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2013 Hana Financial Group Sustainability Report

The 2013 Hana Financial Group Sustainability Report is the third sustainability report to be released by Hana Financial Group (HFG). This report has been prepared in ac-cordance with the Global Reporting Initiative (GRI) G3.1 Guidelines, encompassing economic, environmental and social responsibilities of HFG in a comprehensive and balanced manner for the year ending December 2013.With this report, HFG aims to provide information regarding the sustainability activ-ities and performances of the company to the stakeholders. The company will also share its future plans with shareholders, and plans to collect diverse feedback which will contribute to the sustainable development of society. The Hana Financial Group Sustainability Report can be downloaded from the HFG website (www.hanafn.com).

Reporting Period The reporting period dates from January 1st, 2013 to December 31st of the same year and the report covers HFG’s management activities, performances and CSR for the given period. However, data from the past three years (from January 2011 to December 2013) has been utilized in the 2013 report for time series analysis. Data leading up to 2014 has also been included in the case of HFG’s significant activities and performance.

Reporting Scope and BoundaryThe scope of this report includes HFG’s sustainability activities and performances carried out in Korea. The organizational boundary of reporting is set upon major affiliates/subsidiaries of HFG i.e., Hana Holding Company, Hana Bank, Korea Exchange Bank, Hana Daetoo Securities, Hana SK Card, Hana Life, Hana Capital, Hana Institute of Finance, Hana I&S, Hana Asset Trust and Hana Savings Bank. When the acronym “HFG” is used for the subject matter in the report, this implies that the content is applicable for the entire group. For content specific to each affiliate, the subject indicates the affiliate thereof.

Independent Assurance To ensure reliability, objectivity and fairness of this report, the independent assurance has been conducted on the process of assurance upon all the content and data by an assurer that has no affiliation with HFG. The assurance statement is available on pages 84~85.

Contact Point for Inquiries on 2013 Hana Financial Group Sustainability ReportFor information or inquiries on the report, please contact the Communication Team of HFG.Communication Team at Hana Financial Group Inc.T. +82-2-2002-1760

About this Report

04 CEO Message

2013 Sustainable Performance Highlights

Company Profile

Vision & Values

Governance

Business Model

The Economic Value Generated and Distributed

Stakeholder Engagement

Materiality Analysis

Special Story I : HFG’s Committee for Sharing Happiness

04060810151719202122

Healthy Finance,Happy Together

404142

Global Hana Financial Group

Global Network Expansion

Global Cooperation

Global No.1 Hana Financial Group

24 263032

Trusted Hana Financial Group

Ethical Management

Risk Management

Financial Consumer Protection

343638

Premier Hana Financial Group

Products and Services

Smart Finance

Customer-Oriented Management

The Trusted Premier Global Financial Group

7677787980

Hana Capital

Hana Institute of Finance

Hana I&S

Hana Asset Trust

Hana Savings Bank

68 707172737475

Hana Network

Hana Financial Group Inc.

Hana Bank

KEB

Hana Daetoo Securities

Hana SK Card

Hana Life

Happy Hana, Hana Network

4457586166

Hana Financial Group that Shares Happiness

Social Contribution

Social Contribution Organizations

2013 Social Contribution Activities

Special Story II :2013 Modu-Hana Day Campaign

46

495055

Hana Financial Group that Grows Together

Products and Services for the

Public Interest

Community Involvement

Human Resource Management

Environmental Management

Growing Together, Sharing Happiness

82848690

81 Appendix Principles and Performance for Sustainable Management

Independent Assurance Report

GRI G3.1 Index

2013 Sustainability Awards

Contents 2013 HANA FINANCIAL GROUP SUSTAINABILITY REPORT

CEO Message

“HFG will continue to be a healthy finan-

cial group that takes the lead in establish-

ing a healthy corporate culture, fulfills its

given roles in the financial sector based on

principle-based management, and grows

together with the society.”

4

Distinguished stakeholders,

First and foremost, I would like to express my sincere gratitude to all of you for supporting Hana Financial Group.

As mutual prosperity of companies and the society garners a stronger attention, HFG set a new vision of “The Trusted

Premier Global Financial Group” based on a mission of “Growing Together, Sharing Happiness.” The new mission and

vision are HFG’s commitment and promise to you to grow as a premier financial group through global competitiveness to

be united with locale all over the world. They also signify HFG’s endeavors to take a pioneering approach by preemptive

perception of the changing times and their efforts to gain trust through services where customer satisfaction is the top

priority.

For HFG, 2013 was a year to lay the foundation for quantum leaps. HFG brought Korea Exchange Bank (KEB) into its

fold as a fully owned affiliate through a stock exchange. HFG now runs Korea’s largest global network in the financial

sector with 128 networks in 24 countries as on May 2013. The asset value of the company is KRW 368.5 trillion, up

6% from 2012. In August 2013, HFG’s network expansion crystalized in North America by acquiring Broadway National

Bank (BNB) which is the only Korean bank in the United States that has the license of a national bank as a Korean

financial company in the United States In November, HFG signed an MOU with Barclays Africa, tapping into the African

market for the first time as a Korean bank, and operating there in full swing as a global financial group.

HFG has also strived to openly communicate with customers, communities and stakeholders to attain mutual growth.

HFG has been persistent in responding to social issues on the information protection of financial consumers and

endeavoring to build up trust with customers. Setting up the Financial Consumer Protection Division for the first time

in the domestic financial sector, organizing the declaration ceremony on the Healthy Responsibilities through the Moral

Rearmament, and declaring the Charter for the Protection of Financial Consumers’ Rights per affiliate are a few exam-

ples of these initiatives. These schemes were aimed to build up customer trust with integrity. Seeking to fulfill CSR in a

financial group to a greater degree, HFG opened three additional in-house childcare centers, taking the lead in helping

women to become economically active and resolving the low birth rate problem. HFG aims to have the largest number

of in-house childcare centers in the financial sector. Moreover, the Committee for Sharing Happiness was launched in

April 2013 which helps in improving the execution capabilities of CSR measures through systematic and proactive social

contribution activities.

HFG will strive the utmost as a corporate citizen for a healthier and happier society. HFG will cheer for your happiness

and success as a genuine partner, so that customers, shareholders and communities can be united to achieve the new

vision of “The Trusted Premier Global Financial Group.” For HFG, your continued support is greatly appreciated.

Thank you.

September 2014Chairman Jung-Tai Kim of Hana Financial Group

54 2013 HANA FINANCIAL GROUP SUSTAINABILITY REPORT

6

2013 Sustainable Performance Highlights

Launch of the Committee

for Sharing Happiness

HFG launched the “Committee for Sharing Happiness” in April 2013 for proactive fulfillment of CSR. The committee consists of top cor-prates of HFG including Chairman Jung-Tai Kim of HFG. The commit-tee’s scope of activities comprises of setting and evaluating strategies and policies for CSR. The comittee is a manifestation of HFG’s will to initiate more systematic and pio-neering CSR activities.

01Declaration of the Healthy

Responsibilities through

the Moral Rearmament

In June 2013, HFG held a decla-ration ceremony on the Healthy Responsibilities through the Moral Rearmament with 650 employees and executives, including the Chair-man, heads of divisions and branch managers, all aiming for the prac-tice of transparent management. They reaffirmed their commitment for action as healthy members in finance, by sharing four responsibil-ities on customer-centeredness, in-formtion protection, mutual respect and morality.

02Hana Bank - the Winner

of the ‘Red Dot Design

Award’

In July 2013, Hana Bank’s brand design was selected as the winner of the ‘Red Dot Design Award’ in the communication design cate-gory. Hana Bank has been on a winning spree with three global de-sign awards for the first time as a domestic bank. The awards were at the ‘IF Design Awards 2010’ in Ger-many and the ‘IDEA Award 2011’ in the U.S. and the ‘Red Dot Design Award’.

Incorporation of BNB of

the U.S. as a affiliate

HFG paved the way for network ex-pansion in North America by incor-porating Broadway National Bank (BNB) as a affiliate in August 2013. This enables HFG to provide com-prehensive financial services in the U.S. and expand the points of sales in the U.S. to nine. Continued risk management and sharing of sales systems with BNB will catapult HFG as a global finan-cial player highly acclaimed by local customers.

0403


Signing of an MOU with

Barclays Africa

In a first for a Korean bank, Hana Bank succeeded in tapping into Africa for the first time through an MOU signed with Barclays Africa, a local African bank in July 2013. The bank plans to provide a full range of financial services to companies that have advanced into and are trading in Africa in partnership with Barclays Africa, and expand local services by in a phased manner.

05 06 07 08Modu-Hana Day Campaign

On every November 11, HFG leads it’s “Modu-Hana Day” (a catch phrase in Korea meaning the day everyone becomes one) campaign which directs large-scale volun-teering activities to become one with neighbors, colleagues and the world. The campaign marked its third anniversary in 2013 where employee and family volunteering corps participated in the One Per-son One Sharing campaign, Shar-ing Festival and making kimchi. They contributed in and exhibited the act of sharing with their neigh-bors.

Opening of Hana Puruni

Childcare Center in Euljiro,

Anam-dong and Ojeong-

dong in Daejeon

HFG opened in-house childcare centers at their headquarters, Anam-dong branch of Hana bank and Ojeong-dong branch of Hana bank. The centers were opened as part of HFG’s goal to open eleven childcare centers nationwide. With this project, HFG will be ranked as the nation’s largest provider of in-house childcare centers in the financial sector with fifteen centers including four existing centers at Seocho, Ilsan, Bundang and Suji.

“Best Bank in Korea” by

Euromoney, and “Best

Private Bank in Korea” by

The Banker

In July 2013, Hana Bank won the highest honour in the country in the banking sector i.e., “Best Bank in Korea” at the “Award for Excellence 2013” ceremony of Euromoney. In October, HFG was selected as the “Best Private Bank in Korea” by The Banker at the “5th Global Private Banking Awards 2013” marking three consecutive years of receiving the award.

India

2

United Kingdom

1

France

1

U.A.E

2

Netherlands

1Germany

1

Turkey

1

Czech

1

Bahrain

1

General Status

Company Name Hana Financial Group Inc.

Tel. +82-2-2002-1110

HQ Address 55 Euljiro, Jung-gu, Seoul

No. of Total Stocks Issued 289,894,062 shares

Date of Establishment December 1, 2005

CEO Jung-Tai Kim

No. of Employees23,094 people (regular employees in Korea as on December 2013)

Website www.hanafn.com

Management Slogan

The management slogan of “Healthy Finance, Happy Together” is HFG’s commitment to make the society healthier with “Healthy Hana Financial Group” consisting of “healthy Hana members.” HFG will grow as “Healthy Hana Financial Group” together with the society, while fulfilling given roles in the financial sector based on principle-based management as well as leading a healthy corporate culture.

Status of HFG’s Subsidiaries

Seeking to enhance international competitiveness in the financial industry, HFG pushes to achieve maximum competencies of the holding company and subsidiaries by managing HFG on three key pillars: “management strategies,”“distribution channels” and “product development.”In August 2013, HFG acquired Hana Bancorp, Inc. (formerly, BNB Financial Services Corporation) as a affiliate, maximizing synergies. In December 2013, company names changed from Hana Daol Trust to Hana Asset Trust, and from Hana Daol Fund Management to Hana Asset Management.

Healthy Finance, Happy Together

· The percentage represents the equity ratio in a affiliate held by HFG.

· Details on Hana Network are available on the website of HFG.

www.hanafn.com/network/hanaNetwork/networkIndex.do

Hana Network (as on May 2014)

Hana Financial Group

Hana Financial Group started as Korea Investment & Finance Corporation in 1971, converted into Hana Bank in 1991, and then carried on its steady growth as a comprehensive financial group starting from 2005. HFG has strived to serve as “The Trusted Premier Global Financial Group” by imparting greater conveniences to customers in the world in the form of wide-ranging financial products and services such as bank, securities, card, capital and insurance. HFG is now ready to stretch out to a broader horizon with bigger ambitions. HFG will make a happier tomorrow for all by moving steadily forward as a global financial group driven by Korea’s largest global network.

EUROPE & MIDDLE EAST

10Company Profile

Management strategies and company-wide support Produce development engines Product sales channels

Hana Bank100%

Hana Savings

Bank100%

Hana SK Card51%

Hana Asset Trust100%

Hana Capital50.1%

Hana Bancorp,

Inc.71.37%

Hana Life100%

KEB100%

Hana I&S100%

Hana Institute of

Finance100%

Hana Financial Group Holding Company

Hana Daetoo

Securities100%

Russia

1

China

32 Japan

5

Singapore

2

Philippines

2Vietnam

3Myanmar

1

Australia

1

U.S.A

11

Panama

1

Canada

9

Brazil

1

Chile

1

Indonesia

42

Hong Kong

5

2013 HANA FINANCIAL GROUP SUSTAINABILITY REPORT

Global Network

HFG has a global network with 128 centers in 24 countries, the largest of its kind in Korea as of May 2014. HFG will shift as a globally recognized financial group by offering differentiated products and services to not just Korean companies that have a presence abroad but also to local customers and companies. The goal will be also achieved by overcoming the market environment of low margin and low growth driven by its robust competitiveness for capital and synergies in competitiveness in overseas networks.

ASIA & PACIFIC

95

China Japan SingaporeHong Kong Philippines India Indonesia VietnamMyanmar Australia

3252522

42311

ASIA & PACIFIC

119111

U.S.A Canada Panama Brazil Chile

AMERICA

111111121

United KingdomGermany France Netherlands Czech Russia Turkey U.A.E Bahrain

EUROPE & MIDDLE EAST

AMERICA

23

Grades for credit ratings

(as of March 2014)

Korea Ratings (KR)NICE Investors ServiceKorea Investors Service(KIS)

Status of domestic credit ratings

Hana Bank AAA Hana Bank AAA Hana Bank AAA

KEB AAAKEB AAAKEB AAA

(as of March 2014)

Moody’s S&PFitch

Hana Bank A1 Hana Bank AHana Bank A-

KEB A1KEB A-KEB A-

Status of overseas credit ratings

10

New Vision and Core Values of HFG

With a rapidly changing financial environment both locally and globally, and the increasing role of the financial industry in national competitiveness, HFG has created an ambitious mission and vision together with diverse ideas from the entire Hana family. HFG has revised core values and strategy goals to crystalize the vision and values, based on which the company aims to spearhead a better future with a greater sense of worth among the Hana members.

Vision & Values

Passion RespectExcellenceWith

CustomerOpenness

THE TRUSTED PREMIER GLOBAL FINANCIAL GROUP

Digitalization

Best 2025

POWER on Integrity

GROWING TOGETHER, SHARING HAPPINESSMission

2025 Vision

2025 Strategy Goal

Core Values

Strategic Differentiation

Best BankTop earnings in

the banking sector

Expanding to Global

Globally 40%

Stable PortfolioNon-banking

30%

Trusted GroupHigher brand

reliability

Customer

Centricity

Business Model

InnovationAgility

Vision Emblem

Light blue : Reliability, trust and pioneering attitude

No.1 : Showing the will to become No.1

Earth : Symbolizing global presence

The new emblem of HFG represents the image of an exclamation mark on empathizing with the vision and admiring when the vision is achieved.

1110

Background for the Vision and Values

On its launch in 2005, HFG announced their vision for 2015 i.e the “premier financial service network”, which was well received in the banking sector. Changing financial scenarios at home and abroad leading to a ‘new normal age’ and the addition of KEB (Korean Exchange Bank) in HFG as a new family member in 2012 has led to the company requiring new roles and objectives. As a result, HFG has revised its mission, the vision for the next decade and core values to serve as a yardstick for all value judgments by having all members of HFG take part in the process throughout the past year.

Process of Setting the Vision and Values

Once deciding on creating a new vision at the 8th HFG Executive Workshop in November 2012, over 10,000 employees of HFG have been engaged in the process of establishing the same for nearly eight months until crystallizing the final vision and values in July 2013. The vision setting was carried out in a bottoms-up approach targeting all members of HFG led by a task force created after the vision launch in January 2013.

Highlights for Setting the Vision

Milestones on Setting the Vision and Values

33

No. of interviews conducted

11,365

No. of employees participat-

ing in the survey

10

No. of times the Vision Work-

shop was held

244 days

Period of setting the vision

10

No. of employees in HFG

Vision Task Force

Deciding on the creation of a vison at the 8th Executive Workshop of HFG

Nov 16, 2012

Launching HFG Vision Task Force

Jan 8, 2013

Conducting 10 Vision Workshops for employees

May 21, 2013 ~ Jun 5

Conducting the Executive Workshop

Jun 11, 2013

Holding the Vision Refining Workshop for working-level employees in relevant departments

Jun 19, 2013

Collaborating thrice with the Vision Management Committee to select the final option

Jun 26, 2013

Reporting on the final vision and values to the BoD (Board of Directors) of HFG

Jul 17, 2013

Implementing two surveys on the vison for all members of HFG

Mar 22, 2013 ~ Apr 5,

May 16 ~ Jun 7

Conducting interviews with employees across the nation

Feb 26, 2013 ~ May 9

Conducting interviews with executives and external directors of affiliates

Jan 28, 2013 ~ Feb 22


12

The New Vision of HFG

HFG’s new vision embodies a strong commitment to build a strong trust relationship with all stakeholders. HFG aims to provide financial services to customers at all times through constant communication channels and management activities to attain best results. HFG aims to achieve a world-class competitive edge by developing products and services with zeal and authenticity, with timely responses to changes in the financial climate.

HFG pursues healthy growth through its mission. This implies forming a relationship where customers, soci-ety, employees, shareholders and the company grow together as a whole, fulfilling CSR proactively through specific actions.

Under the slogan of “Joy of Customers, Only towards That Goal,” we have strived for the happiness of cus-tomers alongside sharing happiness with the underprivi-leged as well, thus practicing CSR with passion.

HFG’s New Mission

HFG’s new mission is HFG’s commitment to fulfill CSR by jumping on the bandwagon of demands to changing times. HFG pursues “healthy growth” together with the society and stakeholders instead of the growth for the sake of scales or competitions. All members will seek for happiness and generate values to be shared, thus making a cyclical structure of social contribution as well as sustainable growth, which is a rationale for a company.

Vision & Values

Seeking for values to be shared

Contributing to growth and the

society

Pursuing happiness of all members

“Sharing Happiness”

Creating a proper workplace

Fulfilling CSRSeeking healthy

growth

“Growing Together”

“Trusted”

Establishing solid trust among all stakeholders

Conducting steady communication

and management activities for best

results

Providing financial services those are of help to

customers at all times

Timely response to changing trends

Developing products and

services with zeal and authenticity

“Premier” “Global”

Maintaining a comprehensive global financial service network

Sustaining strong global competencies

Maintaining a globally competitive

corporate culture and retaining a world class

employee pool

1312

‘BEST 2025’ - The Strategy Goals to Achieve the Vision

HFG seeks to set and implement strategy goals focusing on qualitative profits instead of external growth. Four strategy goals are set i.e: ranking first in earnings in the banking sector, revenue from global business contributing to 40% of the total within HFG, revenue from the non-banking sector contributing to 30% of the total within HFG, and enhancing the company’s reliability as a financial brand. By attaining these goals, HFG will continue to grow steadily and maintain stable business operations based on solid trust with customers.

A, B, C and D - the Strategic Differentiators

HFG set its strategic differentiators, A, B, C and D after developing internal strengths to achieve the BEST 2025 strategy goals. HFG will rise higher as the “Trusted Premier Global Financial Group” through several initiatives including managing a flexible organizational system, innovating business models dramatically, focusing on financial consumers and taking the lead in speedy finance.

BEST

Best Bank

Ranking First in Earnings in the Domestic Banking Sector

· To become the leading bank in Korea and thus securing a base for stable profit· Strengthening the position as the best bank by expanding the customer base

Trusted Group

Enhancing the Reliability as a Financial Brand

· Reflecting ‘trust’, the key differentiator to the strategy goals· Improving HFG’s brand image through accumulation of trust· Being the leader in the banking industry in maintaining financial consumer rights and protection

Stable Portfolio

Growing Earnings from the Non-banking Sector to 30% of Total Revenue within HFG

· Building a stable business portfolio by increasing non-banking sector income to 30% of the total revenue · Developing genuine synergy-based total financial services

Expanding to Global

Growing Overseas Revenue to 40% of Total Revenue within HFG

· Developing the global business into one of HFG’s core growth engines and growing overseas revenue to 40% of total revenue· Cultivating the global business as an alternative to the low-growth-low-margin environment of the domestic market

Managing a Flexible Orga-nizational System amid Low Growth

· Maximizing the synergies of the Hana Network · Maximizing efficiencies in resource allocation· Making timely and prompt decisions

Agility

Securing Global Competi-tiveness by Innovating Busi-ness Models Dramatically

· Spreading the innovative mindset· Reinforcing the HR expertise· Pursuing differentiated business models

Business Model Innovation

Differentiating Customer Experiences by Focusing on Financial Consumers

· Re-analyzing and improving business models in favour of financial consumers· Seeking for stronger customer trust

Customer Centricity

Leading the Smart Finance Applications Befitting the Digital Age

· Taking the lead in the smart finance applications, utilizing smart mobile technologies· Securing new business opportunities, leveraging the digital eco-system

Digitalization


14

Vision & Values

New Core Values of HFG

Core values of HFG are precious assets for HFG that reflect Hana members’ way of thinking and a creative and robust corporate culture. With the “Power on Integrity” as a new core value, HFG is committed to making a better future based on integrity and compliance through the Passion, Openness, With Customers, Excellence and Respect.

P

RW

O

IE

POWER on IntegrityCore values of HFG serve as the yardstick for value judgment and need for action at the corporate and individual levels as it puts the top priority on customers

Integrity Integrity – as solid as a mountain

Referring to the basic ethics required from those involved in the financial sector,

fulfilling given tasks with honesty and integrity

Customers - to be served like kings

Exploring and fulfilling customer needs by putting the top priority on

customers

With Customer

Expertise – as glittering as stars

Developing diverse competencies in each sector to obtain customer trust of

the highest level

Excellence

Respect & Consideration – spontaneous and heartfelt

Referring to the basic attitude to employ individual competencies and mutual cooperation, respecting and considering the needs of others in

thought and action

Respect

Openness – as wide-open as the sky

Understanding and empathizing with people or circumstances with flexibility

and without discrimination

Openness

Passion - as strong as the sun

Seeking for better values based on changes and innovation, while doing

the utmost with accountability

Passion

1514

Yoon, Jong-NamRepresentitive Attorney,Law Firm Chung-Pyung

Kim, In-BaeProfessor, Economics,Ewha Womans University

Kim, Jung-TaiChairman & CEO, Hana Financial Group

Choi, Gyoung-GyuProfessor, Business Administration, Dongguk University

Park, Moon-KyuFormer CEO,PMK Inc.

Chung, Kwang-SuonHonorary Professor, Chung-Ang University, Chairman of BoD

Song, Ki-JinFormer CEO, Kwangju Bank

Oh, Chan-SeokExternal Director of LG Hausys

BoD of HFG

HFG operates the BoD independently and with proficiency to achieve several objectives i.e developing financial services of “Growing Together, Sharing Happiness” through the steadfast generation of values for customers, society, shareholders and employees; supporting affiliates to practice autonomous management, and seeking for healthy growth strategies, thus contributing to the development of the financial industry.

Members of BoD

As of March 2014, the BoD is composed of eight members including one from the management board and seven external directors. HFG strives to make decisions with greater objectivity and transparency by securing a majority of independent external directors whose portion exceeds the statutory portion, that is, one half of the total according to the Holding Companies Act. For the purpose of enhancing management transparency and realizing rational corporate governance, HFG has sub-committees under the BoD i.e Steering Committee of the BoD, Management Development and Compensation Committee, Risk Management Committee, Audit Committee and Auditor Nomination Committee.

