3. Material Entities........................................................................................................................2

4. Summary of financial information regarding assets, liabilities, capital and major 

funding sources..........................................................................................................................2

5. Derivatives and hedging activities............................................................................................4

6. Memberships in material payment, clearing and settlement systems...................................4

7. Foreign operations.....................................................................................................................4

8. Material supervisory authorities..............................................................................................4

9. Principal officers........................................................................................................................5

10. Resolution planning corporate governance structure and processes related to 

resolution planning....................................................................................................................6

11. Material management information systems............................................................................6

12. Resolution strategy summary ...................................................................................................7
1

1. Introduction

U.S. resolution plan rules

In September 2011, the Federal Deposit Insurance Corporation (“FDIC”) and the Board of Governors of 

the Federal Reserve System (“FRB”) issued a final rule (“Joint Rule”) implementing Section 165(d) of 

the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. This rule requires foreign 

banking organizations that are treated as bank holding companies (“BHCs”) under Section 8(a) of the 

International Banking Act with total global consolidated assets of U.S. $50 billion or more to submit 

periodically to the FRB and the FDIC a plan for the rapid and orderly resolution in the event of material 

distress or failure of the U.S. operations of the BHC.

Because Hana Financial Group Inc. (“HFG” and, together with its subsidiaries, the “Group”) is a BHC

under the International Banking Act, it has prepared this resolution plan (the “U.S. Resolution Plan”) in 

accordance with the Joint Rule. All information provided in the U.S. Resolution Plan is as of December 

31, 2017 unless specified otherwise.

Overview of HFG’s Global Operations

HFG is a publicly-traded financial holding company established and organized under the Financial 

Holding Companies Act of Korea with its head office in Seoul, Korea. HFG offers a diverse line of 

financial products and services through its numerous subsidiaries, including KEB Hana Bank. In 2016 

and 2017, HFG voluntarily wound down and terminated three U.S. non-banking subsidiaries: BNB 

Statutory Trust I, BNB Real Estate Holding, LLC, and BNB Funding Corp. HFG transferred its 

ownership interest in Hana Bancorp, Inc. (“HBC”), a bank holding company, to KEB Hana Bank in 

March 2016, with the ownership interest being increased to 90.56% through an additional capital increase. 

Based on total asset value, HFG is the fourth largest financial group in Korea as of December 31, 2017.

In addition, the Group has the largest overseas network among Korean financial service providers. The 

Banker (published on July 2, 2018) ranked HFG as the 79th largest (based on Tier 1 capital) financial 

institution in the world. As of December 31, 2017, HFG’s consolidated assets totalled approximately 

KRW 360 trillion (U.S. $336.1 billion) and its consolidated liabilities (including deposits) totalled 

approximately KRW 335.3 trillion (U.S. $312.9 billion).1

In 2014, HFG drew up a strategic vision, ‘The Trusted Premier Global Financial Group’, together with its 

executives and employees. Pursuant to this vision, the Group took steps to improve customer satisfaction 

and enhance shareholder value in the face of challenging economic environments at home and abroad.

HFG continues to move forward with its vision, creating synergies and improving upon its competencies 

in banking, securities, credit card, insurance, retail financing and overseas business. To rise above the 

challenge of the low interest rate environment and to grow into a premier global financial group, HFG

will further strengthen its competitive advantages in the non-banking sector and overseas business, both 

of which continue to possess relatively high growth potential.

 

1 US dollar figures were converted from the numbers in HFG’s financial statements as of December 31, 2017, using 

an exchange rate of 1,071.4 KRW/USD, which was the spot exchange rate at the beginning of December 31, 2017. 