Sub-Committees within BoD

Titles Purpose and Roles

Steering Committee

The committee is responsible for deliberating and deciding on matters for establishing rational corporate governance, efficient measures for operating the BoD and committees within the BoD, and matters commissioned by the BoD

Management Development and Compensation Committee

The committee is responsible for establishing measures to enhance corporate performance and take decisions on performance evalua-tion and compensation for executives in affiliate branches

Risk Management CommitteeThe committee is responsible for establishment, approval and man-agement of group-wide policies and basic management plans to meet crises that may be faced in the management process

Audit Committee

The committee is responsible for auditing business operations of directors, and requesting them to report on business activities, re-questing for the holding of ad-hoc general meetings, inspecting sub-sidiaries and handling data and information necessary for auditing.

External Director Nomination Committee

The committee is to search for, evaluate and recommend external directorial candidates qualified for the execution of HFG’s strategic objectives.

Sub-Committee Directors

Titles Name SteeringCommittee

Management Development and

Compensation Committee

Risk Management Committee

AuditCommittee

External Director Nomination Committee

Internal Directors Jung-Tai Kim ◦ ◦ ◦

External Directors

Kwang-SunChung ● ◦ ●

Gyoung-GyuChoi ◦ ● ◦ ◦

Moon-Kyu Park ◦ ◦ ◦

Chan-Seok Oh ● ◦ ◦

Jung-Nam Yoon ◦ ● ◦

Ki-Jin Song ◦ ◦ ◦

In-Bae Kim ◦ ◦ ◦

● Chairs of sub-committees ◦ Members of sub-committees

Governance


BoD Operation

HFG holds regular BoD meetings, and ad-hoc BoD meetings, if necessary. In 2013, the BoD was convened 11 times to discuss 31 key agendas i.e: incorporating subsidiaries and sub-subsidiaries of HFG’s overseas subsidiaries; approving on the business plan (tentative) of HFG for the business year of 2014; and approving on HFG’s vision and mid-and long-term business strategies. HFG and external directors have come to a proactive agreement as shown by an attendance rate of 96% for the BoD meeting.

BoD Performance Evaluation and Compensation

HFG fairly evaluates the performance of the BoD, and provides rational compensation packages to internal and external directors according to compensation standards approved at the general shareholders’ meeting. Compensation consists of reward and bonuses. The reward is decided by the Management Development and Compensation Committee, while bonuses are paid considering the performance evaluation setting and evaluation at the Management Development and Compensation Committee.

Evaluation Rating for Corporate Governance

HFG acquired the A+ rating at the ‘2013 Corporate Governance Evaluation’ organized by Korea Corporate Governance Service for having a healthy corporate governance structure which recognizes and appreciates self-sufficiency and expertise. The BoD of HFG will do the utmost to achieve healthy finance, maximizing the shareholder value, fulfilling CSR and enabling seamless communication with stakeholders.

Shareholder Status

The total number of stocks issued by HFG is 289,894,062 as of December 31, 2013, and the biggest shareholder is the National Pension Service that owns 9.95% of the total stocks. HFG ensures that the right to make decisions is exercised in writing to pro-tect shareholder rights. For seamless communication with shareholders, HFG operates a unit to assist the BoD for stakeholders to freely propose their ideas to the chair of the BoD and directors via letter or email.

Status of Large Shareholders

HFG’s Evaluation Rating for Corporate GovernanceKorea Corporate Governance Service

BoD communication channels Management Support Team of Hana Financial Group Inc. 55 Euljiro, Jung-gu, Seoul / E-mail: [email protected]

28,839,2379.95%

14,731,8185.08%

14,054,0804.85%

7,289,5452.51%

6,816,2052.35%

1. National Pension Service of Korea

2. BLACKROCK (As of the disclosures on Nov 1, 2013)

3. The Capital Group (As of the disclosures on Oct 30, 2013)

4. Saudi Arabian Monetary Agency

5. The Government of Singapore

2011 2012 2013 A+

Governance

16

Customer-centered Business Unit (BU) Service

Financial products are growing more specialized, while customer demands change faster than the changes in the financial sector. Demand in the financial sector is rising for complete asset management services and hybrid financial products. Not just households but corporate customers as well demand one-stop financial services ranging from loans, bonds, stocks, derivatives, M&A and overseas advancement. HFG’s organizational reshuffle took place in March 2008 into “Business Units”, offering optimal products and services for various needs of customers.HFG conducts joint marketing as a single Hana brand instead of individual affiliates. One-stop services are offered to customers through a single point of contact by developing optimal products to befit diverse needs.

Major Business Fields

Business Model

Banking Service

Financial Business Credit Card Business Loan Business

Real Estate Trust

Savings Bank Business

Life Insurance

1716

Banking Service

Hana Bank and Korea Exchange Bank are mainly involved in foreign exchange business including domestic and foreign exchanges centering around a bank’s traditional services of deposits & loans, payment guarantees, issuance of securities and investments. They also cover wide-ranging auxiliary operations prescribed by the Banking Act including the collection of national revenues and separate safekeeping, trust operations and credit card transactions.

Financial Business

HFG contributes to efficient allocation of capital by providing diverse solutions to the capital demand side for financing, and providing attractive opportunities to investors. Business operations are classi-fied according to the Financial Investment Services and Capital Market Act into investment trading, investment brokerage, collective investment, investment advisory services, investment discretionary services and trust business.

Credit Card Business

HFG issues credit cards to eligible subscribers, and generates the added value including commission fees in exchange for extending credit to member stores and subscribers after signing contracts with member stores that sell products and services of HFG.

Loan Business HFG’s loan business is four-fold i.e credit cards, installment financing, facility rental and new technology financing. HFG’s main loan business involves financing through the bond issuance.

Real Estate Trust HFG expands its functions to offer products for WM/PB through stronger cross-affiliate business operations, and continues to reinforce wide-ranging synergies by providing solutions for the develop-ment of real estate held by customers.

Savings Bank Business

Driven by high credit capacity and sufficient capital strength, HFG enhances financial conveniences for small enterprises and the financially vulnerable with low collateral capacities and credit potential.

Life Insurance HFG is attaining quantitative and qualitative growth as a comprehensive life insurance provider by offering optimal products and services catering to customer needs.


HFG’s retail banking sector is a comprehensive banking business division encompassing Hana Bank, KEB, Hana SK Card, Hana Life, Hana Capital and Hana Savings Bank as one company. The aim is to provide more convenient and useful banking services to a wide span of retail customers including household customers, SOHO operators and SMEs.

Retail Banking

HFG’s corporate banking sector is driven by Korea’s leading specialized database on corporate development, multi-faceted net-works and passion of individual members. HFG manages the Banking Division, branch-es and project teams consisting of multi-dis-ciplinary experts. They are operated through customized systems for sustainable growth and stability.

Corporate Banking

HFG’s asset management sector is consisting of the marketing unit of Hana Daetoo Securi-ties. The company converted into a securities company after starting off as the first invest-ment trust company in Korea, and the Wealth Management and corporate business division of Hana Bank. It has since been ranked first in the domestic asset management market.

Asset Management

The Corporate Center serves as HFG’s con-trol tower supervising its management strat-egies, PR and IR.

Corporate Center

HFG’s Organization Chart by BU

Hana SK Card Hana Asset Trust KEB Futures

Hana Capital Hana Asset Management KEB Investor Services

Hana Life KEB F&I Inc. Hana Asia Limited

Hana Savings BankHana Global Investment

Consulting., Ltd.

Hana Bank Hana Institute of Finance

KEB


Hana I&S

Overseas affiliate

Target Customers

· Household HNW / Mass / Affluent· SOHO / SMEs

· Corporate customers · U+HNW· Institutional investors including pension funds

· Strategies· Finance · IR· Risk management · HR· Communication · Resources management · IT· Compliance· Global strategies

Channels

· Bank / Card Branches· Online banking· Call Center· PB (Private Banker)· RM (Relationship Manager)

· Bank Branches· IB (Investment Banker)· RM (Relationship Manager)

· Securities Branches· WM (Wealth Manager)

Functions

Retail Banking Corporate CenterAsset Management

Business Model

Corporate Banking

18

Distribution of HFG’s Economic Value in 2013

Type Content Amount

Employees Wage & Retirement wage 1,716.4

Government Corporate tax, taxes and dues 1,394.6

Partner companies Cost of suppliers 1,514.6

Community Social contribution activities 71.5

CSR Microcredit including the New Hope Seed Loan 622.1

Unit: KRW billion

Management Performance

Amid the gamut of economic uncertainties in 2013, the financial industry underwent challenges due to the steady interest rate, stronger regulations in the financial industry and downturns in the real estate and stock market. Against this backdrop, HFG paved the way for generating synergies turning KEB into a 100% affiliate through a stock exchange. HFG firmed its presence as Korea’s leading financial group by attaining an asset scale of approximately KRW 368.5 trillion (including trusts). In 2013, HFG achieved a consolidated net income of KRW 993 billion. The return on equity (ROE) and return on assets (ROA) amounted to 0.34% and 5.16%, respectively. Asset soundness dropped slightly amid economic slowdown and real estate downturn. The NPL ratio reached 1.48%, up 0.14% p compared to 2012, while the NPL coverage ratio recorded 121.2%, down 21% p year-on-year. However, the NPL coverage ratio was maintained at as high as 120%, while the delinquency rate stood at 0.58%, up 0.19% p from 2012. These manifest HFG’s asset soundness at a high level. The BIS ratio of HFG was 12.28% according to Basel III, and it was 9.24% based on Tier 1. The capital adequacy rate of HFG and affiliates seem stable where the level exceeds the regulatory rate of the oversight agencies.

Distribution of the Performance Generated

HFG seeks for “healthy growth” where a balance is achieved between growth and CSR. HFG is committed to fulfilling given roles as it has been, sharing profits with all stakeholders and striving for happiness of members of the society through the values generated and shared through finance.

Summary of Financial Performance of HFG in 2013

● Business Volume

● Total assets

● Total sales

Unit : KRW billion

2011

2013

2012

218.6 143.6

349.0 233.2

368.5 252.1

2011

2013

2012

● Profitability

● ROA

● ROE

Unit : %

0.76 9.12

0.60 10.56

0.34 5.16

2011

2013

2012

● Asset Soundness

● NPL ratio

● Delinquency rate

Unit : %

1.12 0.63

1.34 0.77

1.48 0.58

9,930Consolidated net income

Unit: KRW 100 million

368.5Total assets

Unit: KRW trillion

The Economic Value Generated and Distributed

(including trusts)


HFG’s Stakeholder Communication

HFG runs diverse stakeholder communication chan-nels to listen to the changing voices of stakeholders and relate them to management activities. HFG’s management strategies, activities and performanc-es are disclosed with transparency to stakeholders through their website, business reports and disclo-sure. HFG continues to communicate extensively with stakeholders by holding shareholders’ meetings, pre-senting details on management performances, oper-ating a CSR website and managing the foundation.

HFG’s Operation of Communication Channels

HFG runs SNS channels including Facebook and blogs to communicate with more stakeholders.

Website : www.hanafn.comNewsletter: sabo.hanafn.comFacebook: www.facebook.com/hanafnHana N Smart Blog: blog.hanabank.com

Stakeholder Engagement

Gathering and Reflecting Feedback from Stakeholders

HFG conducted a survey and identified critical issues according to each group of stakeholders to attain continued sustainability. The ‘2013 HFG Stakeholder Survey on Sustainability’ was conducted for three weeks by customers, shareholders, employees, partner companies, NGOs, academic research institutes and research companies. The survey consisting of 30 sustainability issues was conducted to identify HFG’s sustainability level and resolve core issues.

Partner Companies · Meetings with partner companies · Website · Surveys

Community· CSR website · Foundation website · CSR activities · Sports & Cultural activities

Employees · Employee portal· Labor-Management Council · Dialogues with top management

Shareholders and Investors· Business reports· General shareholders’ meeting· Presentation on management performance · Corporate & Management disclosure

Customers · Website· Customer Center · Customer Satisfaction Survey· SNS

Strategies for Sustainability · Fair distribution of the economic performance· Development of customized products and services· Sound corporate governance· Integrated risk management· Legal & ethical compliance

· Advancing into the global financial market· Reinforcement of market dominance through higher management revenues and innovation· Disclosure of the compensation of BoD and executives · Strategic brand management · Facilitation of online finance

Customer Satisfaction・Social Contribution・Mutual Growth

· Protection of financial consumer information· Improving customer satisfaction levels· Scale-up of accessibility to financial services· Availability of proper marketing information· Availability of services for secure financial transactions

· Efforts to prevent money laundering and eradicate unfair trading· Expansion of community support· Social contribution by leveraging features of the financial industry· Investment focused on human rights and labor practices· Expansion of SME financial support

Employees & Environment · Formation of a corporate culture of work-life balance· Establishing a stable working culture · Attraction of core talents and scale-up of employee competencies· No discrimination and providing fair opportunities · Higher trust and cooperation among the labor and management

· Fair performance evaluation and compensation· Reinforcement of the environment management system specialized in financial services· Increase in the expenses for environmental protection and investment· Establishment of a system for environment performance management· Development of products for climate change response and green culture promotion

Areas Issues Covered

Sustainability Issues

20


Procedure for Materiality Analysis

HFG conducted materiality analysis to select key issues to be included in the 2013 Sustainability Report. A total of 30 issue pools were formed through the international standard analysis, benchmarking of competent companies in sustainability within the industry, media research and the analysis of internal documents. Key issues were selected through the stakeholder survey.

Materiality Analysis Process

Materiality Analysis Results

Key sustainability issues of HFG devised through materiality analysis were reported in details by category of HFG’s management slogan and mission: “Healthy Finance, Happy Together”, “Growing Together, Sharing Happiness” and “The Trusted Premier Global Financial Group.”

Key sustainability issues of HFG in 2013

Priority 3 Priority 2 Priority 1

Interest level of external stakeholders

Interest level of internal stakeholders

· Fair distribution of the economic performance· Sound corporate governance· Disclosure of the compensation of BoD and executives· Scale-up of accessibility to financial services

· Development of customized products and services· Availability of services for secure financial transactions· Social contribution by leveraging features of the financial industry

· Legal & ethical compliance· Advancement into global financial market· Protection of financial consumer information

· Efforts to prevent money laundering and eradicate unfair trading· Expansion of community support· Expansion of SME financial support· Development of products for climate change response and green culture promotion

· Integrated risk management· Reinforcement of the environment management system specialized in financial services· Facilitation of online finance· Reinforcement of customer satisfaction

· Attraction of core talents and scale-up of employee competencies· Formation of a corporate culture of work-life balance· Strategic brand management

· Investment focused on human rights and labor practices· Establishment of a system for environment performance management· Increase in the expenses for environmental protection and investment

· No discrimination and fair opportunities· Establishment of a stable employment environment· Higher trust and cooperation among the labor and management

· Fair performance evaluation and compensation· Availability of proper marketing information· Reinforcement of market dominance through higher management revenues and innovation

International standards, benchmarking, media analysis,

internal document analysis

Step. 1Configuration of key issue pools

for HFG’s sustainability

Internal review in HFG (Communication Team)

Step. 2Selection of key issues for HFG’s sustainability

Stakeholder Survey

Step. 3Review and evaluation on the

level of interest by issue


Step. 4Identification and

prioritization of key issues


Operation of the Committee for Sharing Happiness

HFG launched the Happiness Sharing Promotion Committee to identify CSR issues in depth and strengthen the capacity of “Healthy Finance, Happy Together.” HFG conducted the first meeting of the committee on April 22, 2013. The committee chaired by the chairman of HFG also includes heads of each BU, executives in charge of social contribution in HFG and executives overseeing consumer protection.The committee practices CSR activities in a preemptive and strategic manner.

System of the Committee for Sharing Happiness

For efficient functioning of the committee, HFG launched the Happiness Sharing Promotion Committee for each BU, and carries out social contribution befitting it. The Committee for Sharing Happiness is operated to formulate directions and policies for CSR and the promotion committee in turn sets actions plans for each BU. Regular review meetings are conducted for seamless communication between the Committee for Sharing Happiness and the Happiness Sharing Promotion Committee. Each BU launched a promotion unit to initiate microcredit, support for SMEs/Youth start-ups, consumer protection and social contribution.

HFG’s Committee for Sharing Happiness

HFG’s CSR Actions in 2013

HFG has unfolded multifaceted endeavors to practice CSR since the launch of the Committee for Sharing Happiness.HFG strived to provide trustworthy finance plans to consumers in order to respond to the crisis of lower reliability to finance. To this end, HFG launched the Financial Consumer Protection Division for the first time in the banking sector, and announced the Charter for the Protection of Financial Consumer Rights. As a result, in May 2014, the consumer protection system was jointly established in HFG, thus raising efficiency in consumer protection and management among affiliates of HFG.

Launch of the Committee for Sharing HappinessOpening of the Financial Consumer Protection Division

April 2013

Hana BankDeclaration of the Charter for the Protec-tion of Financial Consumer Rights KEB Launched the Customer Information Pro-tection Center as an independent unit

July 2013

Launch and expansion of a Consumer Protection Unit

September 2013

review meetings

The Committee for Sharing Happiness

Chairman of HFG

Head of Each BU

Happiness Sharing Promotion Committee for Corporate BU

Head of Corporate BU

Happiness Sharing Promotion Committee for Asset Management BU

Head of Asset Management BU

Happiness Sharing Promotion Committee for Each BU

Microcredit Promotion Unit

Promotion Unit for SMEs/Youth Start-ups

Promotion Unit for Consumer Protection

Promotion Unit for Social Contribution

Microcredit Promotion Unit

Promotion Unit for SMEs/Youth Start-ups





SPECIAL

STORY I

22

Performance and Future Plans of the Committee for Sharing Happiness

The Committee for Sharing Happinesshas initiated sector-specific business plans to fulfill CSR in four major areas i.e microcredit, sup-port for SMEs/Youth Start-ups, consumer protection and social contribution. HFG strives to attain goals for each business and achieve healthy finance through systematic planning and efficient execution.

Easing the financial burden for the financially vulnerable and intensify-ing measures for stable housing

Launching new microcredit products

· September 30, 2013 Launching “Housing Lease of Dreams without Seed Money”, a product of banks that have exclusive contracts with the National Housing Fund· October 7, 2013 Launching “Hana-KEB Monthly Mortgage Loan” for housing stability for the financially vulnerable

Guaranteeing a com-fortable and vibrant post-retirement life

Extending one-stop ser-vices for senior customers

· Operating the Hana Happiness Design Center to enable a happy post-retirement life· Launching the “Happi-nior” Development Council for Full Services & Products · Plans to develop appropriate services continuously

Microcredit Services Facilitating the Hope Financial Plaza

· October 2013, Additional launch of four exclusive windows of service · November 2013, Additional launch of five key branches

Establishing the Hopeful Ladder for SME Growth and reinforcing their export competitiveness

Support for the Hopeful Ladder for SME/ME Growth

· Consulting on overseas advancement· Setting up the Korean Desk at Hana Bank China and providing consulting services· Planning to continuously operate and expand the program

Support for R&D and Creative SMEs

Support for SMEs compe-tent in R&D

· Extension of loans for technology-based start-ups· Selection of and support for competent Korean SMEs in IT that are in collaboration with HFG · Plans to expand the selection of and support for target companies

Formation of a Culture for Mutual Growth

Review and Resolve SMEs’ Complaints

· Conducting 8 meetings with CEOs of 335 SMEs from 2012 to 2013 (4 times for Hana Bank and 4 times for KEB)

Protection of Financial Consumers

Healthy Finance, Financial Check-up Day

· Conducting it every month starting from May 2013· Conducting self-diagnosis at the beginning of each month, and designating every third Tuesday of the month as the Financial Check-up Day

Establishing a Customer Protection-centered Corporate Culture

Prescribing and announcing the Charter for the Protec-tion of Financial Consumers

· Prescribing the Charter for the Protection of Financial Consumers and completing the announcement ceremony (Hana Bank, KEB, Hana Daetoo Securities, Hana SK Card, Hana Savings Bank)· Checking the “self-diagnosis for the protection of financial consumers” at the beginning of every month

Institutional Enhance-ment and Reduction of Complaints

Jointly setting up a group of “Consumer Protection System”

· Completing the development in May 2014· Continuously proceeding with efficient management through the integration of consumer protection-related functions, e.g. VOC

Healthy Society Expansion of community-fo-cused volunteering

· Realigning volunteering corps (Hana Love Volunteer Corps, Hana Smile Hope Volunteer Corps, KEB Love Sharing Volunteer Corps, HFG Family Love Volunteer Corps)· Facilitating regional division-specific volunteering activities

Happy Neighbors Support for the socially vulnerable and multi-cultural families

· Extending support for the socially vulnerable on a regular basis through the “Happy Box” and “Food Sharing”, etc. · Supporting the growth of children from multicultural families through programs such as “Kids of Asia”, extending financial training for immigrant women, organizing the award ceremony for multicultural families and offering scholarships to married immigrant women

Training for the Future

Extending financial training for youths and also for the socially vulnerable at home and abroad

· Conducting financial training for primary and secondary educational institutions, opening work experience classes in branches, organizing children’s musicals on economics, and operating scholarship programs at home and abroad · Sponsoring “Teach for Korea” (an organization to assist learning for children from socially vulnerable households in Korea)· Establishing the “HFG-Eom Hong Gil Human Foundation & Human School” in a remote village in Nepal

Support for SMEs/Youth Start-ups

Consumer Protection

Social Contribution

Microcredit

Topics Flagship activities Activities and future plans


Disclosure on MAnAgeMent ApproAch

HFG’s trusted premier global competitiveness is formed through teamwork in HFG beyond cross-division and cross-affiliate interests. HFG aims to grow into a global financial group with global compet-itiveness, based on the culture of openness, mutual understanding and consideration.

Trusted financial group l

Premier financial group l

Global financial group l

Establishing ties of robust trust with all stake -holdersEnabling genuine product development and service offeringEstablishing the company as a prestigious global financial group and establishing it’s business presence through proactive over-seas advancement

Type Area Major reporting items

Trusted Finance

• Integrity• Risk Management• Financial Consumer Protection

• Code of ethics• Transparency in accounting • Risk management system • Charter for the Protection of Financial Consumers’ Rights

Premier Finance

• Products and Services• Smart Finance• Customer-Oriented Management

• Differentiated products and services • Mobile finance • Model for service quality • Customer engagement

Global Finance

• Global Network Expansion• Global Cooperation• Global No.1 Hana Financial Group

• Status of the global network expansion • Records of MOUs and agreements signed in 2013• Records of major international awards in 2013

MANAGEMENT PRINCIPLES 2013 REPORTED ITEMS

01

The Trusted Premier

Global Financial Group

Building Trust, Creating New Values

NUMBER OF HFG’S ACTIvITIES TO PROvIDE INFORMATION (18 times in Korea, 10 times abroad / as of 2013)

STATUS OF GLOBAL NETwORKS (As of May 2014)

24 networks in128 countries 28 times

HFG does the utmost to provide customer friendly products and services, and a better working environment

to employees. Moreover, steadfast communication and consistent proactive management procedures help to

forge robust ties of trust, and cooperation with communities which drive them to help in growing HFG into a

financial institution that stands with neighbors.

Building Trust, Creating New ValuesBuilding Trust, Creating New Values

26

Ethical Management

Ethical Management of HFG

Ethical management is the highest virtue for employees at HFG to gain trust and love from cus-tomers, and also the sustaining value for actions. The trust in the financial industry begins from ethical management. HFG will achieve healthy growth based on strong morality and transparent management.

HFG’s Ethical Management Principles

Chapter 1 General Provisions

1. Basic Principles

· Putting the top priority on customer

satisfaction

· Enhancing ethical awareness

· Focusing on customer satisfaction

· Fulfilling social responsibilities

· Maximizing the shareholder value

2. Target of Application and Interpretation

Chapter 2 Obligations for Customers

3. Honesty and Fairness

4. Asset Management

5. Important Reminders in Business

Operations

Chapter 3 Obligations of Employees

6. Focus on Work

7. Sound Leisure Activities and Modest Lifestyle

8. Prohibition of Making Unreasonable Orders

9. Reporting on Violations and Protecting Employees

that Report/Whistle-blow

10. Protecting Internal Information and Prohibition

Insider Trading

11. Prohibiting Conflicts of Mutual Interest

12. External Activities

13. Limiting Political Activities and Donation

14. Restricting Gift Exchanges

15. Administering Fees

16. Preventing Money Laundering

17. Personal Cash Loans, etc

18. Conducting Mutual Trust

19. Ensuring Transparency in Transaction Relationships

20. Prohibiting Sexual Harassment

21. Ensuring Fair Competitions

22. Forging Cooperation among Members of the Group

Chapter 4 Obligations for Employees

23. Respecting Individual Creativity

24. Protecting Employees’ Information

25. Prohibiting Discrimination and Compensation

Based on Performance and Capabilities

26. Providing Opportunities for Education and

Training

Chapter 5 Obligations for the Society

27. Exemplary Corporate Activities

28. Roles as a Social Member

29. Obligations as a Social Member

Chapter 6 Obligations for the Company and

Shareholders

30. Conservation of Corporate Assets

31. Recording and Management of

the Company

HFG’s Code of Ethics

HFG will grow into a premier financial group of the 21st century by seeking for ethical and creative sustainability. To this end, HFG prescribed values and ethical standards to be pursued and a code of ethics to be practiced in employees’ daily operations. The code of ethics contains 31 articles in 6 chapters including the general provisions, and is classified into responsibilities for customers, employees, society, companies and shareholders.

Details on the code of ethics of HFG are available on HFG’s website.

www.hanafn.com/info/aboutus/ethics.do

Ethical management of HFG implies that employees of HFG are to fulfill given roles with honesty and integrity and practice transparent management based on due ethics to be acted out in the financial industry.

Principles

Honesty Integrity Transparency

Milestones of HFG's Code of Ethics

1991

2001

2002

2009

The code of ethics and the action guideline for employees

Hana Bank's action guideline

The Code of Ethics for Hana people

HFG's Code of Ethics

HFG’s Code of Ethics

2013 HANA FINANCIAL GROUP SUSTAINABILITY REPORT2726

Ethical Management Programs

HFG operates a variety of action programs to practice ethical management including the prevention of irregularities and corruption i.e employee training, a system to prevent money laundering and a system to report securities accounts and transaction records.

HFG’s Major Action Programs for Ethical Management

Status of training on ethical management in 2013

• KEB

Programs Content

Sending the Compliance LetterSending a Compliance Letter formulated by compliance officers on ethical management to all employees

Events to Reaffirm Commitment for Ethics & Compliance

Reaffirming the ethical awareness of all employees and reviewing their willingness to practice the code of ethics on the first business day of each year

Compliance CSAEnhancing the awareness of ethics & compliance through self-diagnosis of legal compliance on the first business day of each year

Publication of the Guidebook on Ethics & Compliance

Containing the Code of Ethics compliance targets and major regulations

Cyber Training on Ethics & Compliance

Enhancing the ethical awareness for all employees once a year

• Hana Bank

Programs Content

Group Training on Ethics & Job Compliance

Training on ethics and job compliance for new employees, employees returning after long leave, employees who were promoted, and compliance officers

Cyber Training on Ethics & Compliance

Cyber training on ethics & compliance for all employees, and reflecting the participation level in the management evaluation

Contest on Ethical Decision- Making Cases

Providing opportunities to study abroad for winners of the Contest on Ethical Decision-Making Cases

Self-Diagnosis on Ethics & Compliance

Preventing tangible and intangible losses for Hana Bank and employees and reducing their risk burden

Posting Pop-ups on Ethical Management

Encouraging employees to practice ethical management and raising the awareness of legal compliance

Newsletter on Ethics & Compliance

Making a newsletter on major issues of Hana Bank, posting it on the Hana portal and utilizing it as training materials

10,726.5 hours

(1.5 hours for 7,151 personnel)

Ethical training

• KEB

6,222 hours

(3 hours for 2,074 personnel)

Group training on ethical compliance

5,328 hours

(8 hours for 666 personnel)

Group training on internal control

17,296 hours

(2 hours for 8,648 personnel)

Cyber training on ethical compliance and money

laundering

• Hana Bank

HFG’s Major Ethical Management Activities

System of Reporting Securities Accounts and Transaction Records

Protecting customers and employees by complying with laws on securities transactions and maintaining sound practices in asset and loan management

Anti-Money Laundering

Having a Code of Ethics indicating prohibition against direct and indirect inte r vent ion in employees’ money laundering to establ ish transparent financial transaction practices

Whistleblowing of Employees and Protection of Whistleblowers

Pract ic ing eth ica l management by managing the whistleblowing system on v io lat ions and unfair acts of em ployees, etc

Trusted Hana Financial Group • Ethical Management

Risk Management


The Trusted Premier


28

Presenting Information to Investors

HFG provides reliable financial information through quarterly presentations on performance and Non-Deal Roadshows (NDR), besides providing financial information through disclosed data which is mandated to be provided. Consequently, HFG contributes to rational decision-making of various stakeholders including investors.

Improving Transparency in Accounting

HFG carries out diverse programs to enhance transparency in accounting. As a major economic player in Korea, HFG offers reliable accounting information to stakeholders to boost transparency in accounting, and caters to the demand for higher transparency in the society.

Programs to Enhance Transparency in Accounting

Presenting information to investors

Providing financial informa-tion at Non Deal Roadshows (NDR)

Investment in Financial Information Systems

Establishing efficient infra-structure through continuous investment in accounting information systems

Specialized Unit on Accounting and Internal Control

Strengthening competencies by cultivating and training talents with expertise

Stringent Internal Accounting Management

Securing reliability in financial statements by operating the internal accounting manage ment system and the internal control council

28 times totally

No. of times information was provided in 2013

18 times in Korea, 10 times abroad

Stringent Internal Accounting Management

HFG operates the internal accounting management system according to the Act on External Audit of Stock Companies. HFG stringently operates the internal control council, securing reliability in financial statements.

Major Tasks of the Internal Control Council

HFG’s internal control policies and standards

HFG’s internal control-related tasks and measures

HFG’s internal control-related cooperation

The mutual cooperation of the Audit Division and

Compliance Division

Ethical Management

HFG’s activities in providing information in 2013

· Quarterly performance : February, April· Non-Deal Roadshows (NDR): February, March, May· Conferences: March, April, May, June

1st half

· Quarterly performance: July, October· Non-Deal Roadshows (NDR): July, August, September, October, December· Conferences: September, November

2nd half

KEB futures won the Grand Prize of the 2012 Com-pliance Awards for Securities and Futures Companies at Korea Exchange for having contributed to steadily establishing a fair transaction order.

Hana Bank won the presidential commendation for anti-money laundering from the Financial Services Commission for proactive and continuous efforts to-wards managing risks in money laundering.


Specialized Unit on Accounting and Internal Control

HFG’s accounting & internal control unit is equipped with a specialized workforce and reinforces competencies through continuous training.

Work scope of specialized workforce

Investment in Financial Information Systems

In order to generate accurate financial information, HFG steadily invests in information systems for generating financial information. Seeking to fulfill regulatory requirements according to the timeframe of the Financial Supervisory Service adopting Basel II for bank holding companies, and enhancing the BIS ratio in HFG, HFG organized the Kick-Off Workshop for establishing the Basel II system on April 29, 2013. Directions and content were shared on developing HFG’s uniform credit evaluation model and establishing risk-specific measurement systems.

Korean attorneys, U.S. attorneys:Legal affairs & compliance monitoring

Korean CPAs, U.S. CPAs, Tax attorneysAccounting settlement

HFG’s major training and education activities on accounting in 2013

Topics Content Date

Training on IFRS Update Training on revisions in IFRS 10 and 12March, February 2013

Accounting for PPA as a result of Hana Life’s incorporation into HFG

Training on accounting for business consolidation as a result of Hana Life’s incorporation into HFG

July 2013

Training on Accounting Updates Training on revisions for methods of calculating dividend reve-nues according to IFRS 9 and the Korean Commercial Act

July 2013

Accounting for PPA as a result of Hana Bancorp, Inc.’s incorporation into HFG

Training on accounting for business consolidation as a result of Hana Bancorp, Inc.’s incorporation into HFG

October 2013

This excludes specialists who do not belong to accounting & internal control units

Status of specialists on accounting in HFG’s affiliates

AffiliatesTotal No.

of workforce Korean

attorneys U.S. attorneys Korean CPAs U.S. CPAs Tax attorneys

Hana Financial Group 6 1 5

Hana Bank 17 5 1 7 3 1

KEB 9 3 4 1 1

Hana Daetoo Securi-ties

9 6 1 1 1

Hana SK Card 6 2 1 1 2

Hana Capital 3 1 2

6 times

Training on accounting in affiliates of HFG, and the

No. of times it was held

Hana Bank

2 times

KEB

Establishing a single credit evaluation model

(corporate credit evaluation model/retail credit

evaluation model) of HFG

Establishing the internal ratings-based bylaws on credit risks in Basel II (including standard

methods)

Establishing the internal model on market risks in Basel II (including the

standard model)

Establishing the measurement model on

operational risks in Basel II (basic/standard/advanced

measurement method)

Kick-off Workshop on Basel II System Setup


Risk Management


The Trusted Premier


30

Risk Governance

Since HFG believes that “risk management” is of prime importance in the financial industry, it operates integrated functions in the Corporate Center to enable preemptive awareness and response in any crises. Moreover, the Risk Management Committee under the umbrella of the BoD, is responsible for establishment, approval and management of policy and basic management plans for crises that can be faced in management activities. The Risk Management Executive Committee takes responsibility in actively discussing risk-specific agendas of affiliates and measures for control, thus operating a robust governance scheme for seamless communication with affiliates.

Risk Management System

HFG established an enterprise-wide risk management system for consistent risk management. With the Risk Management Committee at the center, the Risk Management Executive Committee, and the Risk Management Committee & Council of Affiliates effectively manages major risks of the holding company through regular meetings and exchanges.

Risk Management Process

HFG makes systematic responses to diverse risks by classifying, measuring and monitoring wide-ranging risks that might occur, and by operating the reporting process. HFG secures prompt risk responsiveness against market changes by managing key management industries based on channels to share risk-related information within HFG.

HFG’s Risk Management System

7 times

Risk Management Committee meetings

Risk Management

Holding company

Affiliates

Setting and regularly reviewing risk management policies

Sharing pending issues on risks, and complying with risk manage-

ment policies

Risk Management Committee

HFG’s risk management process

In order to remind employees of the importance of risk management, HFG enforces countermea-sures for cases on major losses by publishing a book on the group-wide losses. HFG also holds regular training on cases that are widespread failures.

Risk classification

Classification and differentiation of

financial risks and non-financial risks

Risk Measurement

Quantification of risks based on the credit evaluation model

Risk Monitoring

Regular review of risks might occur

Provision of reports on complying with,

responding to and handling risk

management policies across the group

Risk Reporting

Structure of the Risk Management System

Holding Company Chairman

Group BoDResponsible for risk manage-

ment of HFG

Head of the Risk Management Committee

Risk Management Committee Planning on, approving and managing policies

for basic risk management

HFG’s CRO

Risk Management Executive Committee

Overseeing risk management functions across the group

HFG's Affiliates’ CROs

Risk-related Committee/Council

Complying with and manag-ing the execution of the risk

management policies across the group

Holding Company’s Risk Management Team

Establishing, regularly reviewing and improving the risk

management policies & control structure in the group

94.4 %

Attendance Rate of the External Executive Directors

in Risk Management Committee


Key Areas under Risk Management

Given the features of the financial industry, HFG designates credit risks, market risks, liquidity risks and operational risks as major risks, and manages them accordingly. Risks that might occur in management activities are prevented through preemptive responses in major risk management areas, thus paving the way for stable growth.

Risk management activities by sector

KEB’s risk management unit

HFG’s Risk Management Performance in 2013

HFG’s major initiatives for risk management in 2013 were: “intensifying responsiveness against crises”, “intensive management of weaknesses resulting from market uncertainties” and “initiation of the Basel III project.” HFG effectively manages risks based on the integrated risk management system and process. Risks were minimized through systematic analysis on Basel III which took off in December 2013.

Major Initiatives for Risk Management in 2014

HFG’s goal is to maintain top-notch capital adequacy in the financial sector. To this end, HFG will strengthen systematic and structural responsiveness against extended risk situations that may occur at any time amid external uncertainties and the ongoing economic downturn. HFG will intensively focus on weaknesses resulting from market volatilities e.g. low growth and no easing of overseas risk factors, while successfully completing the project of adopting Basel III at the group level, thus making preemptive responses to changes in the regulatory environment.

Initiatives for Risk Management in 2014

HFG’s Risk Management

Sectors

Plan for reaction

Credit Risks Risk Reporting Risk Monitoring Market Risks

R i s k s f o r l o s s e s t h a t might occur due to the negligence of contractual duties by the counterparty

Actions against risks for losses that might occur due to inappropriate man-agement of HR, operations and systems and external events

Risks for losses that might occur due to interest rate-type assets, maturity of debts and inconsistencies in the interest rate struc-ture

Risks for losses that might occur to assets under management due to mar-ket price fluctuations in-cluding interest rate, stock price and exchange rate

· Setting up a credit rating evaluation system· Independent risk management unit · Early warning system

· Regular measurement of the risk quantity· Setting of operational risk limit· Monitoring of observance of limit

· Preemptive recognition of liquidity crises · Setting up early warning systems against liquidity risk · Liquidity stress simulation

· Regular monitoring of risk volume· Setting of the market risk limit · Monitoring of observance of limit

Hana Bank’s risk management unit

Preemptive and prior risk management

General Risk Management Department

Credit Risk Management Department

Credit Review Department

Risk Management Group

Risk measurement and control operations

General Risk Management Department

Credit Risk Department

Loan Review Department

Financial System Division

Risk Management Group

Improving loan portfolios Strengthening preemptive

risk management

Implementing systems for efficient capital

management

Initiating the IT system for a single credit evaluation

model of the group

Grand Prize in Risk Management

KEB won the Grand Prize in risk managementin the 2013 Aju News's Securities Award thanks to its operation of an ef f icient risk management unit and a meticulous risk man-agement system.


Risk Management


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32

Intensifying Consumer Protection

HFG strives to intensify the protection of financial consumers in the group level. For the first time in the financial sector, HFG appointed executives in charge as the top managers for consumer rights protection. HFG also launched a consumer protection promotion unit in the “Committee for Shar-ing Happiness” launched in 2013, seeking to implement socially responsible management. It was also decided to expand the “Healthy Financial Check-up Day” to all affiliates of HFG, which was first implemented in Hana Daetoo Securities in March. HFG also ensured that feasible consumer protection policies could be implemented on customer contact points by reflecting consumer pro-tection-related matters in the executive evaluation starting from 2013.

Key Tasks of the Internal Control Council

A special lecture on “tasks of a financial company to empower the rights of financial consumers”

Hana Bank’s declaration ceremony for the Charter for the Pro-tection of Financial Consumers’ Rights

Hana SK Card’s declaration ceremony for the Charter for the Protection of Financial Consumers’ Rights

Declaration of the Charter for the Protection of Financial Consumers’ Rights

Hana Bank and KEB shared consumer protection policies of HFG as well as consumer protection as a new paradigm in the financial environment, by declaring the “Charter for the Protection of Financial Consumers’ Rights” in July and September 2013. HFG will continue to make improve-ments in the level of consumer protection.

Ensuring that all branches conduct total sales reviews

on their own

Sharing and spreading ex-cellent cases for customer

satisfaction

Devising progressive measures on major issues for consumer protection

Strengthening the culture to protect financial con-

sumers

Financial ConsumerProtection

Employees at KEB aim to protect the rights of financial consumers by providing customer-centered services based on a strong ethical mindset and morality, and realize the values of mutual growth, thus declaring the code of actions and pledging to practice them as follows:

01. To provide appropriate and beneficial financial product and service information with integrity to financial consumers to help them make reasonable judgment and decisions

02. To handle tasks fairly and reasonably to protect the assets of financial consumers

03. To pledge to protect valuable assets of financial consumers seamlessly and manage them legitimately

04. To strive to cherish all opinions of financial consumers and solve grievances promptly

05. To take a deep interest in the socially vulnerable through diverse social contribution activities and fulfill economic and ethical responsibilities as an advocate for warm-hearted financial services

All employees at Hana Bank recognize that the protection of financial consumers’ rights is the basis for sustainable growth. They vow to act out the following to gain further trust from financial consumers by providing best products and services that satisfy them:

To provide accurate and true information for financial consumers to select appropriate products and services

To ensure there is no occurrence of no unsound business practices or irrational discriminatory acts occur which infringe the rights of financial consumers

To do the utmost to enhance irrational financial practices by reflecting the demands of financial consumers in eagerness

To handle complaints of and damage to financial consumers as promptly and fairly as possible

To ensure a sound financial culture is created by reaching out to the financially vulnerable and fulfilling providing training on finance with integrity to establish the same

Hana BankHana SK CardHana Savings BankHana Daetoo SecuritiesKEB

May 20, 2013Jul 2, 2013Jul 22, 2013Aug 9, 2013Sep 30, 2013

HFG’s current status on announcing the Charter for

the Protection of Financial Consumers’ Rights


Launch of the Customer Information Protection Division

Hana Bank and KEB launched the Customer Information Protection Division overseeing the pro-tection of customer protection and IT security in February 2014. This was done as a method to intensify the protection of financial consumers.

Joint Arrangement of the Consumer Protection System in the Group Level

HFG developed the “consumer protection system” in the group level, which enables effective con-sumer protection at all stages from product development to sales and post management, while integrating all scattered functions in affiliates. It will be applied to each affiliate consecutively from September 2014.

Declaration Ceremony on the Healthy Responsibilities through the

Moral Rearmament

HFG declared its responsibilities in “customer-centeredness”, “information protection”, “mutual respect”, and “training on morality” as those that are essential for the health and happiness of customers, employees and the society as a whole. HFG reaffirmed its com-mitment for due actions by holding the declaration ceremony on the Healthy Responsibili-ties through the Moral Rearmament. HFG will grow as a trusted financial group by morally rearming its employees as the basic step.

4 Tasks to Practice Healthy Responsibilities

Customer-centered Responsibilities

Responsibilities in Moral Training

Responsibilities in Mutual Respect

Responsibilities in Information Protection

To g row as a f i nanc ia l group whose top priority is on customers, by having each af f i l iate prescr ibe and practice the Charter on Customer-centered Responsibilities

To p rov ide t ra in ing on strong mora l va lues to employees and their family to help spread a proper moral culture throughout the society

To form cooperative ties for mutual growth where mutual respect and con-sideration take place not only among employees, but also with partner com-panies that have transac-tions with HFG

To recognize the informa-tion of customers as cus-tomers’ critical assets, and protect it more seamlessly, and have zero tolerance for its intentional leakage

Hana Case Review

HealthyResponsibilities

Customer-Centeredness

InformationProtection

MutualRespect

Training on Morality

In August 2013, Hana Bank won the Grand Prize in the 2nd Financial Consumer Protection Award organized by the Korea Economic Daily for its passionate endeav-ors on protection of financial consumers including its launch of an exclusive unit to protect the rights of fi-nancial consumers.

Transferring the Information Protection Team and IT Information Security Office which belonged to the Compliance Support Division and IT Division to the

Information Protection Division

Expansion of the Existing Personal Information Management Team into the Customer Information

Protection Division


Risk Management


The Trusted Premier


34

Products and Services

Hana Bank’s ‘I Can Do It Savings’

KEB’s ‘KEB Wingo Bingo Installment Savings’

Hana SK Card’s ‘Big Pot GiveU Card’

HFG’s Advanced Products and Services

HFG seeks to give joy and satisfaction to customers by developing required financial products and services based on competencies and synergies built up in fields such as banking, securities, card and insurance. HFG will brighten up the lives of customers by providing products and services befitting its status as a financial group.

Flagship Products and Services of HFG’s Affiliates

KEB Wingo Bingo Installment Savings The “KEB Wingo Bingo Installment Savings” product of KEB is to cheer up university students, students seeking jobs and those that have just started working. The product offers a preferential interest rate based on certain conditions such as landing a job during the subscription period. Upon the cancellation of the savings due to reasons of tuition fees, overseas studying and starting up of a business, a special interest rate for cancellation is applied.

Safe driving Volunteering Loving

Doing activities for self-devel-

opment

Making positive remarks

Reading books

together

Donating blood

Quitting smoking and/or

drinking alcohol

I Can Do It SavingsIn order to celebrate Hana Bank’s position as the leading bank in Korea according to Euromoney for two consecutive years in 2013 and 2014, it launched a savings product titled “I Can Do It”in July 2014. The product offers preferential interest rates to customers upon selecting two self-resolutions for their health and safety such as safe driving, and quitting smoking or drinking alcohol.

· A List of Self-Resolutions

Hana Wrap ServiceHana Daetoo Securities provides comprehensive asset management services where specialists comprehensively manage asset compositions, management and investment advisory services for wide-ranging financial investment products including stocks, derivatives and funds.

· Benefits of the Hana Wrap Service

Customized asset management for

customers

Asset management by specialists

A commission fee scheme based on the management

performance

Transparent performance

inquiry

Thorough post management

Big Pot GiveU Card Hana SK Card launched the “Hana SK Big Pot GiveU Card” in November 2013. The product allows its customers to donate KRW 20,000 per account of Hana SK Card to a non-profit organization they selected in the course of the credit card issuance.


Striving to provide better products and services

HFG does the utmost to continuously research customers’ changing characteristics and trends, and provide products and services that customers need. HFG will continue to strive to produce financial products and services with zeal and authenticity to customers amid market changes.

Pilot Operation of the Table Branch

From February 11, 2014, 5 Hana Bank branches and 5 KEB branches started to operate the “Tablet Branch” on a pilot basis. It is a tablet PC-based door-to-door system. HFG’s tablet branch service enables bank employees to visit places where customers cannot visit branches during operating hours, and conduct financial consulting services via tablet PC. Hana Daetoo Securities adopted it for the first time in 2013, and it will be expanded to all affiliates including Hana Capital, Hana Life and Hana Savings Bank.

Setup of the PIB Center

HFG is incubating on the setup of PIB center (integrated banking branch) where Hana Bank’s pri-vate banking functions and Hana Daetoo Securities’ investment banking functions are integrated so that customers can use financial services more conveniently. HFG will do the utmost to offer

greater values to customers by establishing and expanding the PIB center.

Hana Crenovation Program

HFG adopted the “Hana Crenovation Program” in November 2013 where top management listens to, evaluates and reflects on innovative proposals made by employees. Regular weekly meetings were held by 49 employees in 8 teams selected through recommendation and screening. Activities on tasks for innovative measures were presented to top management during mid-term and final presentation sessions in January and April.