For the sake of consistency, all figures in the U.S. Resolution Plan originally denominated in Korean Won were 

converted into US dollars using the same spot exchange rate.
2

U.S. Operations

HFG operates in the U.S. through the New York Agency of KEB Hana Bank (the “KEB Hana NY 

Agency”), KEB Hana NY Financial Corp. (“KEB NY”), KEB Hana LA Financial Corp. (“KEB LA”) and 

KEB Hana Bank USA, N.A. (“KEB Hana USA”), which is held by Hana Bancorp, Inc. (“HBC”), a bank 

holding company. HFG transferred its ownership interest in HBC to KEB Hana Bank in March 2016, 

with its ownership interest being increased to 90.56% through an additional capital increase. The KEB 

Hana NY Agency engages primarily in wholesale banking services. KEB NY and KEB LA engage

primarily in various corporate lending and trade financing activities. KEB Hana USA engages primarily 

in lending activities to small and medium sized enterprises and those involving commercial real estate.

2. Core Business Lines

The Joint Rule defines Core Business Lines (“CBLs”) as those business lines of the covered company, 

including associated operations, services, functions and support, that, upon failure, would result in a 

material loss of revenue, profit or franchise value. Under the Joint Rule, because HFG is a foreign 

banking organization, the scope of the CBL analysis is limited to those operations conducted in whole or 

material part in the United States. HFG has determined that none of its U.S. operations satisfies the Joint 

Rule’s definition of a CBL for U.S. resolution planning purposes. 

3. Material Entities

The Joint Rule defines Material Entities (“MEs”) as those legal entities of HFG that are significant to the 

activities of a CBL or critical operation. Under the Joint Rule, because HFG is a foreign banking 

organization, the scope of the ME analysis is limited to those entities domiciled, or who conduct 

operations in whole or material part, in the United States. Because HFG has no CBLs or critical 

operations in the United States under the Joint Rule, none of its U.S. entities are MEs under the Joint Rule.

4. Summary of financial information regarding assets, liabilities, capital and major 

funding sources

The following table summarizes the consolidated balance sheet of HFG as of December 31, 2017.

2

 

2 The applicable KRW/USD exchange rate is 1,071.4/1. 
3

Consolidated Balance sheet of HFG

(as of December 2017)

(Unit: millions of Korean Won)

Assets Amount

Cash and due from banks 21,850,692

Financial assets held-for-trading 22,704,104

Financial assets designated at fair value through profit or loss 1,292,758

Available-for-sale financial assets 46,921,429

Held-to-maturity investments 7,392,100

Loans receivable 238,943,185

Derivative assets used for hedging purposes 23,724

Investments in associates and joint ventures 1,073,578

Property and equipment 2,651,551

Investment property 976,572

Intangible assets 823,856

Net defined benefit assets 44,545

Deferred income tax assets 150,533

Current tax assets 10,868

Non-current assets held for sale 439,324

Other assets 14,790,530

Total assets 360,089,349

Liabilities Amount

Financial liabilities held-for-trading 7,834,600

Financial liabilities designated at fair value through profit or loss 8,819,336

Deposits 232,166,153

Borrowings 18,791,895

Debentures 36,444,451

Derivative liabilities used for hedging purposes 71,797

Net defined benefit liability 25,573

Provisions 384,102

Deferred income tax liabilities 144,676

Current tax liabilities 678,253

Other liabilities 29,900,569

Total liabilities 335,261,405

Equity Amount

Issued capital 1,480,015

Hybrid equity securities 443,769

Capital surplus 10,463,033
4

Capital adjustments -15,049

Accumulated other comprehensive income -765,642

Retained earnings 12,267,565

Equity attributed to the equity holders of the parent 23,873,691

Non-controlling shareholders' equity 954,253

Total equity 24,827,944

Total liabilities and equity 360,089,349

The following table summarizes the capital ratios of HFG and KEB Hana Bank as of December 31, 2017.

HFG KEB Hana Bank

BIS Capital Ratio (actual) 14.97% 15.98%

Tier 1 Capital Ratio (actual) 13.29% 13.56%

5. Derivatives and hedging activities

None of HFG’s U.S. entities and offices is a party to any swaps, repurchase agreement, or derivative 

transactions, and therefore, HFG does not have any exposure related to such activities in connection with 

its U.S. operations.

6. Memberships in material payment, clearing and settlement systems

HFG uses payment, settlement and clearing systems to conduct its operations and meet customer needs. 