Launch of a Website for Foreigners

KEB launched the “EasyOne Foreigners’ Service” to offer conveniences in financial services for foreigners residing in Korea in June 2013. KEB’s foreigner-exclusive website service not only offers optimized financial services depending on the purpose of their stay (workers, students in house-holds dispatched from abroad) but also presents online non-financial services which are required from arrival to departure, e.g. move-in, communications, leisure and cultural services.

· Languages available in the EasyOne service

Pilot Operation of the Table Branch

Hana Crenovation Program

KEB’s website for the EasyOne service

open.keb.co.kr/MLMAIN.web

English Chinese Japanese Vietnamese

Premier Hana Financial Group • Products and Services

Smart Finance


The Trusted Premier


36

Mobile Finance

As the number of customers using mobile finance increases, HFG has made diverse efforts to en-hance the convenience in mobile finance, including developing financial applications and launching a business unit for smart finance. In particular, affiliates of HFG develop and provide diverse ser-vices including taxation services in augmented reality beyond app-based finance.

HFG’s Major Financial Applications

Smart Finance

Hana N Bank It is an iconic banking application allowing application users to find finance easy and fun. Additional services include not only banking services e.g. deposit check, money transfer, loan, card, and foreign exchange but also such additional services as inquiry & subscription into financial products and asset management.

Hana N Wallet It is Hana Bank’s E-wallet application where the “cashnut” or rechargeable cash is aligned with a bank account for customers to perform wiring and payment easily. Moreover, it can be used as a payment means via barcode in about 30 member stores including convenience stores.

KEB M Bank Financial services covering inquiry, transfer, deposit, loan, foreign exchange, credit card and utility bill are offered. Moreover, KEB’s “KEB smart foreign ex-change rate” and “Smart money exchange” are offered that take full advantage of KEB’s features. At the same time, the “KEB Global Banking” service is offered to foreign customers residing in Korea for their convenience and security.

Smart Hana HTHana Daetoo Securities’ “Smart Hana HT” application touts the fastest log-in and order placement speeds in the industry. Moreover, it provides “News Push” service where news on stock items held by customers is offered even without the application being executed.

mobi boxHana SK Card’s “mobi box” provides the existing “get more” customized services for the industries and member stores that are frequented by customers by analyzing their credit card usage records. It also serves as its total mobile service application, encompassing the “mobi pay”, and “mobi card”, Hana SK mobile card.


Launch of the Future Finance Support Team

As customer contact points are moving toward mobile platforms due to the advancement of IT, HFG launched the Future Finance Support Team on August 21, 2013. The goal was to preem ptively lead the smart finance environment and take the lead in executing change strategies for customer contacts. The team is expected to provide “smart business” services beyond the limita-tions of the existing mobile banking to enable 4-dimensional services where customers’ location, time and space are combined through smart finance.

Initiatives of the Future Finance Support Team of HFG

Major New Mobile Finance Services in 2013

Hana Bank started to provide “apartment loans” and “financial widget” services via augmented reality on the “Hana N Bank”, a smart phone banking application services in August 2013.

Initiative 1 Initiative 2 Initiative 3

To enhance the execution capacities by sharing and extending the mea-

sures for smart finance services with affiliates

To enable customers to use various financial channels according to their requirements through smart finance

To forecast customer trends on smart finance and embed differentiated

smart finance services in customer contact points

Improvement of the Mobile Finance Services

Hana Bank completely upgraded the “Hana N CBS”, its corporate customer-oriented smart bank-

ing service and design to be more customer-friendly on January 14, 2014.

Key Upgrades in Hana N CBS

To increase the transaction speed by minimizing the usage of images

To add a function of interactive payment alarm

To enable the touch operation that is easy and intuitive on the screen

AR-based Apartment Loans

It is a finance service where GPS services and the augmented reality technology are combined. The one-stop service covers the identification of the market prices, and the borrowable amount, and application for consultation on loans by scanning apartment complexes around cus-tomers via smart phone

Financial widget It is equipped with a function to inquire on finance-related information on the desktop of a smart phone without having to open the application.

Seminar inviting high-achievers in smart finance among em-

ployees

Hana Bank’s‘Hana N Bank’

Hana Bank’s‘Hana N CBS’


Smart Finance


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38

Hana Service Quality Index Model and Principles for Customer Services

HFG exclusively developed the Hana Service Quality Index (HSQI) model to provide products and services that could touch the heart of customers beyond satisfying them. The model enables com-pany-wide objective measurement on the service quality. Principles for customer services are also prescribed and complied with to create a corporate culture where customers are the top priority.

Hana’s Service Quality Index Model

Facilitation of Customer Communication

HFG’s communication with customers continues on through diverse social network service (SNS) channels including Twitter and Facebook. As a means to reinforce customer communication, Hana Bank launched the “Hana N Smart”, an installation-based blog in March 2013. The blog offers the latest financial trends, culture, lifestyle and financial products & services of Hana Bank. It plays the role of a contents hub to address customers’ questions.

“Hana N Smart” blog blog.hanabank.com

Hana Life top management’s one-day experience to improve

customer services 1. Service Quality Leadership

· Social Quotient (SQ) Leadership of heads of departments and branches · Strategic SQ leadership

5. Work attitudes

· Promptness· Politeness

4. Expertise in Task Operation

· A system to reinforce expertise

3. Collaboration system

· Reliability · Cooperativeness· Communication

2. Customer-Centered Initiation of Tasks

· Customer-centered attitudes in corporate management


HFG’s Customer Service Principles

Type Items Content

Employees

SupremeAppreciationTrainingInnovationStrategy

We seek for supreme financial servicesWe respect and gratify all employeesWe cherish individual skillsWe innovate and improve customer experiencesWe conduct tasks strategically

Customers

FunAuthorityCoverageTrustInteractionOngoingNobility

Customers are to be welcomed with joy and pleasure at all timesCustomers are the reason for HFG to existCustomers have the right to demand top-notch financial servicesCustomers choose us only when they trust usCustomers talk and process transactions with us with a genuine heartCustomers are financial partners that grow together with usCustomers are to be treated with the highest levels of etiquette and manners

Hana Bank’s “Hana N Smart” blog


Scale-up of Customer Engagement Activities

HFG operates programs where customers can participate to achieve customer satisfaction in a genuine manner. In 2013, in particular, the existing customer engagement programs were ex-panded, and customer feedback was reflected in improving the service quality of HFG. HFG will continue to expand customer engagement activities down the road.

Outreach Service for Consulting on Microfinance

For customers that cannot access a branch of Hana Bank, the Outreach Service for Consulting on Microfinance is available as a mobile branch remodeled from a small van. Outreach services have been offered to diverse customers since June 2013, including consultation on high interest-rate loans for university students and traditional market merchants. Hana Bank will continue to upgrade the financial accessibility of customers through continued operation of services.

KEB’s launching ceremony for the consumer panel titled “KEB

Sol-Together”

Quality certification of HFG’s web

accessibility (WA)

HFG www.hanafn.comIntroduction of Hana Bank pr.hanabank.comHana Bank’s open banking open.hanabank.comIntroduction of KEB open.keb.co.kr/OPHOME.webKEB’s open banking open.keb.co.kr

KEB launched the “KEB Sol-Together” on Novem-ber 21, 2013. It is a consumer panel functioning as a channel to reflect customers’ suggestions to corporate management. The panel consisting of 20 female customers of KEB has a connotation that the wisdom and “soul” of consumers and Solomon are shared. The word “sol” means a pine tree in Korean, implying KEB’s commitment to be steadily loyal to customers, which is not tarnished by any external conditions as in the case of a pine tree.

Hana Bank expanded the “Hana SoL”, a committee of employees’ fami l ies which was in i t iated to enhance customer satisfaction, into the “Consumer Survey Panel”on March 20, 2013. The panel now has a broader target to include customers that subscribed to products of Hana Bank. It passes on the voices and feedback from the sites and works on enhancing and improving products.

Higher Conveniences in the Usage of Financial Services

HFG does the utmost to upgrade conveniences in the usage of financial services, and fulfilling the public-friendly functions of finance and social responsibilities. To this end, Hana Bank and KEB run the “open banking” service where Internet banking users including the disabled could use the service with a higher convenience.

KEB’s “open banking” service launched on April 1, 2013 is to allow the Internet banking service via voice using a screen reader program not only for ordinary customers but also for the blind.The screen also consists of colors and signs with a big color contrast so that the color-blind and those with color vision deficiency can easily access the service.

In March 2013, Hana Bank enabled Internet banking to be made available by using just a keyboard for easy access. This makes Internet banking more accessible to customers including differently abled customers. Hana Bank added a function where the menu composition and screen ratio are configured automatically in another device with a dif ferent screen size.

ELT Sales Ranking First in Customer Satisfaction

KEB ranked first in the FSS’ evaluation of customer satisfac-tion on the equity-linked trust through mystery shopping for domestic banks on March 8, 2013.


Smart Finance


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40

Strategies of Global HFG

HFG is ready to join the global financial group club by ranking first in Korea, one of the top 5 in Asia and top 40 on the global stage by aiming to achieve a pre-tax profit of about KRW 6 trillion by 2025 based on 2 strategies of localization and product diversification. Accordingly, HFG is so-lidifying its presence abroad as Hana Bank China and PT Bank KEB Hana Indonesia are recruiting local employees and performing sales activities targeting local companies and people. New values are provided to customers by developing differentiated products and services that are free from limitations on interest rate of the Chinese financial authorities. Plans are underway to expand the global networks through localization and product diversification targeting emerging countries in the Middle East and Africa.


HFG holds 128 global networks in 24 countries through network expansion with 5 in the Americas and 9 in Asia in 2013. Leveraging the largest global network scale in Korea, HFG will further grow as “The Trusted Premier Global Financial Group.”

Date Bank Country Content

May 15, 2013 KEB Turkey Opened the Istanbul Office

Jun 28, 2013 Hana Bank Indonesia Opened the Avenue Branch

Jun 28, 2013 Hana Bank Indonesia Opened the KBN Branch

Jul 1, 2013 KEB Indonesia Opened Jeruk Office

Sep 4, 2013 KEB Philippines Opened the Clark Branch

Nov 13, 2013 KEB Japan Opened the Fukuoka Office

Nov 28, 2013 KEB China Opened the Xiqing Branch

Top 40 global groups

2025 Global Vision


● Increases in the Global Network

As for affiliates, branches, local subsidiaries, and offices

2012

114

2013

128

24 networks in 128 countries

Korea’s largest global network

As of May 2014

12.28%

Opening of KEB’s Clark Branch in the Philippines

Major current status of global advancement for Hana Bank and KEB in 2013

As of the Asia Pacific in 2013

Europe &

Middle East

10Asia Pacific

95Americas

23


Competency Buildup through Business Partnerships and Agreements

HFG broadens its horizons in the global financial market by providing services aligned with local finance and nurturing local specialists. HFG, as a result, opens new offices and branches abroad, signs alliances and agreements with overseas financial companies, and subscribes to global unions. In 2013, and in the first half of 2014, HFG strived to secure emerging markets by advancing into the existing major markets including China and the Middle East and also into Africa and India.

Major International Business Partnerships and Agreements Signed in 2013 and 2014

Signing an MOU for the Development of Fair Trade

Hana Bank seeks to spread the global consumer campaign for fair trade where consumers in advanced countries purchase products manufactured in the third world at a rational price through fair trade and provide direct benefits for the sellers to escape poverty. Thus, Hana Bank signed an MOU with the Fairtrade Labeling Organization International in October 2013. Hana Bank is expect-ed to offer new financial products and services so that fair trade can take proper roots in Korea through cooperation with the Fairtrade Labeling Organization International.

Content Date Region

KEB and Mashreq Bank signing a strategic business partnership Jan 11, 2013 Middle East

Hana Bank signing an agreement to join the Asia Financial Cooperation Association Apr 30, 2013 China

Hana Bank and KEB signing an MOU with Korea Federation of Small and Medium Business and the Dubai Free Economic Zone Authority

May 28, 2013Middle East (Dubai)

Hana Bank signing a strategic business partnership with Ayeyarwady Bank May 29, 2013 Myanmar

HFG signing a strategic business partnership with China Minsheng Bank May 30, 2013 China

KEB signing an MOU with Korea Federation of Small and Medium Business and UK Trade & Investment

Nov 6, 2013 UK

Hana Bank signing an MOU with Barclays Bank Nov 7, 2013 Africa

KEB signing an MOU with State Bank of India Feb 27, 2014 India

Global Cooperation

Launching PT Bank KEB Hana

PT Bank KEB Hana, as a joint local subsidiary in Indonesia, was launched on March 11, 2014, heralding the first step for KEB and Hana Bank to make a joint overseas entry. Hana Bank has initiated localization after acquiring a local bank in Indonesia in 2007, while KEB has offered financial services to Korean companies that have made inroads into Indo-nesia for the first time as a Korean bank since 1990. The two banks have formed a joint subsidiary, which is expected to contribute to attaining HFG’s strategy goal of achieving a 40% revenue from global operations by offering seamless localization and differentiated financial services based on the sharing of financial know-how between the two.

Hana Case Review

Hana Bank signing an MOU with the Fairtrade Labeling Orga-

nization International

HFG signing a strategic business partnership with China Min-

sheng Bank

Hana Bank and KEB signing an MOU with Korea Federation

of Small and Medium Business and the Dubai Free Economic

Zone Authority

Global Hana Financial Group • Global Network Expansion

Global Cooperation


The Trusted Premier



Hana Bank’s “One Click Mortgage” (an online mortgage loan product) and “Hana N” (a mobile electronic wallet) won awards in the “Product and Service Innovation” and “Disruptive Innovation” in Banking categories, respectively at the 2013 BAI – Finacle Global Banking Innovation Awards held in Denver, U.S. on November 5, 2013.

· BAI(Bank Administration Institute): It is a nonprofit organization, based in Chicago, which was established in 1928 to share examples and innovative practices of banks around the world, including the United States.

Winning in the 2 categories of “the 2013

BAI - Finacle Global Banking Innovation

Awards”

Received the “Strongest Bank in Korea”

award from the Asian Banker

HFG announced that it received the “Strongest Bank in Korea” award from the Asian Banker mag-azine held in Dubai, UAE on September 17, 2013. The award was a result of the bank’s expansion into new business areas and its overseas sales network.

· The Asian Banker: An institution established in 1996 that is recognized as an authority in research, consulting, and publishing in Asian financial centers, including Singapore and Hong Kong

Won the “2013 Best Cash Manage-

ment in Korea” and “2013 Best Foreign

Exchange Bank in Korea” awards from

Asiamoney

KEB was honored with awards in 8 categories, including 4 cash management categories such as Best Local Cash Management Bank by FIs, and 4 foreign exchange categories such as FX Products and Services, at an awards ceremony honoring the best financial institutions in respective categories, from Asiamoney, a global economic magazine. The awards ceremony was held on September 26, 2013.

· The Asiamoney: A Hong Kong financial journal that provides financial news on asset management, stocks,

banks and investment, etc., and conducts annual surveys for financial consumers in the Asia-Pacific region,

announcing ranks of financial institutions accordingly

Selected as the “Best Private Bank in

Korea” by the Banker and PWM

Hana Bank was selected as the “Best Private Bank in Korea” for 3 consecutive years at the “5th Global Private Banking Awards” co-organized by The Banker the Professional Wealth Manage-ment (PWM) on October 30, 2013.

· The Banker & PWM: Financial magazines published by the Financial Times of the U.K., and The Banker, in

particular, is a prestigious financial magazine ranking first in the financial monthly magazine category

42

Winning a Prize in the Outstanding RM

Training & Development Programme of

2013 Presented by the PBI

Hana Bank won the “Highly Commended Prize” in the categories of the “Outstanding RM Training & Development Programme” and the “Most Innovative Business Model” at the “23rd Global Wealth Award 2013” organized by the Private Banker International (PBI), the highly prestigious financial journal of the U.K. in October and November 2013.

· The PBI: A PB-specific media company exclusively covering global private banking and wealth management, having organized the “Global Wealth Awards” since 1987

Selected as the “Best Foreign Exchange

Bank in Korea” for 6 Consecutive Years

by the Finance Asia

For 6 consecutive years, KEB was selected as the “Best Foreign Exchange Bank in Korea” at the best financial institution award ceremony organized by the Finance Asia, the top-notch global Asia economic journal, which was held in Singapore on September 12, 2013.

· The Finance Asia: The world-renowned Asia-Pacific financial journal subscribed by over 50,000 major economic specialists including CEOs, CFOs, officials in the financial authorities and global institutional investors in the Asia Pacific.

Winning the “2013 Red Dot Design

Award”

The brand design of Hana Bank was selected as the “winner” in the “communication” category thanks to its pictogram that focuses on continued and comfortable communication with consum-ers at the Red Dot Design Award held on July 16, 2013.

· Red Dot Design Award: One of the world’s top 3 renowned design awards along with “IF Design Award” of Germany and “IDEA Design Award” of the U.S.

Designated as the “Best Bank in Korea”

by the Euromoney

Hana Bank was designated as the “Best Bank in Korea”, the highest prize given to a country for differentiated competitiveness at the Euromoney’s “Award for Excellence 2013” held in July in Hong Kong 2013. The award can be attributed to Hana Bank’s innovativeness in smart phone banking and differentiated competitiveness in continuity in strategic alliances in other industries besides the financial industry.

· The Euromoney: It was first published in 1969 as the U.K.’s global financial magazine with about 60,000 monthly subscribers including CEOs and financial specialists.

4342 Global Hana Financial Group • Global Network Expansion

Global Cooperation


The Trusted Premier



Disclosure on MAnAgeMent ApproAch

02

Growing Together,

Sharing Happiness

Happy Together, Joy Together

Type Category Major Items for Reporting

A financial group that grows together with community

· Products and Services for the Public Interest· Community Involvement· Human Resource Management· Environmental Management

· Activities to invigorate the local economy · Joyful working environment, Work-life balance, Stable workplace, Top-notch competitiveness· Activities and performance of environmental management

A financial group that shares happiness

· Social Contribution· Social Contribution Organization· 2013 Social Contribution Activities

· Philosophies on social contribution· Strategies for social contribution · Hana Financial Group Foundations· Hana Financial Group Volunteering Corps · Activities on Green, Sharing, and Culture

MANAGEMENT PRINCIPLES 2013 REPORTED ITEMS

HFG will pursue the dual goals of prescribing the acquisition of new growth opportunities based on passionate social contribution as the roles of finance, and of achieving sustainable growth based on virtu-ous cycle and social contribution. As such, HFG will serve as an ad-vocate for the growth of all stakeholders and the pursuit of happiness for all members of the society.

A financial group that grows together with community

A financial group that shares happiness

Striking a balance between growth which is the rationale for a company and social con-tribution

Fulfilling the inherent roles of the financial in-dustry and sharing revenues from growth with all stakeholders

HFG pours in the utmost efforts to create a suitable working environment for employees by working towards

the success and happiness of customers. HFG has passionately fulfilled corporate social responsibilities by

striving towards the roles of sharing happiness through diverse social contribution programs.

HFG will continuously put best efforts to realizing happiness of stakeholders and community.

Happy Together, Joy Together

KRW 20 billion

ADDITIONAL ExTENSION OF MICROCREDIT IN 2013 (KRW 10 billion from HFG as the holding company and KRW 10 billion from Hana Bank)

20,165 Persons

NUMBER OF PARTICIPANTS IN vOLUNTEERING IN 2013

46

Microcredit Service

HFG launched the Hana Smile Microcredit Foundation in 2008 to assist the self-sufficiency of the financially vulnerable, extending microcredit programs for them. HFG extends assistance for the recipients to rehabilitate themselves to be economically active through microcredit services. Self-sufficiency funds including start-up funds and operating funds are extended with no collateral or guarantee. In May 2013, HFG as the holding company and Hana Bank extended KRW 10 billion respectively to the Hana Smile Microcredit Foundation and Smile Microcredit Bank, thus extending a total of KRW 50 billion for microcredit businesses.

Hana Bank and KEB – Joint Service for the New Hope Seed Loan

In April 2014, Hana Bank and KEB conducted services to extend emergency funds for educa-tional & medical expenses, funeral services and preferential points in internship opportunities for subscribers to the New Hope Seed Loan. Subscribers can now be provided with the emergency funds of up to KRW 2 million for educational & medical expenses besides the standard ceiling for the New Hope Seed Loan, and can avail of a waiver with up to 1% interest rate.

Records of Sales for the New Hope Seed Product

Product Company in charge Unit 2011 2012 2013

New Hope Seed

Hana BankNo. 17,263 18,050 16,802

KRW 100 million 1,866 1,989 1,840

KEBNo. 4,145 18,726 26,258

KRW 100 million 371 1,492 2,225

Products and Services for Public Interest

2nd Launch Ceremony of the Hope Financial Plaza

Operation of the Hana KEB Hope Financial Plaza

HFG plays roles as a microcredit consultant by providing one-on-one customized consulting to the financially vulnerable via the “Hana KEB Hope Financial Plaza” where Hana Bank and KEB jointly provide one-stop microcredit services. In February 2013, the second plaza was opened to enable a total of 24 branches (13 branches of Hana Bank and 11 branches of KEB) to provide diverse financial services to the financially vulnerable.

Services of the Hana KEB Hope Financial Plaza

· Easing the financial burden of multiple debt holders and users of high interest rate loans· Preventing and resolving household debts issues· Improving the cash flow through financial diagnosis· Introducing deposit products to lay the foundation for assets of the financially vulnerable · Devising measures to utilize microcredit systems of related institutions

● Volume of microcredit loans extended Unit: KRW million

7,214.4

7,909.2

4,113.3

2011

2013

2012

● Volume of Hope Loans extended Unit: KRW million

221.8

638.0

5,017.0

2011

2013

2012


Hana Bank’s Products and Services for the Public Interest

Financial Products for Spreading the Culture of Sharing

Hana Bank extends the principal amount of trust and interest revenues to projects of public interest and social welfare projects through the Hana Happiness Sharing Trust. The culture of sharing is spread through “designation-type” products where subscribers can select recipient organizations if the amount of subscription exceeds KRW 500 million. Hana Bank was the only bank that was allowed to handle trust products of public interest back in 1971. As of August 2013, a total of KRW 12.2 billion was delivered to 2,800 places by raising revenues from public interest trust 32 times. Hana Bank also launched the Happiness Sharing Savings that provides preferential interest and group subsidies to customers that practice sharing in forms of volunteering and donation.

Financial Products for SMEs

Hana Bank handles diverse financial products to assist the growth of SMEs. The “Mutual Growth Package Loan” targeting suppliers of large enterprises enables the fund extension to the suppliers based on the credit of large enterprises in the stages ranging from order placement to payment. An interest rate that is lower than the market rate is applied through the “Mutual Growth Loan.” The interest expenses reduced as a result is applied to suppliers, thus reducing the interest rate. Through the “on-lending loan” where low interest rate funds are extended to SMEs, Hana Bank extended funds of KRW 1.1596 trillion in 2013.

Financial Products Generating the Environmental Value

Hana Bank provides financial products to develop new and renewable energies and encourage eco-friendly life. It launched the “Solar Loan” to extend loans for PV power facilities. For credit loan customers engaging in the initiative of energy saving, “- 0.3℃ Loan” and “S Line Savings” are made available. Hana’s 2013 Suncheon Bay International Garden Savings was sold in April 2010 to sponsor the 2013 Suncheon Bay International Garden Fair in 2013. The total volume of revenues amounted to KRW 10.4 billion with 21,823 accounts.

Hana Bank’ consulting on customized microcredit service

Agreeing to Financially Support Companies that Create Jobs

Hana Bank signed an agreement for financial support for companies that create jobs and social enterprises in November 2013, specially contributing KRW 5 billion to Seoul Credit Guarantee Foundation. Through an agreement to support social enterprises that fulfill cor-porate responsibilities by creating jobs amid economic hardships, Hana Bank is ready to serve as a cornerstone for the growth of companies.

Hana Case Review

● Performance of on-lending loans Unit: KRW 100 million

2011

2013

2012

5,210

11,411

11,596

● Performance of -0.3℃ Loan Unit: KRW 100 million

2011

2013

2012

202

725

624

Hana Financial Group •that Grows Together

Products and Services for the Public Interest




Growing Together,

Sharing Happiness

48

KEB’s Products and Services for the Public Interest

Financial Products for Microcredit

KEB launched the “KEB Happiness Sharing Loan” in April 2013. It is a small-amount and short-term loan product without collateral targeting the financially vulnerable that have depleted their credit loan limit or lack liquidity. KEB reinforced microcredit by providing additional benefits to borrowers who repaid their debts in a timely manner, people with low income, recipients of basic livelihood security, multicultural families and the disabled.

Financial Products for SMEs

KEB has continued to launch and operate products for SMEs to lay a stable foundation for their business. The “2013 Enterprise Smart Loan” launched in January 2013 has a broader scope of interest rate from the existing 0.5% p to 0.8% p, thus expanding the scale of support for SMEs. Moreover, KEB launched the “Growth Together Loan” in October 2013. Under this scheme, the ex-isting method of extending loans was changed from providing loan extension for receivables for the completed deliveries to large enterprises to the one starting from the order placement from large enterprises. The “Growth Together Loan” was recognized for contributing to the win-win growth of HFG by being selected as a financial product for win-win growth in the evaluation category of mutual growth of the Fair Trade Commission.

Financial Products Generating Environmental Value

KEB offers financial products to expand the market for alternative energies while raising awareness about the environment. The “My Solar Partner Loan” designed to extend loans for the construction of PV power facilities was sold in the total volume of KRW 5.9 billion as of December 2013 despite the market slowdown for alternative energies. The “New Growth Partner Loan” for SMEs involved in eco-friendly industries or alternative energy industries recorded KRW 5.4 billion, showing an increase from the volume in 2012. The ESCO Trade Receivables Factoring product operated in alignment with Korea Energy Management Corporation to encourage the installation of energy saving facilities has continuously shown an increase in sales, recording KRW 8.6 billion in 2013.

Products and Services for Public Interest

Setup of the SME Global Center

KEB opened the SME Global Center in February 2013 to assist SMEs to venture abroad. The center is the first advisory center of a commercial bank in Korea. It provides one-stop financial services for overseas entry such as transfer of know-how on exchange risk management, training on foreign exchange & export/import, resolution of special trades & international disputes and innovative techniques on handling transactions between a bank and a company including e-commerce. The center has over 100 cases of applica-tion within 1 month of its foundation. As on December 2013, 347 cases were registered, hinting at a strong demand for it.

Hana Case Review

● Performance of the Enterprise

Smart Loan Unit: KRW 100 million

2011

2013

2012

1,025

4,897

7,250

● Performance of ESCO Trade Receivables

Factoring Product Unit: KRW 100 million

2011

2013

2012

19

75

86

● Performance of the New Growth

Partner Loan Unit: KRW 100 million

2011

2013

2012

165

21

54


One-on-one Financial Consulting in the Outreach Service

Hana Bank’s employees visiting the Myeongrang Market to

reinvigorate traditional markets


Reinvigorating Traditional Markets

Traditional markets in local regions must flourish for the local economy to grow. HFG has strived for mutual growth with community by initiating microcredit services and projects aligned with tradi-tional markets for vibrancy in these markets.

Projects Linked to Traditional Markets

Hana Touch Market

The Myeongrang Market is a place to exhibit, sell and ex-

change one’s creative works.

· Exhibiting, selling and exchange diverse hand-made works

· Presenting one’s own know-how on hand-made work and

creative working processes even without finished objects

· Exhibiting, selling and exchanging creative works and tourist

kits of foreigners

The “Romantic Myeongrang” Outdoor Market in Myeongdong

KEB opened the “Romantic Myeongrang” Outdoor Market in Myeongdong, offering abundant eye-pleasers to foreign tourists and domestic citizens, and recreating Myeongdong as a cultural space. The outdoor market held in the KEB Plaza located in the head office of KEB is an event co-organized by the “Living & Art Creative Center”, a social enterprise. It is held every Sunday for about 5 months, unfolding diverse exhibitions, experiences and performances.

The “2nd Romantic Myeongrang” Outdoor Market in Myeongdong which was opened in 2013 had participation from about 50 artists who exhibited and sold their creative works. Diverse hands-on experience programs and indie music band performances were presented to build a close bond among participants, tourists and citizens. HFG will continue to implement wide-ranging participa-tion-based social contribution projects including the Myeongrang Market so that the downtown of Myeongdong could be refurbished as a more lively cultural space.

The “Hana Touch Market” system was developed where customers visiting Hana Bank are offered with discount vouchers for traditional markets which can be used in dis-count stores of the “Hana Touch Market” in Jungdong and Sangdong markets in Bucheon.

Hana Touch Market

One-on-one financial consulting services are offered by employees of Hana Bank that reach out to customers after receiving a reservation call at the exclusive call center. They consult on how to manage household debts and refinancing for high interest rate loans.

One-on-one Financial Consulting in the Outreach Service

Preferential financial services are offered by matching with member stores of HFG that are close to 42 traditional mar-kets nationwide. For sellers in these markets that cannot access banks easily due to mobility constraints, the “Mobile Hana Bank” is made available so that they can enjoy banking services on the spot.

Matching of Member Stores

Hana Bank and KEB conducted customized microcredit consulting services including consulting on prevention of ille-gal financial scams, jeonsae (substantial, lump-sum deposit for housing) funds for the financially vulnerable, conversion of high interest rate loans and credit recovery.

Free Outreach Financial Consulting Services






Growing Together,

Sharing Happiness

50

HFG’s Talent Vision

The talent vision pursued by HFG is “a leader equipped with specialized competency and lead-ership to achieve the vision.” This is a leader that realizes performance leadership, organizational leadership and innovation leadership based on 5 core values (passion, openness, customer-cen-teredness, expertise and respect & consideration and integrity).

Hana’s Talent Visions


Leaders equipped with professional capacities and leadership to achieve the vision

Passion RespectExcellenceWith CustomerOpenness

INTEGRITY

Performance Leadership Innovation Leadership Organizational Leadership

· Fostering performance- oriented attitudes· Problem solving· Forming human networks· Building customer-oriented attitudes

· Leading changes· Suggesting visions· Fostering strategic thinking· Developing a global mindset

· Building trust· Fostering talents· Developing emotional intelligence· Conducting communication

Trusted, Advanced and Happy Hana People

HFG set an individual vision for employees as “Trusted, Advanced and Happy Hana People”.Based on the newly set vision, HFG also strives to make a joyful and vibrant working environment. To this end, major initiatives were set as “joyful working environment”, “work-life balance”, “stable workplace” and “top-notch competitiveness” so that HFG could support employees to relish a healthy work life.

Key Initiatives for Talent Management

Joyful working environment

Work-life balance Stable workplace Top-notch

competitiveness

23,094

No. of employees at HFG

As of December 2013

Number of employees in major affiliates

As of December 2013

Performance Leadership

To set challenging goals by themselves and be equipped with strong com-mitment and execution capabilities to achieve them

Innovation Leadership

To set organizational directions specifi-cally based on clear insights for chang-es in the management environment and sharing them with members

Organizational Leadership

To form a trust-based community cul-ture based on smooth communication

2025 Individual Vision of Hana People

Trusted, Advanced and Happy Hana People

Name of affiliates No. of employees

Hana Financial Group 110

Hana Bank 9.045

KEB 7,838

Hana Daetoo Securities 1,273

Hana SK Card 454

Hana Capital 197

Hana Life 144

Hana Savings Bank 147

Hana Asset Trust 97

Hana I&S 473

Hana Institute of Finance 60


Joyful Working Environment

Over 8 hours are spent daily at work in a 24-hour day. HFG operates a plethora of employee-friend-ly programs for them to work joyfully in their workplace. HFG also builds a corporate culture where employees are the top priority through activities of sharing the corporate culture and values.

A Campaign on Responsibilities for Mutual Respect

HFG carries out a campaign to improve the corporate culture of mutual respect as declared through the “Healthy Responsibilities through the Moral Rearmament” on June 17, 2013. The gist of the campaign lies in exchange of positive comments, expressing love for one another and “beautiful drinking and beautiful closing.” Accordingly, affiliates of HFG are eager to establish a culture of mutual respect in forms of training against sexual harassment and the distribution of “a booklet on language etiquettes.”

The Red Mailbox and the “Thanks-to-you Card” Campaigns

Employees are united by conveying gratifying expressions with each other thanks to the Red Mailbox and the “Thanks-to-you Card” campaigns. The Red Mailbox campaign started in the Chungcheong Sales Division of KEB and spread throughout HFG. Proactive communication and positive energy enable HFG employees to create a sound corporate culture.

Beautiful Drinking and Beautiful Closing Campaign

HFG conducts the “Beautiful Drinking and Beautiful Closing”campaign in the group level, striving to create a sound dining-out culture. Its slogan is drinking slowly “without any pressureor excess”, wrapping up quickly “before 9 o’clock without the next round”, and striving “to create an atmo-sphere with unity with no need for alcohol.” HFG’s employees create a dining-out culture of mutual respect and consideration.

Lecture on “Happy Communication”

A special lecture on “Happy communication” was conducted in order to attain “Healthy Finance, Happy Together.” For the topic on “communication,” chairman Jung-Tai Kim of HFG served as a speaker. He emphasized the necessity to follow-on with the “Happy communication” lecture as well as the need to empathize with others and “Help leadership.” Forming a corporate culture of communication was highlighted by him. Lecture on “Happy Communication”

“Harmony Ping-Pong Competition” of Hana Daetoo Securities

Hana Daetoo Securities held the final round of the “Harmony Ping-Pong Competition” attended by top management and employees in the head office in Yeouido on November 22, 2013. Starting with the local tryouts held on October 10, first and second preliminary rounds were held. The event contributed to the formation of a happy work atmosphere through sporting events with employees, while boosting the healthiness of employees at Hana Daetoo Securities.

Hana Case Review

HFG’s “Thanks-to-you Card” Campaign






Growing Together,

Sharing Happiness

52

Additional Opening of In-house Childcare Centers

HFG has proactively expanded in-house childcare centers so that employees could be re-lieved of the childcare burden and work to their full capabilities. HFG established Seocho-Puruni Childcare Center and also operates in-house childcare centers in Ilsan, Bundang and Suji. HFG also extended KRW 6.3 billion via the Hana Foundation to establish 2 more child care centers in Banpo and Singil and donated the land to the public domain, thus contributing to the expansion of public childcare centers. In 2013, 3 more centers were opened in Euljiro and Anam-dong in Seoul and Ojeong-dong in Daejeon. In early 2014, the Mok-dong center was opened, which exhibited HFG’s commitment to increase the number of in-house childcare centers.

Hana Case Review


Work-Life Balance

Happiness at home significantly determines employees’ immersion in work and performance. HFG runs various programs to assist their work-life balance, including the “Family Day” and “Invitation Day for Parents of Employees.” HFG will steadily advocate for the happiness of employees by reaching out even to ensure the happiness of their families.

Parents Day Event for New Employees

On the Parents Day, HFG invited 200 new employees and their parents for a special event to ex-press gratitude to the parents. It was a meaningful event where HFG promised to “pay back to the parents for fostering their children by cultivating them as greater talents.”

Children’s Day Event - “Oh! Happy Day!”

HFG held the second “Oh! Happy Day!” event with children of employees on the Children’s Day, enabling employees to make precious memories with their family. The event solidified the unity of 1,000 participants including 250 family members of employees through a talent show and sports competitions.

Operation of the Health Management System

HFG provides customized health information service and health management alarm service via smartphone as well as making reservations for clinics and conducting 24/7 health consulting so that employees can maintain a healthy life.

Parents Day Event for New Employees

Children’s Day Event – “Oh! Happy Day!”


Stable Workplace

HFG seeks a stable workplace where all employees can concentrate on their work with comfort. HFG bans forceful labor and child labor prescribed in the protocol of the International Labour Organization (ILO), and complies with the National Labor Relations Act. HFG also guarantees a stable work life for employees through transparent performance evaluation and fair compensation.

Transparent Performance Evaluation

The performance evaluation takes place biannually to offer appropriate compensation for perfor-mance, thus boosting morale among employees. The performance evaluation targets all employ-ees, and additional training is performed for evaluators for more transparent and fairer evaluation.

Handling of Employees’ Grievances

HFG operates a system to handle employees’ grievances. Hana Bank operates the Voice of Em-ployees website for employees to submit various types of grievances. Three in-house counselors are available to provide counseling services to employees. KEB also runs the “KEB Ombudsman” for employees to report on internal grievances.

Establishment of the Labor-Management Culture of Mutual Growth

HFG puts its passionate efforts to create a labor-management culture of mutual growth. Hana Bank runs the Committee for Collective Bargaining with members from both management and labour. In the committee, a total of 6, that is, the CEO and leaders of business units including the Corporate Center, Personal and Commercial Banking and Corporate and Investment Banking, Management Support Division and Human Resource Support Team represent management. It also has 6 people from the labor side, namely, 1 union leader, 3 deputy union leaders and 2 heads of the policy department. This contributes to broadening the scope of mutual understanding and forging bilateral trust as they discuss wage negotiations and various collective agreements.

Operation of the Labor-Management Channels

HFG touts diverse labor-management communication channels. Hana Bank holds both quarterly and ad-hoc labor council meetings to discuss on performance distribution, recruitment, training etc. Other events include the “Family Invitation Day” to collect feedback from families of employ-ees, and “Hanmaeum Festival with the Labor and the Management.”

2013 Hana Hanmaeum Festival with the Labor and the Management

In June 2013, the Hana Hanmaeum Festival with the Labor and the Management was held for all employees of Hana Bank. Hana families reaffirmed their unity, and the labor & the management and families enjoyed networking time. Chairman of HFG Jung-Tae Kim, President & CEO of Hana Bank Jong-Jun Kim and the Labor Union Leader Chang-Geun Kim attended the event where the labor and the management pledged to strive together for a better tomorrow.

Hana Case Review

● No. and Rate of Inspectors for Employee

Performance Evaluation Unit: No. of people (%)

2011

2013

2012

7,923 (84.6)

7,993 (81.2)

8,299 (88.6)

Hana Bank

2011

2013

2012

7,701 (100)

7,968 (99.9)

7,923 (99.9)

KEB

Hana Life’s second Hanmadang for the first day of work






Growing Together,

Sharing Happiness

54

Working-level positions Executive positions Application procedure

Top-notch Competitiveness

HFG does the best to cultivate talent that can provide best products and services to customers, while accurately observing the rapidly changing financial market. All Hana people grow as financial leaders driven by a variety of talent development programs. They are fostered in diverse fields such as retail finance, corporate finance, asset management, investment banking and treasury beyond the boundaries of business sectors and include banking, securities, card, IB, insurance and capital.

Career Development Program (CDP)

All talent development strategies devised by HFG are based on its exclusive career development programs (CDP). All Hana people are helped to develop into top-notch professional experts in finance through HFG’s CDP enabling them to grow as specialists in diverse fields.

Enhancement in the Recruitment Process

HFG operates a systematic recruitment process to find talents that can lead its future. In the open recruitement held during the second half of 2013, HFG added a camp interview and a master teacher system for interviewers. Each interviewer as a master teacher accurately evaluated the character, cooperation and communication skills of applicants by closely observing them, and selected Hana employees after careful consideration of these qualities.

Career Development Program(CDP)

Scope 2

Cultivating job-specific experts who complete systematic training

roadmaps in specialized fields

· Strengthening market competitiveness by establishing a system to develop and secure financial specialists essential for business performance· Suggesting visions for employees, motivating them to perform self-development and enhancing expertise in job functions by establishing practical operating measures in the CDP format

Scope 1

Devising the Career Field for prioritized development depending on job characteristics and relevancy

Scope 3

Establishing measures to align personnel appointment/trans-fer through the ‘Talent Market’

system

Operating the Level 3 course in the job category

Providing opportunities to complete the upper-level course after completing the lower-one

Career Field: Risk management, asset management, corporate loans/credit

evaluation, product development, planning for marketing, corporate banking, private

banking, household banking

Personnel change through in-house recruitment and self-promotion systems

Job fair in the form of a talk concert

Job fair, Job openings/Document screening

First interview evaluating leadership

and basic competency for job execution

BEI-based face-to-face interview

First job interview

Secondary camp interviewInterviews (game interview, PT, group discussion, Hana Value Appropriate-

ness, group-specific task execution, free talking), written tests (character/aptitude

test/common sense)

Secondary camp interview/ Written tests

Final executive interviews

(character/competency)

Executive interviews

Conducting job training in each affiliate after a week-long camp

training in the group level

Group training


● Total training fees and training hours per head

Unit: KRW million (time)

2011

2013

2012

1,045 (117)

1,068 (212)

1,111 (181)

Hana Bank

2011

2013

2012

1,100 (117)

1,426 (128)

1,169 (118)

KEB

A ceremony to offer certificates of appointment to

new employees of Hana Bank in 2013


Green Bank on the Move

Hana Bank announced the “Green Bank on the Move” in 2009 to enhance the awareness about environmental protection among em-ployees, customers and community, and runs wide-ranging environmental programs.

HFG Cares about the Environment

HFG has recognized the critical need to conserve the environment from the outset, and has con-ducted various eco-friendly activities internally including energy saving and recycling of resources. Programs and campaigns are delivered to develop and improve awareness of customers and community regarding the need for environmental protection.

HFG’s Iconic Eco-friendly Programs

Internal Programs External Programs

· Green Day Campaign

The Green Day Campaign consists of programs such as Save Food and Save Energy to scale up the interest in and the awareness about the environment. - Save Food : Engaging in the agreement to reduce food wastage by 10%, and sharing know-how on the Save Food activities - Save Energy : Saving water, electricity and office supplies and running the “Car-Free Day”

· Hana Children’s Art Contests on Love for the Nature “Hana Children’s Art Contests on Love for the Nature” is officially sponsored by Ministry of Environment, which encourages the artistic talent of children and inspires children to be eco-friendly.· Hana Green Concert HFG has spread the word about the preciousness of the environment through the “Hana Green Concert” to raise the environmental awareness. The concert has been a part of the environmental campaign, since June 1993.


Hana Case Review

Major Environmental Management Activities of HFG in 2013

“Save Energy” Activities Many affiliates of HFG save energy by creating a beautiful workplace through activities of “Save Energy” and bringing up the efficiency at work.

Hana Children’s Art Contests on Love for the Nature and Hana Green Concert

“Hana Children’s Art Contests on Love for the Nature” marked its 21st anniversary in 2013. Under the theme of “Show Korea’s Beautiful Nature,” about 38,000 pieces of artworks were submitted from elementary schools nationwide, and 400 elementary schools participated in the group competition. The “2013 Hana Green Concert” was held in May and August in Suncheon and Daejeon, respectively, delivering a message on environmental protection to the general public.

하나 자연사랑 어린이 미술대회 홈페이지

contest.hanabank.co.kr

· Making a beautiful workplace: Cleaning up desks in each department, environmental clean-up, “Clean Office activities”, etc. · Car-free Day: Engaging in saving energy by designating the “Car-free Day” every month

HFG

· Beautiful Workplace, Beautiful Hana People and Beautiful Mindset: Keeping the office environment neat and tidy, ensuring clean appearance, neat clothing and pleasant manners and having an encouraging and praising attitude, etc.

Hana Bank

· Contest on Making a Beautiful Workplace: Awarding prizes and rewards to departments that made their workplace beautifulHana I&S

· Seven Actions to Save Energy: 1. Turning off unnecessary lights 2. Refraining from using personal air conditioning/heating systems 3. Reducing the usage of unnecessary electric power 4. Using public transportation 5. Refraining from using the “quick delivery” services 6. Turning off the PC during lunch break 7. Turning off the PC upon leaving work







Growing Together,

Sharing Happiness

56

Green Finance

Aiming to practice effective environmental management, HFG launched and operates an environ-mental management system that reflects the features of the “financial industry.” Major manage-ment areas include the management of the amount of paper used, water management, energy saving and waste treatment. HFG will fly higher as a group that cares about the environment through continued resource saving activities and the spread of the eco-friendly culture.

Management of the Amount of Paper Used

HFG minimizes the unnecessary usage of paper through the group-wide policies on making a “paperless company” by facilitating the usage of e-paper, and adopting & using office printers enabling the printing of both sides of paper. HFG’s paper recycling rate has gone up thanks to the continuous campaign on encouraging the usage of used paper.

Water Management

Korea is one of the designated countries of water shortage by the World Resource Institute (WRI). Thus, HFG has implemented a campaign to “use only an appropriate amount of water for facial washing and tooth brushing” among employees since last year. HFG plans to install automatic sensors on water basins in more of its buildings and branches.

Energy Saving

Energy saving is an effective way to reduce GHG emitted through the energy usage and to induce the reduction of the usage of natural resources including coal and oil. This also reduces costs of the company. HFG’s “Car-Free Day” has been up and running every month since last year to save energy. Replacement of lights with LEDs is steadily taking place in affiliates’ buildings and branches.

Waste Treatment

Ineffective waste management might affect the safety of not just diverse stakeholders who visit HFG’s branches but can also affect the health and hygiene of employees. HFG has treated waste through an outsourced company specialized in waste treatment in order to manage waste effec-tively. Problems that might result from waste are prevented through stringent waste management of the company.

Conversion into LED Lights

100 branches

2013

43 branches

2012

8 branches

2011


● Water Consumption Unit: ton

2011

2013

2012

292,359

290,158

173,280

Scope of data collection: HFG (main building), Hana Bank (head office, training institute), KEB (head office, Bangbae building, Open Training Center)

● Waste Emissions Unit: ton

2011

2013

2012

339

503

610

Scope of data collection: HFG (main building), Hana Bank (head office, training institute), KEB (head office, Bangbae building, Open Training Center)

*The amount of energy usage and GHG emissions from the main building of HFG were excluded in the figures of 2013, so there have been changes in the figures recorded in the report of the previous year.

● Energy Consumption Unit: TJ

● Scope 1

● Scope 2

2011

2013

2012

63 623

624

587

60

57

Scope of data collection: Hana Bank (head office, training institute), KEB (head office, Bangbae building, Open Training Center)

● CO₂ emissions Unit: tCO2e

2011

2013

2012

2,891 30,490

30,535

28,696

2,730

2,650

● Direct emissions

● Indirect emissions

Scope of data collection: Hana Bank (head office, training institute), KEB (head office, Bangbae building, Open Training Center)


Social Contribution

Philosophies on Social Contribution

HFG strives for corporate citizenship fulfilling responsibilities and duties as a corporate citizen, while playing the role of a sound economic entity. As a result, HFG has strived to fulfill social needs and resolve problems through social contribution activities for the past 40 years. Feasible social contribution activities based on corporate citizenship enhances the self-esteem of employees and scales up the corporate image. This also generates a beautiful “virtuous cycle” that leads to stron-ger management performance.

Strategies for Social Contribution

HFG spearheads social contribution under the themes of “green, sharing and culture” with a vision “to contribute to community as a trusted leading financial group.” HFG also reached out to regions and neighbors in need through strategic social contribution programs in 2013.