In particular, KEB Hana NY Agency uses the Fedwire Funds Service as well as the Society for 

Worldwide Interbank Financial Telecommunication (“SWIFT”) messaging service, while KEB Hana 

USA uses the Fedwire Funds Service. These systems are used by HFG’s U.S. operations to facilitate 

customer payment services and to support the U.S. operations’ financial market activities.

7. Foreign operations

As of December 31, 2017, HFG has a presence in 158 locations over 24 countries across six continents.

HFG has the largest and the most extensive Korean headquartered global banking and finance network.

HFG pursues a continuous expansion of its global network and formation of strategic partnerships with 

overseas financial institution. In 2017, KEB Hana established new branches in Indonesia.

8. Material supervisory authorities 

HFG is subject to the laws and regulations that are a condition for authorization to conduct banking and 

financial services business in each country of incorporation and operation. These requirements are 

largely prescribed on a jurisdictional basis by the applicable government, central bank, regulatory 

authorities or other applicable bodies. 

HFG and KEB Hana Bank are regulated by the Korean Financial Services Commission and Financial 

Supervisory Service. KEB Hana Bank is also regulated by the Korean Ministry of Strategy and Finance 
5

and Financial Services Commission in connection with their foreign exchange businesses. Because HFG 

is a foreign banking organization treated as a bank holding company, the FRB has general regulatory 

oversight over HFG and its U.S. entities in connection with their U.S. operations. The KEB Hana NY 

Agency is principally regulated by the NYDFS. KEB LA is licensed and regulated by California State 

Division of Corporations. KEB Hana USA is principally regulated by the Office of the Comptroller of the 

Currency and the FDIC. 

9. Principal officers

Information regarding HFG’s Board of Directors is presented in the following table.

(As of December 31, 2017)

HFG BOARD OF DIRECTORS

Standing Directors

Name Appointed Title

Jung-tai Kim 2012 Chairman and CEO (HFG)

Byoung-ho Kim 2016 Vice Chairman (HFG) (Management Planning Unit)

Young-joo Ham 2016 Vice Chairman (HFG) (Management Support Unit)

Independent Directors

Name Appointed Title

Jong-nam Yoon 2013 Chairman of the Board of Directors

Ki-jin Song 2014 Independent Director

In-bae Kim 2014 Independent Director

Sung-bock Yoon 2015 Independent Director

Won-keun Yang 2015 Independent Director

Won-koo Park 2016 Independent Director

Eun-young Chah 2017 Independent Director
6

Information regarding HFG’s principal management is presented in the following table.

(As of December 31, 2017)

HFG PRINCIPAL MANAGEMENT

Name Title

Jung-tai Kim Chairman and CEO (HFG)

Byoung-ho Kim Vice Chairman (HFG) (Management Planning Unit)

Young-joo Ham Vice Chairman (HFG) (Management Support Unit)

Je-bong Yoo Deputy President (HFG) (Chief Global Strategy Officer)

Jun-sung Han Deputy President (HFG) (Chief Future Innovation Officer)

Seong-muk Kang Senior Executive Vice President (HFG) (Chief Human Resource Officer)

Cheol-seung Kwark Senior Executive Vice President (HFG) (Chief Financial Officer, Chief Strategy 

Officer)

Gil-joo Kwon Senior Executive Vice President (HFG) (Head of Management Support Office)

Yeong-keun Ann Senior Executive Vice President (HFG) (Chief Change Management Officer)

Si-wan Yoo Senior Executive Vice President (HFG) (Chief Information Officer)

Hyo-sang Hwang Senior Executive Vice President (HFG) (Chief Risk Officer) 

Yi-Soon Kang Executive Vice President (HFG) (Chief Operations Officer)

Heui-dae Kim Executive Vice President (HFG) (Chief Compliance Officer)

Hoo-seung Lee Executive Vice President (HFG) (Chief Internal Audit Officer)

10. Resolution planning corporate governance structure and processes related to 

resolution planning 

Currently, the only resolution planning requirement to which HFG is subject is the U.S. resolution 

planning requirement in the Joint Rule. Accordingly, HFG’s resolution planning governance in 2018 was 

focused on the proper preparation and timely submission of the U.S. Resolution Plan. 