Social Contribution Organization

HFG puts social contribution into action through social contribution foundations and volunteering corps formed by employees. In order to practice socially responsible management that is system-atic and executable, HFG launched the Committee for Sharing Happiness in April 2013 besides the existing exclusive unit for social contribution.

List of Foundations Hana Foundation Hana Smile Microcredit Foundation

KEB Sharing Foundation

Hana Academy

Volunteering CorpsHana Love

Volunteering CorpHana Smile Hope Volunteering Corp

KEB Love Sharing Volunteering Corp

HFG Family Volunteering Corp

Contributing to community as a respected leader in finance

Green, Sharing, Culture

Green

· Environmental clean-up activities · Agreement on the environmental protection · Energy saving

Sharing

· Support for the underprivileged · Support for multicultural families · Talent development· Global social contribution

Culture

· Mecenat activities · Culture sharing · Sports sponsorship

Vision

Theme

● Hours engaged in voluntary activities by Hana

Love Volunteering Corp’s Unit: Hours

2012

2013

34,650

61,062

2012

2013

7,906

8,209

● No. of participants who have made donations

in Hana Love Volunteering Corp’s Unit: No. of people

● Records of donations made in Hana Love

Volunteering Corp’s Unit: KRW million

2012

2013

1,079

1,104

Hana Financial Group •that Shares Happiness

Social Contribution



Special Story II

Growing Together,

Sharing Happiness

2012

2013

11,294

20,165

● No. of voluntary participants in Hana Love

Volunteering Corp’s Unit: No. of people

58

HFG’s Foundations

HFG runs 4 foundations, that is, Hana Foundation, Hana Smile Microcredit Foundation, KEB Shar-ing Foundation and Hana Academy, practicing specialized and proactive social contribution.

Hana Foundation

Hana Foundation is established through the joint contributions of Hana Bank, Hana Daetoo Se-curities, Hana IB Securities and Hana Capital. The purpose is to resolve the social issue of low birth rate and an aging population. The foundation strives to resolve social issues in a proactive manner by building and running care facilities for the elderly such as Hana Care Center, and infant/baby-care facilities including childcare centers. The Hana Foundation also initiates various other social welfare projects.

Hana Smile Microcredit Foundation

Hana Smile Microcredit Foundation was initiated to pave the way for the social and economic self-sufficiency of the financially vulnerable who cannot access banks easily due to their individual credit status. HFG operates microcredit projects as one axis of the government’s microcredit proj-ect as a part of its citizen support policy, thus expanding the scale of microcredit projects.

KEB Sharing Foundation

KEB Sharing Foundation is the first charity foundation for public interest established for the first time in the financial industry in December 2005. Systematic and long-term social contribution programs are up and running centered on international outreach activities in the humanitarian aspect. HFG strives to establish the spirit of sharing by putting social contribution into action by spearheading the endeavors for spreading love and carrying out management activities based on principles of sharing.

Hana Academy

As part of its corporate citizenship program, HFG established and runs the Hana High School to resolve essential social needs and setbacks by providing education facilities to the needy. Hana Academy provides curricula necessary to cultivate students as mature members of the society, while providing them with necessary education and knowledge to help them in attaining a college degree. The academy also proactively fosters their linguistic skills and characters which are neces-sary attributes in this age of globalization.


Hana Foundation www.hanafoundation.or.kr

Hana Smile Microcredit Foundation www.hanamiso.org

KEB Sharing Foundation www.kebfoundation.org

Hana High School www.hana.hs.kr

Together Hana, HFG’s Social Contribution Website

HFG runs the “Together Hana”, a website for social contribution. The website serves as a

communication channel for HFG’s social contribution activities,

Together Hana www.hanacsr.com

Hana Case Review


HFG’s Volunteering Corps

HFG runs 4 volunteering corps, that is, Hana Love Volunteering Corp, HFG Family Love Volunteer-ing Corp, KEB Love Sharing Volunteering Corp and Hana Smile Hope Volunteering Corp., which help in putting various social contribution activities into action.

Hana Love Volunteering Corp

Hana Love Volunteering Corp is a volunteering group in the group level of HFG, launched in 2007 by integrating in-house volunteering groups. Employees of HFG form teams consisting of 5 and more employees, taking part in the corp. New volunteering activities are undertaken from planning activities to actual voluntary participation in the programs. In 2013, activities were conducted 290 times and 5,500 employees took part in the act of warm-hearted sharing with community and neighbors.

Areas of Volunteering Activities

Volunteering with Community Engagement

Others Volunteering to Protect the Environment

Family Volunteering Activities

Activities of sharing for the underprivileged including the elderly living alone, the dis-abled and the lower income group

Making bags and T-shir ts for children abroad, drawing sneakers, etc.

Conducting steady eco-friend-ly activities to preserve the environment

Activities of sharing with the engagement of employees, families and customers with their children and families Activities of Hana Love Volunteering Corp

Activities of Family Love Volunteering Corp

HFG Family Love Volunteering Corp

HFG regularly conducts specialized volunteering programs by launching the HFG Family Love Volunteering Corp in February 2013: The corp provides childcare in residential areas mostly par-ticipated by spouses of employees, care of the physically vulnerable, and mentoring of women in multicultural families. HFG strives to spread love to more neighbors by expanding the scope of volunteering by continuously launching region-specific volunteering corps.

Status of Launching Regional Groups of Family Love Volunteering Corp in 2013

February 2013 April 2013 June 2013

Launching

Gwacheon and

Songpa Volun-

teering Corps

Launching Ilsan,

Seodaemun, Eun-

pyeong and Mapo

Volunteering Corps

Launching

Gangnam,

Seocho and

Seongnam

Volunteering

Corps

Launching

Daejeon, Busan

and Gwangju

Volunteering

Corps

Launching

Daegu Gyeongbuk

Volunteering Corp

October 2013 December 2013


Social Contribution



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Growing Together,

Sharing Happiness

60

Activities of Hana Smile Hope Volunteering Corp

Love Sharing Volunteering Corp

KEB Love Sharing Volunteering Corp is a volunteering corp consisting of employees and their families at KEB, conducting social contribution activities to reach out to those in need. It was established by KEB Sharing Foundation, a non-profit charity organization established for the first time in the domestic banking sector in December 2005, unfolding wide-ranging volunteering activ-ities. KEB Love Sharing Volunteering Corp has 2,300 volunteers as of November 2013 to conduct various volunteering services. In 2013, 559 students received scholarships through scholarship programs as part of the expanding scope of volunteering activities.

Major Projects

Hana Smile Hope Volunteering Corp

Hana Smile Hope Volunteering Corp was launched in July 2010 to facilitate the economic and social self-rehabilitation of people with low income and low credit through a soft launch of mi-crocredit programs, conducting wide-ranging activities to share talent. It carries out activities to discover customers for microcredit service, and to target microcredit recipients, helping to maintain stability in the business. Sharing of talent is another activity Hana Smile Hope Volunteering Corp is performing.

Areas of Volunteering

Expert knowledge Other areas Extension of a helping hand Talent sharing

Management, legal af fairs, consulting on taxation (ac-counting), training, marketing and PR

All areas where one’s “talent and k now le dge” c an be shared

Events, PR, administrative work, business support and other services requested by recipients of microcredit

Shar ing of know-how on functions, ski l ls, manage-ment, sales and revenue in-crease in each business field

Scholarship program

Support for child welfare

Other social welfare projects

Support for low income people

Volunteering for community

International rescue

Spread of the culture of sharing (donation)

Major Projects

KEB Love Sharing Activities



Green Activities

HFG performs numerous activities to protect the environment, making a healthy society, and spearheading the efforts to preserve green space for people.

2013 Major Green Activities

Seed Bank Garden In April 2013, HFG formed the Seed Bank Garden, a sustainable garden to implement the social responsibility of proactive environmental protection. Proactive efforts take place to preserve the nature and prepare for the future by creating a seed tower containing 200 types of seeds, a garden where recycled materials were used, and containers where fallen leaves are gathered to be used as fertilizers.

Agreement to Sponsor the Suncheon Bay Garden HFG signed an agreement to sponsor the Suncheon Bay Garden, and sold the 2013 Suncheon-Bay Garden Savings to offer donations and protect the garden. The agreement was extended in November. HFG extended 0.1% of the average balance per year of the amount subscribed for the “Love Savings for Suncheon Bay Garden” jointly developed with Suncheon City. Its subscribers were guaranteed to receive benefits of a price discount for Suncheon Bay Garden, Suncheon Bay and the castle of Nakan Eupseong.

Making Namsan Green In September 2013, employees of HFG including those of Hana Bank and KEB voluntarily par-ticipated in environmental cleaning activities including removing vines and weeds in the Namsan Botanical Garden. HFG plans to hold such cleaning and sharing activities at the group-level as well.

A Campaign to Paint Tree Benches for Seoul Forest Hana Love Volunteering Corp as one of the volunteering corps of HFG conducted maintenance work for tree benches to prevent the deterioration and weathering due to forces of nature. The 130-strong corp including 51 family members of employees expressed their gratitude to nature by removing pollutants and painting preservatives around the benches.


Suncheon Bay Garden Sponsorship Signing Ceremony

Opening Ceremony for the Seed Bank Garden of Suncheon Bay Garden

The Pebble Garden located in the mid-dle of the Seed Bank Garden consists only of drought-tolerant plants, which can survive throughout the 4 seasons except during a severe drought.

A Garden Created with Water Shortage in Mind

Recyclable materials such as drum containers and cargo containers were used for all structures including flower pots, snack bars and seed banks.

A Garden of Recycling

The Seed Bank Garden was designed to obey the cycle of nature so that nothing is wasted but is instead gener-ated into energies.

A Garden of Sustainability


Social Contribution



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Sharing Happiness

62

Sharing Activities

We have neighbors around us who are in need of help: low-income families and multicultural fami-lies. HFG seeks to create happy neighbors and communities through the act of sharing.

Support for the Underprivileged

Hana Love Fund Employees of HFG mobilize the Hana Love Fund by voluntarily donating a portion of their wages to complete corporate social responsibilities. The fund is used for underprivileged children, youths, and the elderly in need of community help. It is also utilized for environmental protection.

Hana the MatchingHFG has run a matching donation program titled “Hana the Matching” since 2011, encouraging employees to take part in social contribution and forming a culture of sharing. “Hana the Matching” is a program to donate the amount which matches the donation amount of employees to NGOs in communities to reach out to the underprivileged.

Cultivation of Microcredit Financial ConsultantsHFG runs a training course for promoting financial consultants on microcredit in order to support self-sufficiency in their work to make them capable of providing customized financial consulting. In 2013, professional consultants consisting of 18 retirees in the financial sector completed the course. They were then appointed to the Hope Financial Plaza, providing professional consulting services on diverse topics: identification of the household cash flow, analysis of the causes for debts, introduction of deposit products for the financially vulnerable, conversion from high interest rate loans and measures to utilize microcredit programs.

Construction of Hana Center on Yeonpyeongdo IslandHana Bank constructed “Hana Center”, a civic-military multi-functional welfare facility, for the con-venience of soldiers & their visitors, and local residents. As the center is equipped with accommo-dation facilities and convenience stores, it is expected to contribute to higher welfare of soldiers and local residents.


A completion ceremony for the consultants of the Hope Fi-nancial Plaza

A completion ceremony for Hana Center on Yeonpyeongdo

Type Unit 2012 2013

Donation Case 1,087 1,715

Donor agencies for the matching No. of agencies 179 132

Amount for the matching KRW 438,281,807 342,502,770

The regular amount of donation from wages dropped com-pared to 2012, and as the amount of special donations and one-time donation decreased, the total donation amount went down.

2012

2013

216

210

2012

2013

3,791

3,825

● No. of participants in the Hana Love Fund

Unit: No. of people

● Total amount of donation for

the Hana Love Fund Unit: KRW million


Award ceremony for 2014 KEB Multicultural Family Award

Award ceremony to present 2014 Scholarship Certificates

Seminar on the Multicultural Education Content

Multicultural Support

Multicultural Support Projects HFG carries out continuous projects for multicultural neighbors to have a stable arrival and create awareness about them. Under the program of “Hana Kids of Asia,” children’s books in Korean and a foreign language are produced and distributed. Children from multicultural families are encour-aged to form a healthy sense of identity. “Darin”, the Hana multicultural center is up and running to provide programs such as courses in economics, finance and cookery for children around the world. As such, multifaceted efforts are underway to support multicultural families.

Seminar on the Multicultural Education Content Seeking to enhance capacities to embrace multiple cultures by raising their level of understanding, HFG held a seminar to organize and produce content jointly with Korea Student Aid Foundation and Center for Multicultural Education. This educational content reflecting the expertise of multicul-tural specialists and voices from practitioners in education will be used as a program aligned with Korean and social studies subjects in the upper grades in elementary schools.

2014 KEB Global Scholarship and KEB Scholarship for Multicultural Wives HFG offers KEB Global Scholarship and KEB Scholarship for Multicultural Wives to support uni-versity students of low income families in developing countries and female students in multicultural families. The scholarship which enhances one’s pride in the country is provided by the KEB Sharing Foundation and was given to 20 foreign students studying in Korea in a total volume of KRW 40 million, and 24 female students from multicultural families in a total amount of KRW 35 million in 2014. HFG will continue to cultivate global talent by steadily scaling up the extension volume.

Support for North Korean Defectors

Support for Excellent Mentors among North Korean Refugee YouthsSeeking to contribute to the global multicultural society, HFG selected 100 competent multicultural mentors among university students who are affiliated with Korea Student Aid Foundation, and offered scholarships and training to them. The students carried out diverse activities to hand over their know-how on multicultural mentoring and improving the awareness about multicultural peo-ple so that the public could have a mature awareness about them.

Support for an Alternative School for SaetominKEB Sharing Foundation, one of HFG’s foundations, sponsors Yeomyeong School, an alternative school for youths who escaped from North Korea to move to South Korea (called “Saetomin” in Korean).The Foundation helps them adapt to and settle in the Korean society. Yeomyeong School was the first alternative school in Korea which got its diploma legally recognized in 2010. 87 stu-dents are registered at the school currently and HFG has sponsored their breakfast and physical education activities. In 2013, HFG offered subsidies for a project to relax the body and mind of youths who defected from North Korea and develop customized basic materials for them.

93 recipients KRW 239 million

KEB Global Scholarship accumulated as of 2014

49 recipients KRW 69.5 million

KEB Scholarship for Multicultural Wives accumulated

as of 2014


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64

Talent Development

“Jack and the Magic Wallet”– Hana’s Children’s Musical on Economic Education Hana Bank has run children’s musicals on economic education for children to develop a proper sense of economics. “Jack and the Magic Wallet” whose motif is “Jack and the Beanstalk” was held in 40 elementary schools nationwide and garnered positive feedback from children and their parents.

Business Agreement with Seoul Metropolitan Office of Education on Job School Hana Bank signed an “agreement to form the basis to attain happy education” with Seoul Metro-politan Office of Education to support students wishing to work in the financial industry. As a result, middle school students can visit Hana Bank branches for hands-on experience to enhance their understanding of bankers and foster their dream.

Global Social Contribution

Agreement with the Red Cross Youth KEB held a ceremony to offer special donations for the Red Cross Youth (RCY)’s 60th anniversary, and intensified its ties with it to practice global social contribution activities. KEB jumped on the bandwagon for conducting projects to foster youth to become global leaders and facilitate global peace: “2nd Model Red Cross Conference” & “International Sharing Camp”, “1st Hope Windmill SR Sharing Road,” and “Global Peace Concert” are a few of the programs conducted with this purpose in mind.

Support for the Construction of a Multi-purpose Education Center in the Philippines KEB constructed a multi-purpose education center for emergency rescue of victims of the ty-phoon disaster in the Philippines. The center also works towards the eradication of poverty and self-sufficiency of the community. The center was built in alliance with KOICA (Korea International Cooperation Agency) and Habitat Korea. 5 more centers are expected to be completed in August 2014. KEB also extended USD 100,000 along with KOICA in the form of a matching fund, and plans to scale up social contribution for the international community.

Donation to Myanmar under “Happy Sharing”In May 2013, HFG conducted the “Happy Sharing” program whereby clothes, toys, PCs and the like were donated by employees and customers and donated to 16 local educational institutions and orphanages in Myanmar. The program has been in operation since 2010 as a goods donation activity targeting overseas impoverished areas including Timor Leste, Myanmar and Mongolia. In the program, 5 employees known to excel in volunteering at HFG visited the local sites, donating 7,250 pieces of goods and 50 PCs to Ba Ka Tha (All Burma Federation of Students Union), a non-profit educational institute, and visiting impoverished areas for voluntary services.


Business Agreement with Seoul Metropolitan Office of Educa-tion on Job School

“Jack and the Magic Wallet” – Hana’s Children’s Musical on Economic Education

Support for the Construction of a Multi-purpose Education Center in the Philippines

Donation to Myanmar under “Happy Sharing”


Cultural Activities

HFG recognizes that a prerequisite for a healthy society is a healthy culture and is thereby striving to share a healthy culture with citizens.

Major Cultural Activities in 2013 and 2014

Hana Classic AcademyHana Classic Academy is one of HFG’s major cultural activity ventures. The Academy selects a new theme for each season of students, and carries out a music course and performance accord-ingly. It has been widely accepted by its members as the re-enrollment rate of the existing mem-bers is over 70%. HFG has run Hana Classic Academy for 14 years from October 2000, taking the lead in creating a healthy culture by offering opportunities for the Hana family to appreciate a wide range of music.

Signing of a Sponsorship Agreement with Seoul Philharmonic OrchestraHFG has sponsored major performances of Seoul Philharmonic Orchestra for 9 years since 2006. HFG signed a sponsorship agreement with Seoul Philharmonic Orchestra, facilitating the develop-ment art and culture among the people

Contest for Hana Calendar Design In order to support rookie designers in their creative artwork, Hana Bank organized a design con-test for the 2014 Hana Bank desk calendar under the theme of “Green Together, Healthy Green.” The contest has been underway since 1997 amid a great interest among emerging designers. In the 2013 contest, a total of 600 artworks were submitted, and winners were exhibited in the outdoor exhibition venue of the main building of Hana Bank, Hana Bank’s website and contest website.

Sponsorship for the DMZ Korean International Documentary FestivalKEB has organized and sponsored the “5th DMZ Korean International Documentary Festival” for 2 years in a row since 2012. KEB has strived to spread the values of peace, life and communication embedded in the Demilitarized Zone (DMZ). A congratulatory performance and a ceremony to award sponsorships were held in the main branch of KEB, jumping on the bandwagon to develop the film industry and pursue the values of DMZ.

Sponsorship for the 2014 Brazil World Cup Since 1998 Hana Bank started sponsoring the Korea Football Association and the national football team and HFG has rooted for the future of the sports industry in Korea for 17 years. Hana Bank and KEB launched time deposit & savings products aligned with sports, offering a preferential interest rate of maximum 0.3% p depending on the scores of the national football team. The two banks sponsored the team’s tryout match as a title sponsor, and also sponsored the match with Tunisia and the one with Gana. They also conducted various sponsoring activities jointly with Korea Football Association, including the operation of a media center titled “Hana Bank Korea House.” Moreover, a public campaign of “You are my Hero” was in place to cheer for Korean soccer players by shedding a light on the less well-known non-national players of the team.

Sponsorship ceremony for Seoul Philharmonic Orchestra

Ceremony to present sponsorships for the 5th DMZ Korean International Documentary Festival

Ceremony to present an encouragement bonus to the national football team to wish for the excellence of the team during the World Cup


Social Contribution



Special Story II

Growing Together,

Sharing Happiness

SPECIAL

STORY IIModu-Hana Day

November 11 was designated by HFG as “Modu-Hana Day” (a catch phrase in Korea meaning “the day everyone becomes one) under the theme of “Hana.”(meaning “1” in Korean) Massive volunteering activities and diverse campaigns take place with the intent “to become ‘one’ with neighbors, colleagues and the world through sharing and consideration.” In 2013, CEOs, employees and volunteers of affiliates under HFG participated in the “Modu-Hana Day” campaign for 2 months, sharing the spirit of sharing.

Key Themes and Major Activities of the 2013 Modu-Hana Day

2013 Modu-Hana Day Campaign

Sharing Festival

HFG’s “Red Mailbox Campaign”

Provision of Health Management Services for HFG’s Employees

Construction of In-house Childcare Centers

To Become “One” with Colleagues

Making Kimchi for the Impoverished

One-Person One-Sharing Activity

Sharing Activity with Customers

To Become “One” with Neighbors

Happy Sharing

Global Volunteering Activities

Construction of Hana Makalu Human School

To Become “One” with the World

Details of Theme-specific Activities of the 2013 Modu-Hana Day Campaign

Making Kimchi for the Impoverished

Delivering “kimchi” made of 11,111 heads of cabbage to the 1,111 people in financial need including the elderly living alone and families headed by grandparents. The project was undertaken by 1,111 people including HFG employees, multicultural families and Family Love Volun-teering Corp

One-Person One-Sharing ActivityConducting the “one-person, one sharing” and “one-branch, one-shar-ing” activities within HFG during the campaign period

Sharing Activity with Customers

Providing opportunities to volunteer during the Modu-Hana Day cam-paign period for customers of HFG that cannot take part in volunteering due to a lack of information and opportunities despite their willingness to do so

Sharing Festival Exchanging information about diverse cases of sharing activities participated by HFG’s employees and volunteering institutes (facilities, centers, etc.), and selecting & awarding excellent volunteering teams

HFG’s “Red Mailbox Campaign”Operating the Red Mailbox within HFG for employees to share their heartfelt messages on gratitude and love

Provision of Health Management Services for HFG’s Employees

Adopting a health management program for employees to create a healthy corporate culture for health management

Construction of In-house Childcare Centers

Establishing childcare centers in an annex building of HFG in Euljiro, Anam-dong and Ojeong-dong in Daejeon in 2013

Happy SharingDelivering toys and school supplies to children in impoverished areas in 11 countries around the world

Global Volunteering Activities

One Volunteering in One Subsidiary, One Branch and One Department of HFG (“One Company, One Village” campaign in China, and volun-teering activities in Indonesia, Hong Kong, New York, LA, Canada, Brazil, Germany, Australia, etc.)

Construction of Hana Makalu Human School

Establishing a school for children in a remote high mountain area in Nepal which has no other education facilities

To Become “One” with Colleagues

To Become “One” with the World

To Become “One” with Neighbors

Theme Activities

66

HFG’s 2013 Modu-Hana Day Highlights

The 2013 Modu-Hana Day Campaign held under the theme “to become ‘one’ with neighbors, colleagues and the world through sharing and consideration” came to an end on January 11, 2014. The large-scale campaign took place for 2 months from November 11, 2013 and had participation from 25,000 employees and their families at home and abroad, unfolding a beautiful story on the sharing of love.

Photo Highlights of the 2013 Modu-Hana Day

1. Happy Sharing, supporting Myanmar

2. Making “kimchi” to reach out to the underprivileged

3. Volunteering for cleaning up activities to form

an ecological environment within Seoul Forest

4. Providing support for the Yanjing sobaek public school in

Beijing by Hana Bank China and KEB China

5. Conducting the Red Mailbox Campaign

6. Organizing the Modu-Hana Day Opening Ceremony

1

5 6

2 3 4

Statistics on the 2013 Modu-Hana Day Campaign

A beautiful magic of making “one” world with “one” heart

No. of applications for the matching

1,715 No. of recipient institutions 132

Amount KRW 342,502,770

Hana the Matching

No. of participants

8,209 Amount

KRW 1,102,017,633

Donations

No. of supplies donated

1,860

Supplies Donated

Happy

Sharing

No. of participants

19,471Total participating hours

60,041

Volunteering

The above statistics only include the records on volunteering and donation during the Modu-Hana Day period


hAnA network

03

Hana Financial Group

Hana Network

HFG strives to enhance synergies with the team spirit of being “one family”, reduce unnecessary waste and cater to customer needs. HFG will grow into a healthy financial group that grows together with all stakeholders and shares happiness with them in trust based on cooperation that transcends the interest at stake, while securing global competitiveness.

Cooperating as a One Financial Group

HANA NETWORK

Cooperating as a One Financial GroupCooperating as a One Financial Group

70

71

72

73

74

75

76

77

78

79

80


HFG signed a business agreement to support the financially vulnerable including customized financial consultation with Korea Asset Man-agement Corporation. 15 Hope Financial Pla-zas of HFG are to provide one-on-one financial consulting services nationwide through its mi-crocredit portal website of “Microcredit Inter-change” for the financially vulnerable through the agreement.

Supporting the Financial Vulnerable

HFG carries out diverse social contribution ac-tivities by running the Family Love Volunteering Corp. Starting with the launching ceremony in February 2013, the Family Volunteering Corp was launched by region including Songpa, Gyeonggi Gwacheon, Ilsan, Seodaemun, Daejeon, Busan and Gwangju. They practice region-specific volunteering aligned with volun-teering centers.

Launch of the Family Love Volunteering Corp

In April 2013, HFG offered KRW 20 million as a sponsorship to “Inkangwon”, an institute for the disabled on the Day of People with Dis-ability. The institute is a social welfare organi-zation accommodating 78 people with severe disabilities. The donations were to support their counseling therapy and job counseling, thus contributing to stronger welfare for the disabled.

Sponsoring of Institutes for the Disabled

Hana Financial Group Inc.

“A Healthy Financial Group Equipped with Genuine Competencies”

The essence of the financial industry is trust. HFG puts the top priority on the happiness of customers, knowing that trust in a financial company is built up when customers feel genu-inely happy. HFG will build up solid trust with all stakeholders including the society, neighbors and community.

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

· January 2013· February 2013· February 2013· June 2013· September 2013· September 2013

HFG, exchanging stocks with KEBChairman Jung-Tae Kim, winning the Best Prize in Korea’s Best Banker Award1st Graduation Ceremony Organizing HFG’s declaration ceremony for “Healthy Responsibilities through the Moral Rearmament”Opening of HFG’s Uljiro Puruni Childcare Center HFG, winning the “Strongest Bank in Korea” by The Asian Banker

Date of Establishment December 1, 2005 Tel. +82-2-2002-1110

Number of employees 110 (as of December 2013) Homepage www.hanafn.com

Location of HQ 55 Euljiro, Jung-gu, Seoul

Volunteering in Bappeo(Meal Service) in Dail Community

Launch ceremony of HFG’s Family Volunteering Corp Offering of sponsorship fees to Inkangwon

Chairman Jung-Tai Kim of Hana Financial Group


Employees of Hana Bank started to form a fund for the Love Sharing activities by volun-tarily donating a certain percentage of monthly wages to fulfill corporate social responsibilities. The fund is jointly managed by the labor and the management, and is also used to support social welfare facilities, multicultural families and teen heads of household.

Love Sharing Fund

Hana Bank donated reusable PCs, laptops and mobile phones to domestic social welfare centers in the country and in similar centers in Vietnam and Myanmar. In 2013, Hana Bank donated goods and money worth about KRW 120 million generated from the sales proceeds of rare metals from used mobile phones and 2,703 units of PCs and laptops.

Offering Ceremony of Love Sharing

“Hana Kids of Asia” was designed to devel-op talents in children of multicultural families. The program has been up and running for 6 years in Seoul, Ansan, Incheon and Bucheon and provides training on the Korean culture and language. “Darin”, the Hana Multicultural Center, was opened in Samseongyo Branch of Hana Bank in 2011 as a platform for com-munication for multicultural residents, offering diverse multicultural programs.

Hana Kids of Asia

Hana Bank

“Joy of Customers,Only towards That Goal”

Hana Bank has achieved an exponentially high growth as a result of striving to provide prod-ucts and financial services according to customer demand and market demand by maintain-ing the customer-centered and market-oriented perspective amid changes in the financial environment. Hana Bank promises to serve customers by putting in utmost efforts as a bank that brings “Joy of Customers, Only towards That Goal.” Hana Bank will fulfil social responsibilities based on corporate citizenship, while steadfastly attaining principle-based management as a member of the society.

Date of Establishment December 1, 1959 Tel. +82-2-2002-1111

Number of employees 9,045 (As of December 2013) Homepage www.hanabank.com


Donation of funds for “Happy Sharing” Offering PCs as part of the Ceremony of Love Sharing Field trip experience for children of multicultural families

Hana Network • Hana Financial Group INC.

Hana Bank

KEB


Hana SK Card

Hana Life

Hana Capital


Hana I&S

Hana Asset Trust

Hana Savings Bank

Happy Hana,

Hana Network

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

· April 2013· July 2013· July 2013· September 2013· September 2013

· October 2013· November 2013

Selected as “Best Loved Brands of Korea” in the private banking sector for 2 consecutive years Won the presidential prize at the 13th Korea Digital Management Innovation AwardsSelected as “Best Bank in Korea” by the EuromoneyWon the Grand Prize at the 2nd Financial Consumer Protection AwardsWon the Grand Prize at “2012 KCCIㆍForbes CSR Award” in the multicultural family support category for 4 consecutive years Selected as the “Best Private Bank in Korea” for 3 consecutive years by The Banker and PWMWon the presidential commendation at the “Ceremony to Celebrate 7th Anti-Money Laundering and 12th Anniversary of the Foundation of FIU”

President & CEO of Hana Bank, Jong-Jun Kim


KEB Sharing Volunteering Corp conducted the Love 10-1004 Campaign, a regular sponsor-ship system whereby over KRW 10,040 is do-nated, which is ten(10) times more than KRW 1,004 (the word “one thousand four” means “an angel” in Korean). By the end of 2013, nearly 47% of all employees at KEB took part in the campaign, donating over KRW 800 mil-lion to KEB Sharing Foundation.

Love 10-1004 Campaign

KEB has conducted the One Company One Mountain campaign for 20 years since 1985. In April 2013, KEB employees visited Namhan Mountain Fortress. Cleaning activities took place in places in Seoul including Namsan and Myeongdong to collect waste and remove weeds, making a healthy environment for all.

Campaign for Mountain Clean

KEB signed an agreement to sponsor the “2014 Dream Program.” The program aims for social contribution, serving as one of the pledges of Gangwon Province to host the 2018 Pyeongchang Winter Olympic Games. It is a global sharing program to offer oppor-tunities to experience winter sports by inviting foreign youth from countries where there is no snow.

2014 Dream Program

KEB

“A Bank that is Devoted for the Success of Customers”

KEB as “Korea’s No.1 Global Bank” is Korea’s top notch bank in fields such as foreign currency

exchange, trade finance and overseas network services. KEB makes utmost efforts to be a global

financial group that excels in all financial services as a member of HFG. KEB is committed to pro-

viding optimal products and best financial services with conviction “to devote itself for the success

of customers as a financial specialist trusted by customers.”

President & CEO of KEB, Han-Jo Kim

Love 10-1004 Campaign Poster Conducting clean-up for Namhan Mountain Fortress under the One Company One Mountain Campaign

Signing a sponsorship agreement for the “2014 Dream Program”

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

Date of Establishment January 30, 1967 Tel. +82-2-1544-3000

Number of employees 7,838 (As of December 2013) Homepage www.keb.co.kr


· May 2013· September 2013· September 2013

· September 2013

· November 2013· November 2013

Opened the Istanbul Office in Turkey for the first time as a domestic bank Awarded the “Korea’s Best Foreign Exchange Bank” prize for 6 consecutive years by the FinanceAsiaAwarded the “Korea’s Best Foreign Exchange Bank” for 12 consecutive years by the Global Finance, and “Best Sub-custodian Bank” for 3 consecutive yearsAwarded the “2013 Korea’s Best Cash Management” service provider and “2013 Korea’s Best Foreign Exchange Bank” by the AsiamoneyOpened the Fukuoka Office in Japan Opened the Xiqing Branch


Hana Daetoo Securities signed a business agreement with Community Chest of Korea to form a donation fund so that a portion of rev-enues and commission fees generated from financial products could be donated in the name of customers. Hana Daetoo Securities participated in the joy of sharing with custom-ers through the signing of the agreement.

MOU for Raising Donation

Employees in the derivatives unit in IB Division at Hana Daetoo Securities signed a sister-hood agreement with Love House in Sang-gye-dong in 2010. Monthly donations and one-time donations are extended to sponsor elementary, middle and high school students in Study room. Steady sponsorships for summer camps and film viewing events are offered to enable healthy growth of students.

Supporting Love Study Room

The “Sharing Library” which is filled with books voluntarily donated by employees offered 843 books and bookshelves to the Blue School established for children of low-income families. Hana Daetoo Securities is expected to contin-uously donate books to help in the emotional and knowledge development of children.

Book Donation Event

Hana Daetoo Securities re-aligned its vision from the existing “The Power of Hana Daetoo Securities” to “A Trusted Financial Solution Partner” in line with a new vision and mission.


CEO of Hana Daetoo Securities, Seung-Chul Chang

“A Financial Partner Trusted by Customers”

Hana Daetoo Securities continues to move towards innovation for customers by introducing new

PIB strategies, recently integrating AM and IB categories, and forging cooperation between retail

banking and corporate banking. Cross-affiliate collaboration takes place across business areas

ranging from comprehensive asset management services for retail customers to corporate finance

services such as retail finance, acquisition finance, structured finance and M&A. Hana Daetoo Se-

curities will provide such comprehensive services through collaboration with affiliates of HFG, serv-

ing as a partner that sides with customers’ success, and making strides to develop into Korea’s

leading large-scale comprehensive securities company.

A Trusted Financial Solution Partner

A Premier WM House / A Top Quality IB In Asia

Vision 2025

2025 Strategy Goals

Top-notch competitive-

ness in WM

A stronger presence

in overseas market

Differentia-tion in

IB service

Leader- ship in the financial

investment market

Optimization of customer

contact points

Training on developing correct moral mindset in Banpo Branch

Volunteering to “share briquettes” with people in Gu-ryeong Village

Delivering books from the “Sharing Library” donated by employees


Hana Bank

KEB


Hana SK Card

Hana Life

Hana Capital


Hana I&S

Hana Asset Trust

Hana Savings Bank

Happy Hana,

Hana Network

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

Date of Establishment January 18, 1977 Tel. +82-2-3771-7114

Number of employees 1,273 (As of December2013) Homepage www.hanaw.com

Location of HQ 82 Uisadangdaero, Yeouidodong, Yeongdeungpo-gu, Seoul


Hana SK Card conducts the “Greeting” Cam-paign, one of the “Together” Campaign to practice the “responsibility for mutual respect.” In the “Greeting” Campaign, employees that are greeted first are to attach a sticker on the “Greeting Coupon” of the other party. It helps to create a vibrant corporate culture driven by cross-departmental communication.

“Greeting” Campaign

Along with KEB, Hana SK Card signed an agreement to donate card mileage points to ChildFund Korea. Under the agreement, Hana SK Card users can donate their mileage points even at a minimal amount of KRW 1 per point.

Agreement with ChildFund Korea

In 2013, as in 2012, Hana SK Card select-ed one entity with a strong commitment for self-sufficiency among microcredit recipients, and reopened it through the voluntary talent donation of Hana SK Card for about 3 months. The CEO of Hana SK Card, Hae-Boong Jeong and all the employees supported the self-employed to stand up again by engaging in business district analysis, menu & recipe de-velopment, improvement of the indoor interior design and marketing.

Talent Donation

Hana SK Card

“A Company that Cherishes to Keep and Act out Promises with Customers”

Hana SK Card has positioned itself as a leader in the mobile card sector through rapid growth

since its foundation in 2009. What made it possible was its “principle of putting the top priority on

the customer value.”

Based on the “principle of putting the top priority on the customer value”, Hana SK Card will strive

to seek for and offer products and services according to customer requirements, and also pursue

and achieve a management culture customers are satisfied with. As such, Hana SK Card will do

the utmost to serve as a company that customers trust and are happy with.

In line with HFG’s new vision and mission, Hana SK Card changed its vision from “A World Best Convergence Marketing Company” into “A Smart Financial Innovator that Leads a Smart Life.”

A Smart Financial Innovator that Leads a Smart Life

S.M.A.R.T 2025 !!!

Vision as a Card Company

Strategy Goals

Strategic Initiatives

Scale

Achieving the economies of scale in

the card busi-ness

Toward Global

Dominating the global payment market

Renovation

Business Innovation

Ability

Intensifying core compe-

tencies

Mobile Leader

Dominating the market of the future

which is mobile based

payment

“Greeting Coupon” in the “Greeting” Campaign Signing of an agreement with ChildFund Korea Signing of an agreement with CARE (Coexistence of Animal Rights on Earth)

Date of Establishment November 1, 2009 Tel. +82-2-6399-3000

Number of employees 454 (As of December 2013) Homepage www.hanaskcard.com

Location of HQ 24 Namdaemunro, 9-gil, Jung-gu, Seoul

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

CEO of Hana SK Card, Hae-Boong Jeong


Since it’s foundation in 2007, Hana Life’s in-house volunteering club named “Plus Hana” has engaged in volunteering activities to sup-port the underprivileged. In 2013, Hana Life was engaged in serving food,volunteering and offering 300 pieces of thermal underwear at “Dasiseogi Center,” a center to support the homeless. The target scope of volunteering organizations was expanded to offer cultural hands-on experiences for families headed by grandparents and replace obsolete computers.

Plus Hana

The “Happy Sharing Mini Marathon” was held to mark the launching of the “Non-participat-ing Healthy Whole Life Insurance.” About 100 employees of HFG and citizens took part in the event, completed a total of 102km and ended up raising a fund of KRW 10 million. Hana Life donated the fund to Korea Childhood Leuke-mia Foundation, cheering for the healthy re-covery of leukemia patients.

Happy Sharing Mini Marathon

Hana Life held the Happy Sharing Charity Fair to support children with rare incurable diseas-es. A fund worth KRW 5.07 million through the sales proceeds from the fair and Hana Life’s matching grant was donated to the Korean Children's Association of Rare Incurable Dis-eases.

Happy Sharing Charity Fair

Hana Life realigned its vision from “A Premier Com-prehensive Life Insurance Company” into “A Trust-ed, Advanced and Robust Insurance Company.”

Hana Life

“A Company that is Always with Customers”

Hana Life strives to attain customer happiness based on differentiated product portfolios and

specialized supporting units. Hana Life pledges to serve as a life partner that protects customers’

precious family, dreams and financial stability at all times. To this end, Hana Life continuously puts

into action the inherent functions of insurance, that is, mutual assistance and humanity.

A Trusted, Advanced and Robust Insurance Company

HOPE 2025

Leading the online & smart life insurance market in Korea

2025 Vision

2025 Strategy Goals

2025 Strategic Initiatives

Hana Group Synergy

Synergies

Enhance Brand Power

Brand buildup

Profitable port-folio

Revenues

Open Alliance

Alliance

The Cap Knitting Campaign Blood donation Happy Sharing Charity Fair


Hana Bank

KEB


Hana SK Card

Hana Life

Hana Capital


Hana I&S

Hana Asset Trust

Hana Savings Bank

Happy Hana,

Hana Network

Date of Establishment November 25, 1991 Tel. +82-2-3709-7300

Number of employees 144 (As of December 2013) Homepage www.hanalife.co.kr

Location of HQ 89-31 Seosomunro, Jung-gu, Seoul

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

CEO of Hana Life, In-Hwan Kim


Hana Capital has conducted the “5-Minute Meditation, 10-Minute Reading” Event from February 4. The program is held before starting work to help employees concentrate on their work with a refreshed and healthier mindset.

Meditation & Reading Event

Seeking to fulfil “Healthy Responsibilities through the Moral Rearmament,” Hana Capital conducted training on the prevention of sexual harassment. The training was conducted twice on July 11 and 18, 2013 for all branch employees of Hana Capital.

Preventing Sexual Harassment

Hana Capital conducted the “Hana-Cap Be-coming One” Workshop to facilitate communi-cation among employees in November 2013. In the workshop consisting of group discus-sions and role playing presentations, 100 em-ployees took part.

Workshop for Becoming One

Hana Capital

“Customers’ First Choice, Best Financial Partner”

Hana Capital has positioned itself as a high-yield capital company generating stable revenues

through diversified portfolios since it was incorporated into HFG in 2005. Hana Capital does the

utmost to serve as the ideal financial partner that develops products offering differentiated values

to customers and supports them to attain diverse lifestyles. Hana Capital will fulfil its roles as a

genuine partner that is with customers at all times by continuously practicing social contribution,

while focusing on principle-based management complying with laws and social ethics to protect

customers’ credit information.

Hana Capital recently set its 2025 strategy goal as “STAR 2025” which focuses mainly on the “Sta-ble Portfolio, Top Capital, Aiming at Global, Raise Trust” based on the existing vision of “Customers’ First Choice, Best Financial Partner.”

A Smart Financial Innovator Leading a Smart Life

STAR 2025

Vision

2025 Strategy Goals

Stable Portfolio

Establishing stable portfolios

Raise Trust

Securing trust with customers

Aiming at Global

Accelerating the global presence

Top Capital

Securing a top-notch competi-

tive edge

“5-Minute Meditation, 10-Minute Reading” Event Training on the Prevention of Sexual Harassment Han-Cap Supporters Signing Ceremony

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

Date of Establishment February 13, 1987 Tel. +82-2-2037–1111

Number of employees 197 (As of December 2013) Homepage www.hanacapital.co.kr

Location of HQ 126 Teheranro, Gangnam-gu, Seoul

CEO of Hana Capital, Soon–Woong Choi


Hana Institute of Finance encourages employ-ees to take part in energy saving, and under-takes this as a steady initiative. Hana Institute of Finance is at the forefront of saving consum-ables by utilizing the car pool, banning the us-age of paper cups and emphasizing the usage of reused paper, while stipulating regulations on energy saving.

Energy Saving

Hana Institute of Finance conducts group-based volunteering with each group of 10 em-ployees, delivering heating mats, gifts for tra-ditional holidays and side dishes on a monthly basis for Yeongdeunpo Senior Welfare Center along with its staff, practicing the act of sharing with community.

Volunteer Work

Employees participate in voluntary activities through various club activities. Sharing is prac-ticed by means of hobbies in each club such as a cap knitting club for infants as a part of the Save The Children’s Program, a baseball club to offer baseball goods and books to children from low income households, and a cooking club to volunteer for sharing of cookies with neighbors.

Volunteering Clubs

Hana Institute of Finance realigned its vision from “HFG’s Think Tank & Knowledge Center” into “A Strategic Innovator of the Global Financial Group” in line with HFG’s new vision and missions.


“An Institute that Leads the Development of the Financial Industry in Korea”

Hana Institute of Finance has laid the foundation for HFG to grow as Korea’s iconic financial group

in today’s world through preemptive and in-depth researches based on expertise and research ex-

periences built up for about 30 years. Hana Institute of Finance will play roles as a leading financial

institute that extends company-wide support to reinforce HFG’s core competitiveness and lead the

financial advancement in Korea, while fulfilling functions as HFG’s think tank and knowledge center.

A Strategic Innovator of the Global Financial Group

# 1 Think-Tank & PACE Maker 2025

Vision of Hana Institute of Finance Strategy Goals

Mid-and Long-Term Strategic Initiatives

Partner

A strategic partner of HFG

Expanding

Expansion of core R&D

capacities and roles

Communication

Stronger research com-

munication

Agility

Higher acuity for strategy support

Volunteering in the Salvation Army Victory Welfare Center

Hana Day Toy Making Baseball Club in Hana Institute of Finance


Hana Bank

KEB


Hana SK Card

Hana Life

Hana Capital


Hana I&S

Hana Asset Trust

Hana Savings Bank

Happy Hana,

Hana Network

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

Date of Establishment June 25, 1987 Tel. +82-2-2002-2200

Number of employees 60 (As of December 2013) Homepage www.hanaif.re.kr

Location of HQ 82 Uisadangdaero Yeongdeungpo-gu, Seoul

CEO of Hana Institute of Finance, Hyeon-Kee Bae


Hana I&S visits Shinawon, a welfare center for the intellectually disabled on an annual basis and conducts voluntary activities with its mem-bers. In 2013, 90 Shinawon members and H&S employees took part in visiting a digital aquarium.

An Underwater Adventure with Shinawon

Hana I&S encouraged its employees and their family members to donate blood in the event and share blood donation certificate. Blood donation was done in nearby blood donation centers during the period of the campaign, and certificates were passed on to needy employ-ees, thus reaffirming the meaning of sharing.

Sharing of Blood Donation Certificates

Hana I&S volunteered to do wall painting for Hong Eun Middle School in Seodaemun-gu, Seoul. About 100 employees and their families took part in the program that helped to erase a negative image of the old school. The pro-gram also works towards preventing violence in schools and instilling an emotionally stable ambience.

Wall Painting in Old Schools

Hana I&S

“An IT Partner that Drives New Leaps and Innovation”

Hana I&S has poured in massive investment and efforts in all financial businesses including bank-

ing, securities, insurance and card, while providing more stable and advanced financial IT services.

The business scope includes open source framework, smart financial services, big data-based

generation of the customer value, CRM, SEM and embedded solutions. Hana I&S will make a

higher jump as a globally competitive IT company based on corporate management of value cre-

ation, while advancing into Southeast Asia including China and Indonesia and the Americas to

achieve the initiative in the creative economy as a financial solution provider.

Hana I&S has a vision of becoming “An IT Partner and the Core Growth Engine of HFG.” Accordingly, Hana I&S focuses on securing competencies for IT services, integrating IT operations of HFG and ex-panding the financial market.

An IT Partner and the Core Growth Engine of HFGVision

2025 Strategy Goals

Securing competen-cies for IT services

Expanding overseas developmentand the

financial market

Integrating IT opera-tions of HFG

An Underwater Adventure with Shinawon Planting trees in Noeul Park Healing Sketch

Date of Establishment August 30, 1990 Tel. +82-2-2151-6400

Number of employees 473 (As of December 2013) Homepage www.hanains.com

Location of HQ 32 Hwangsaeul-ro, 312 beongil, Bundang-gu, Seongnam City

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

CEO of Hana I&S, Oh-Dae Kwon


In December 2013, Hana Asset Trust held the “Kimchi Sharing” Event. About 60 employees of Hana Asset Trust and HFG took part to make 1,400 heads of cabbages into kimchi, delivering kimchi and bread to 280 underprivi-leged households.

“Kimchi Sharing” Event

Monthly volunteering activities take place at Hana Asset Trust as a part of HFG’s social contribution activities. A small act of sharing is practiced to those in need at Myeonghwa Social Welfare Center in Suseo through meal serving & delivery and dish washing, etc.

Regular Volunteering Services

Employees voluntarily conduct a campaign to save energy and consumables. The usage of paper cups and color printers are limited while at work. Each Friday of every second week is designated as “Family Day” and employees look around their seats, collecting and recy-cling office supplies that are not used.

Saving Energy and Consumables

In line with HFG’s new vision and mission, Hana Asset Trust set specific strategy goals and mid-and long-term strategic initiatives for the existing vision of becoming “A Comprehensive Real Estate Com-pany Offering Total Real Estate Services.”