In 2018, HFG’s Global Strategy Team (“GST”) was responsible for providing coordination and 

consistency in preparing the U.S. Resolution Plan. It received assistance from HFG’s Compliance Team 

and from overseas executives from KEB Hana Bank. The GST was responsible for preparing and 

gathering data and reviewing an initial draft of the U.S. Resolution Plan. Data related to U.S. operations 

was provided by Hana’s U.S. Working Group. The U.S. Working Group included the Agent and General 

Manager of KEB Hana NY Agency, the President and CEO of KEB Hana’s U.S. subsidiaries, and the 

President and CEO of KEB Hana USA.

After the GST prepared and reviewed the preliminary U.S. Resolution Plan, it was presented for review to 

the Chief Global Strategy Officer (“CGSO”) and the U.S. Resolution Plan Steering Committee. The U.S. 

Resolution Plan Steering Committee is comprised of the CFO, Chief Risk Officer, CGSO and other 

executives in charge of overseas operation. On December [ ], 2018, after a careful review of the draft 

U.S. Resolution Plan and the governance organization that prepared the U.S. Resolution Plan, the CGSO, 

who has been granted delegation of authority from the HFG board of directors, approved the U.S. 

Resolution Plan.

11. Material management information systems

HFG has robust operational and management information systems to monitor the financial health and risk, 

and support the operations, of its global operations. The KEB Hana NY Agency relies on a system 

developed by KEB Hana Bank while the KEB Hana entities rely on a system developed by KEB Hana to 

support their respective day-to-day operations. KEB Hana USA relies on a system purchased from a 

specialized company in accordance with guidelines set by relevant regulatory agencies. These systems 
7

are used for credit and market risk management, banking and trading transaction recordkeeping, trade 

reporting, middle office processing, and client and referential data maintenance and analysis. HFG’s 

management information systems are a combination of customized commercial systems and custom 

systems developed in-house. 

12. Resolution strategy summary

Because it does not have MEs or CBLs under the Joint Rule, HFG’s U.S. Resolution Plan is not required 

to provide a detailed strategy for the resolution of its U.S. entities and operations in the event of its failure. 

Nonetheless, HFG’s U.S. Resolution Plan does include a high-level discussion of the insolvency of its 

U.S. entities under applicable U.S. insolvency law in order to provide context to HFG’s determination 

that it does not have CBLs, critical operations, or MEs, and that its failure would not pose risks to U.S. 

financial stability.

The KEB Hana NY Agency would be subject to liquidation proceedings overseen by the Superintendent 

of the NYDFS (“Superintendent”) pursuant to Article 13 of the New York Banking Law. Upon its 

seizure by the Superintendent, the property of the KEB Hana NY Agency would be “ring fenced,” 

meaning that title to all property on the books of the KEB Hana NY Agency, wherever located, and all 

property of KEB Hana Bank situated in New York, would immediately vest with the Superintendent. The 

Superintendent would use the ring-fenced assets to satisfy the claims of unaffiliated creditors of the KEB 

Hana NY Agency and would return any remaining assets to KEB Hana Bank or its insolvency estate.

HBC, KEB NY and KEB LA would each be eligible for resolution under either Chapter 11 or Chapter 7 

of the Bankruptcy Code. Depending on acquirer interest, it may be possible to sell substantially all of the 

assets and operations of some or all of these entities to one or more buyers in expedited sales under 

Section 363 of the Bankruptcy Code. In the absence of such sales, HFG expects these entities would be 

wound-down in an orderly manner and liquidated. KEB Hana USA would be resolved under the Federal 

Deposit Insurance Act by the FDIC, following its appointment as receiver, through an immediate whole 

bank purchase and assumption (“P&A”) transaction transferring its operations to another bank or a 

transfer to a bridge bank and a subsequent sale of the operations to another bank through a whole bank 

P&A transaction.