Hana Asset Trust

“A Comprehensive Real Estate Company Offering Total Real Estate Services”

Hana Asset Trust is ready to take quantum leaps as Korea’s leading comprehensive real estate

company offering total real estate services by reinforcing expertise in real estate and inculcating

customer trust.

Hana Asset Trust will grow along with the community, by creating a sound corporate culture by

practicing principle-based management focusing on the fundamentals.

A Comprehensive Real Estate Company Offering Total

Real Estate Services

STAR 2025

Vision

Strategy Goals

Mid-and Long-Term Strategic Initiatives

Sustainable Growth

Sustainable growth

Real Estate Business Hub

Real estate business hub

Axis of Group Portfolio

HFG’s core growth engine

Top-notched Expertise

Top-notch competitiveness

Holding the Kimchi Sharing Event Volunteering to provide meals in Myeonghwa Social Welfare Center

Delivering kimchi to the underprivileged


Hana Bank

KEB


Hana SK Card

Hana Life

Hana Capital


Hana I&S

Hana Asset Trust

Hana Savings Bank

Happy Hana,

Hana Network

Date of Establishment June 15, 1999 Tel. +82-2-3287-4600

Number of employees 97 (As of December 2013) Homepage www.hanatrust.com

Location of HQ 512 Teheran-ro, Gangnam-gu, Seoul

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

CEO of Hana Asset Trust, Chang-Hee Lee

Hana Savings Bank’s “Book Exchange Relay” Program was successfully completed thanks to the great interest and support of employ-ees whereby employees exchanged the books they enjoyed with others in their team or branch, and later donated the books.

Successful Closing of the Book Exchange Relay

Hana Savings Bank conducted a campaign to spread the awareness among the public to “eradicate 4 social evils” in and around the main branch of Changshin-dong on Septem-ber 16, 2013. The camapaign was conducted along with Deoksan Police Station and target-ed employees on their way to work and nearby local residents.

A Campaign to Eradicate 4 Social Evils

On March 12, 2014, Hana Savings Bank do-nated 100 bags of white rice for 100 senior citizens to a welfare center for the elderly living alone in Bucheon. Such volunteering activities will be carried on continuously.

Donation of 100 Bags of Rice

Hana Savings Bank

“A Trusted Savings Bank that Leads the Financial Industry”

Driven by a high ethical mindset, Hana Savings Bank has established various infrastructure, differ-

entiated interest rates for deposits & loans, and diversified product line-ups in order to leap higher

as “A Trusted Savings Bank that Leads the Financial Industry.”

Moreover, various social contribution projects are underway to contribute to reinvigorating the

microcredit service, the given role of a savings bank, and fulfil social responsibilities. Utmost ef-

forts will be put in for the bank to develop into an advanced financial institution where employees

listen to customers’ voice at all times, practice sound development of the bank and fulfill social

responsibilities.

Hana Savings Bank changed the existing mission of “A Premier Microcredit Financial Institution Seek-ing for Customer Happiness” into “A Trusted Sav-ings Bank that Leads the Financial Industry” in line with HFG’s new vision and mission.

A Trusted Savings Bank that Leads the Financial Industry

Vision of

Hana Savings

Bank

HIGH (Hi~) 2025

High Profit

No.1 profitability among savings banks in Korea

Healthy Finance

Healthy finance

Growth with Quality

Qualitative growth

Improve Competitiveness

Robust competitiveness

Book Exchange Relay Cooking program conducted for married immigrant women

Volunteering for visits to elderly people

Date of Establishment February 8, 2012 Tel. +82-2-1899-1122

Number of employees 147 (As of December 2013) Homepage www.hanasavings.com

Location of HQ 293 Jongro, Jongro-gu, Seoul

Key

Sustainable

Management

Activities

in 2013

Activities

in 2013

Company

Outline

Major

Management

Activities and

Performance

in 2013

2025 Strategy Goals

CEO of Hana Savings Bank, Jae-Ho Park

Appendix

Principles and Performance for Sustainable Management


GRI G3.1 Index


82

84

86

90

82


Status Quo in Taking Part in the Economic,

Environmental and Social Initiative

Hana Bank joined the UNEP Finance Initiative (UNEP FI) in 2007, an environmental enhancement initiative for global financial institutions along with the UN Global Compact (UNGC) to improve the ethics and environment in the international community.

Response to Climate Change

HFG established environmental management strategies befitting the “financial industry” to jump on the bandwagon of the government’s climate change response and reduction policies. Of particular note, Hana Bank declared itself as “Green Bank on the Move,” engaging itself in various activities including energy efficiency buildup through GHG reduction and formation of an eco-friendly culture.

Current Status of Pension Management

HFG runs a retirement pension system for employees’ stable liveli-hood after retirement. For pension management, HFG selects busi-ness operators with high credit ratings and payment competencies, seeking for stability, profitability and soundness.

● Date of Pension Adoption by Affiliate

Company Date of adoption

HFG June 30, 2010

Hana Bank March 31, 2010

KEB December 31, 2010

New Employees’ Wage Policy

Wages for new employees at HFG is 3 times higher than the statutory minimum wage, and there is no difference in wages by gender. *The statutory minimum wage as of 2012 stands at KRW 1,098,360 (for 226 hours of work per month)

Activities to Support Public Interest and their Effects

Diverse social contribution activities of HFG as a corporate citizen takes place based on themes such as green, sharing and culture to facilitate healthy development and growth of the society.

● Social contribution expenses

Type 2011 2012 2013

Total 658 708 715

Local Procurement Policy

HFG encourages local procurement for goods including office sup-plies and items for events in branches and branch offices to reinvigo-rate the local economy.

Status of Employee Turnover

HFG is growing as a company which employees wish to work for throughout their lives. This is achieved through various activities such as increasing welfare benefits for employees, establishing a healthy corporate culture, adopting a health management program, improv-ing family-friendly programs, striking work-life balance, opening ad-ditional in-house childcare centers and operating a rational perfor-mance evaluation system.

● Trends of Employee Turnovers

Type 2011 2012 2013

Turnover rate 8.0 7.4 5.5

Employees’ Subscription to Collective Bargaining

and Rights to Act Accordingly

HFG strives to create a culture of mutual growth for labor and man-agement, and exercises no influence for employees’ subscribing to the labor union and engaging in its activities.

Health & Safety Policies

HFG established a comprehensive health management system for employees to do their work without any health concerns. The system offers an anti-smoking campaign, reservation service for medical cen-ters or clinics, preferential benefits for uninsured items, 24/7 health consultation and intensive care for cancer patients. Preventive train-ing and campaigns take place against safety accidents that might occur during work to help employees work in a safe environment.

● Trends of the injury rate

Type 2011 2012 2013

Injury rate 0.02 0.03 0.02

Management of the Amount of Paper Used

In 2013, HFG’s rate of paper usage recorded 4,841 tons, down about 33% year-on-year. All employees at HFG will practice environmental management by minimizing the amount of paper used .

● Trends of the paper usage amount

Type 2011 2012 2013

Amount of paper usage 7,509 7,213 4,841

Unit: KRW 100 million

Unit: %

Unit: %

Unit: ton




GRI G3. 1 Index


Appendix

Support for Employee’s Post-Retirement Life HFG ensures continuing to utilize retirees’ experiences and expertise by aligning with “Hana FnA Inc.”, an independent agency completely invested in by retirees of Hana Life.

Childcare Support for Employees and their SpousesHFG runs a childcare leave program to support employees for their childcare, and also continuously expanding the number of in-house childcare centers.

● Status of taking childcare and return to work (as for Hana Bank and KEB)

Type Company Unit 2011 2012 2013

Number of employees taking a childcare

leave

Hana BankNo. of people

789 827 808

KEB 234 259 270

Return rate after taking a childcare

leave

Hana Bank

%

92.5 96.4 97.8

KEB 95.4 90.5 91.3

Rate of work for a year when returning

after a break

Hana Bank

%

97.8 96.4 97.8

KEB 98.4 97.7 96.8

Training on Human Rights Policies and Status of

Taking the Course

Human rights training sessions related to work are included in the eth-ical training at HFG targeting all employees. Intensified human rights training takes place for certain employees depending on their nature of work. Moreover, a security workforce is also regularly trained on HFG’s human rights policies.

Total Expenditures for Investment in Environmental

Protection

HFG makes steady investment in the environment for sustainable growth as an eco-friendly financial group. In 2013, a total of KRW 760 million was invested for environment friendly activities.

Customer Satisfaction Survey

HFG conducts monthly on-site diagnosis surveys and phone-based CSI surveys to identify areas where improvement is needed. Prob-lems are resolved through immediate actions for improvement. This helps in increasing customer satisfaction with HFG.

Information Protection Policies and Responses

HFG strengthened a procedure to prevent information outflow and approval to protect valuable data of customers more thoroughly. In January 2013, the “Task Force for Information Protection” was launched consisting of compliance officers and 11 heads of depart-ments to reinforce the IT security.

● Management for Information Protection

Targets

1. Control over USB release

2. Control over e-mail

3. Control over printouts

4. Reflection of Information Security Index to KPIs

Support for Culture, Arts and Sports

HFG has conducted wide-ranging activities including sponsoring classical concerts and performance & arts so that high-quality cultur-al content could be explored and supported to broaden the horizons to appreciate cultural experiences. Moreover, HFG has generated di-verse values in developing and bringing mass appeal for sports and cultivating athletes by sponsoring such sports as football, handball, basketball and golf. At the center of such sports sponsorships are HFG’s hopes and will to convey a vibrant and hopeful message of hope, integration, challenging spirit and victory to Koreans. HFG in-vested KRW 5.432 billion in 2013 for the development of culture, arts and sports.

Endeavors to Scale up Socially Responsible

Management

HFG has made diverse efforts to spread the interest in corporate so-cial responsibilities (CSR). HFG has published the Sustainability Re-ports since 2006 to transparently disclose HFG’s principles, activities and performance on sustainable management. During the process and procedure of selecting partner companies, HFG also checks out their level of managing the environment, health and safety and prac-ticing ethical management.

84


Foreword

The Korea Management Association Registration and Assessments (KMAR) has been requested by Hana Financial Group verify the contents of its 2013 Sustainability Report (the Report). Hana Financial Group is responsible for the collection and presentation of information included in the Report. Our responsibility is to carry out assurance engagement on the assurance scope stipulated below.

Assurance scope and standard

Hana Financial Group describes its efforts and achievements of the sustainability activities in the Report. KMAR performed a Type 1, moderate level of assurance using AA1000AS (2008) as an assurance standard. That is, the assurance team assessed whether inclusivity, materiality, and responsiveness were observed, and does not include any assertion or reliability of achievements specified in the report. However, the confirma-tion of the application level of GRI G3.1 utilized as the report criteria is included in the scope of assurance. During our assurance engagement, professional judgement of the practitioner of KMAR’s assurance team was exercised as materiality criteria.

Assurance process

In order to verify the contents of the Report within an agreed scope of assurance in accordance with the assurance standard, KMAR’s assurance team visited the Hana Financial Group’s headquarters and carried out an assurance engagement as follows:

• Assessed internal documents and materials

• Interviewed people in charge of disclosed activities and performances

• Reviewed the GRI G3.1 application level which was used as a reporting framework

Conclusion

Based on the results we have obtained from material reviews and interview with the personnel, we had several discussions with Hana Financial Group on the revision of the Report. We reviewed the Report’s final version in order to confirm that our recommendations for improvement and our revisions have been reflected. When reviewing the results of the assurance, the assurance team could not find any inappropriate contents in the Report to the compliance with the principles stipulated below.

1. Inclusivity

Inclusivity is the participation of stakeholders in developing and achieving an accountable and strategic response to sustainability.

- Hana Financial Group is developing and maintaining stakeholder communication channels in various forms and levels in order to make a com-mitment to be responsible for the stakeholders. The assurance team did not find any critical stakeholder group left out during this procedure.

2. Materiality

Materiality is determining the relevance and significance of an issue to an organization and its stakeholders. A material issue is an issue that will influence the decisions, actions, and performance of an organization or its stakeholders.

- Hana Financial Group is determining the materiality of issues found out through stakeholder communication channels through its own materiality evaluation process, and the assurance team did not find any critical issues left out in this process

2013 HANA FINANCIAL GROUP SUSTAINABILITY REPORT8584 Principles and Performance for Sustainable Management


GRI G3. 1 Index


Appendix

3. Responsiveness

Responsiveness is an organization’s response to stakeholder issues that affect its sustainability performance and is realized through decisions, actions, and performance, as well as communication with stakeholders.

- The assurance team did not find any evidence that Hana Financial Group’s counter measures to critical stakeholder issues were inappropriately recorded in the Report.

In addition, the assurance team checked that the Hana Financial Group complied with the GRI G3.1 in preparing the Report, and that the Report fulfills the requirements of GRI application level ‘A+’.

Recommendation for improvement

We hope Hana Financial Group’s publication of the Report is actively used as a communication tool with stakeholders and recommend the fol-lowing for improvements.

• Improve the way to explain the sustainability management approach so that the readers are able to more easily understand the sustainability strategies, activities and performances.

Our independence

With the exception of providing third party assurance services, KMAR is not involved in any other Hana Financial Group business operations that are aimed at making profit in order to avoid any conflicts of interest and to maintain independence.

September 16, 2014CEO Ki Ho Park

000 -129

86

GRI G3.1 Index

Indicators Explanation Level of Disclosure Page Additional information

1. Vision and Strategy

1.1 CEO Message ● 4-5

1.2 Description of key impacts, risks, and opportunities ● 10-14

2. Organizational Profile

2.1 Name of the organization ● 8-9

2.2 Primary brands and products ● 17

2.3 Operational structure of the organization ● 8, 17-18

2.4 Location of organization’s headquarters ● 8

2.5 Number of countries where the organization operates ● 9, 40-41

2.6 Nature of ownership and legal form ● 8

2.7 Markets served ● 9

2.8 Scale of the reporting organization ● 19

2.9 Significant changes during the reporting period regarding size, structure, or ownership ● 8

2.10 Awards received ● 42-43, 90

3. Report Parameters

Report Profile

3.1 Reporting period ● About this Report

3.2 Date of most recent previous report ● About this Report

3.3 Reporting cycle ● About this Report

3.4 Contact point for questions regarding the report or its contents ● About this Report

3.5 Process for defining report content ● About this Report

3.6 Boundary of the report ● About this Report

3.7 State any specific limitations on the scope or boundary of the report ● About this Report

3.8Basis for reporting that can significantly affect comparability from period to period and/or between organizations

● About this Report

3.9 Data measurement techniques and the bases of calculations ● About this Report

3.10Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement

● About this Report

3.11 Significant changes in the scope, boundary, or measurement methods applied in the report ● About this Report

3.12 GRI Content Index ● 86-89

3.13 Policy and current practice with regard to seeking external assurance for the report ● About this Report

4. Corporate Governance, Accountability and Engagement

Governance

4.1 Governance structure of the organization ● 15-16

4.2 Indicate whether the Chair of the highest governance body is also an executive officer ● 15

4.3 Composition of the highest governance body ● 15

4.4Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body

● 15-16

4.5 Compensation to members of the board of directors and executives ● 16

4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided ● 15-16

4.7 Process for determining the qualifications and expertise of the members ● 15

●: Reported ◐: Partially Reported ○: Not Reported N/A: Not Applicable



Corporate Governance, Accountability and Engagement

4.8 Management principles ● 10-14

4.9Procedures of the highest governance body for overseeing the organization’s economic, environmental, and social performance

● 15-16

4.10 Processes for evaluating the board of directors ● 16

4.11 Whether and how the precautionary approach or principle is addressed by the organization ● 30-33

4.12Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses

● 82

4.13 Memberships in associations such as industry associations, national and international advocacy organization ● 82

4.14 List of stakeholder groups engaged by the organization ● 20-21

4.15 Basis for identification and selection of stakeholders with whom to engage ● 20-21

4.16 Approaches to stakeholder engagement ● 20-21

4.17Key topics and concerns that have been raised through stakeholder engagement, and thecorresponding responses

● 20-21

Economic Performance

EC1 Direct economic value generated and distributed ● 19

EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change ● 82

EC3 Coverage of the organization’s defined benefit plan obligations ● 82

EC4 Significant financial assistance received from government N/A -

EC5Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation

◐ 82

EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation ● 82

EC7 Proportion of senior management hired from the local community at significant locations of operation ● 54

EC8 Impact of infrastructure investments and services provided primarily for public benefit ● 46-48

EC9 Understanding and describing significant indirect economic impacts ● 82

Environmental Performance

EN1 Materials used by weight or volume N/A -

EN2 Percentage of materials used that are recycled input materials ● 82

EN3 Direct energy consumption by primary energy source ● 56

EN4 Indirect energy consumption by primary source ● 56

EN5 Energy saved due to conservation and efficiency improvements ● 56

EN6Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives

● 56

EN7 Initiatives to reduce indirect energy consumption and reductions achieved ● 46-48

EN8 Total water withdrawal by source ● 56

EN9 Water sources significantly affected by withdrawal of water ● -It is judged that since water systems are used alone, it generates no significant impact on the water supply sources

EN10 Percentage and total volume of water recycled and reused ● - No case of reusing the water.

EN11Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high bio-diversity value outside protected areas

● -Since business sites are located in city areas, no direct impact on the bio-diversity.

EN12Description of significant impacts of activities, products, and services on bio-diversity in protected areas and areas of high bio-diversity value outside protected areas

● -Impact on the bio-diversity as a result of management activities is judged to be minimal or non-existent.

EN13 Habitats protected or restored ● 61, 72

EN14 Strategies, current actions, and future plans for managing impacts on bio-diversity N/A -

EN15Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk

N/A -

EN16 Total direct and indirect greenhouse gas emissions ● 56

EN17 Other relevant indirect greenhouse gas emissions ○ - Not critical due to the characteristics of the financial industry.

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved N/A -

EN19 Emissions of ozone-depleting substances N/A -




GRI G3. 1 Index


Appendix

88

GRI G3.1 Index


Environmental Performance

EN20 NOx, SOx, and other significant air emissions ● -Non existence of critical air pollutant emissions within the business boundary.

EN21 Total water discharge by quality and destination ● - No waste water discharge besides domestic wastewater

EN22 Total weight of waste by type and disposal method ● 56

EN23 Total number and volume of significant spills ● - 0 case – No critical hazardous materials being handled.

EN24Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII

● -0% - No existence of matters on waste prescribed in the Appendix of Basel Convention

EN25Identity of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff

● -No existence of water body and habitats impacted by the discharge of wastewater

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation ● 61

EN27 Percentage of products sold and their packaging materials that are reclaimed by category N/A -No use of packaging materials due to features in the financial industry

EN28Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with environmental laws and regulations

● -No existence of matters on violation of environmental regulations

EN29Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce

● -The environmental impact being minimal resulting from the transportation of products and raw materials due to features in the financial industry

EN30 Total environmental protection expenditures and investments by type ● 83

Labor Performance

LA 1 Total workforce by employment type, employment contract, and region ◐ 50

LA 2 Total number and rate of employee turnover ● 82

LA 3Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations

● 52

LA 4 Percentage of employees covered by collective bargaining agreements ◐ 53

LA 5 Minimum notice period(s) regarding significant operational changes ● - 60 days before

LA 6 Percentage of total workforce represented in formal joint management-worker health and safety committees ● - 100%

LA 7Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region and by gender

● 82

LA 8Education, training, counseling, prevention, and risk-control programs in place to assist employees, their families, or community members

● 82

LA 9 Health and safety topics covered in formal agreements with trade unions ● -Discussing major agendas on health and safety through regular and ad-hoc labor-management meetings

LA 10 Average hours of training per year per employee and by employee category ● 54

LA 11Programs for lifelong learning that support the continued employability of employees and assist them in managing career endings

● 83

LA 12 Percentage of employees receiving regular performance and career development reviews ● 53

LA 13 Composition of governing bodies and breakdown of employees ◐ 15

LA 14 Ratio of average salary of women to men by employee category ● 82

LA 15 Return to work and retention rates after parental leave, by gender ● 83

Human Rights

HR 1Percentage of significant investment agreements and contracts that include clauses incorporating human rights concerns, or that have undergone human rights screening

● -0% - Not including provisions on human rights protection indicated in the current investment agreement process

HR 2Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken

● - 0%

HR 3 Rate of employees that took training on human rights policies and training ● 83

HR 4 Total number of incidents of discrimination and corrective actions taken ● - No reports on discrimination

HR 5Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk

● 53

HR 6Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor

● 53

HR 7Operations identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of forced or compulsory labor

● 53

HR 8Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights

● 83

HR 9 Total number of incidents of violations involving rights of indigenous people and actions taken ● -No existence of disputes resulting from the violation of local residents’ rights

HR 10Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments

● -Conducting training on human rights and impact assess-ment in 630 branches of Hana Bank (626 in Korea, 4 abroad) and 371 branches of KEB (355 in Korea, 16 abroad)

HR 11Number of human rights-related complaints that are registered, claimed and resolved through official treatment mechanisms

● - No complaints on human rights




Social Performance

SO 1Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities

● 49

SO 2 Percentage and total number of business units analyzed for risks related to corruption ● -Conducting the diagnosis on corruption risks regularly in 630 branches of Hana Bank (626 in Korea, 4 abroad) and 371 branches of KEB (355 in Korea, 16 abroad)

SO 3 Percentage of employees trained in organization’s anti-corruption policies and procedures ● 26-27

SO 4 Actions taken in response to incidents of corruption ● 26-27

SO 5Establishing positions on public policies, setting public policies and engaging in lobbying (prohibiting donation of political funds)

◐ -Participating in the level of suggesting ideas on policies and institutions on the financial industry

SO 6 Total value of contributions to political parties or politicians ● - No contributions to a political party or politics

SO 7Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes

● -No sanctions resulting from unfair competitions and monopolistic acts

SO 8 Penalties and non-financial constraints imposed due to violation of laws and regulations ● -Hana Bank (2 cases – KRW 11 million), KEB (1 case – KRW 25 million)

SO 9 Operations with significant potential or actual negative impacts on local communities ● - No business sites causing negative impact on community

SO 10Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities

● -

Evaluating the impact on community in multiple angles through the BoD, Happiness Sharing Committee and Happiness Sharing Promotion Committee

Product Responsibility

PR 1 Policies on customer health and safety ● 35, 39

PR 2 Number of violations of regulations on health and safety of products and services ● - No violation of laws and regulations

PR 3 Types of information on products and services needed for procedures ● -No violation of laws and regulations on customers’ health and safety

PR 4 Number of violations of laws on products, service and labeling ● 17, 34, 35

PR 5 Policies and procedures on customer satisfaction ● 38-39, 83

PR 6 Policies and programs on communication such as advertisement and sponsors ● 83

PR 7 Number of violation of laws on communication such as advertisement and sponsorship ● - No violation of laws on communication

PR 8 Number of complaints on violating the protection of customers’ personal information ● -No complaints on the protection of customers’ personal information

PR 9 Number and amount of cases of violating laws and regulations on the supply of products and services ● - No violation of laws and regulations on financial services

Financial Services Sector Supplement

FS 1 Policies on environmental and social components applied to the business ● 30-31

FS 2 Assessment and review procedures for environmental and social risks in business fields ● 30-31

FS 3Process of monitoring the implementation of and compliance with customers’ environmental and social needs in a contract or transaction

● 28, 32-33

FS 4Process of strengthening employee competency for implementing environmental and social policies and procedures in business fields

● -Operation of internal programs such as a workshop on fulfilling socially responsible management

FS 5Interaction between customers, investors and business partners in association with environmental and social risks and opportunity elements

● 16, 20

FS 6 Percentage of the portfolio for business lines by specific region, size(e.g. micro/SME/large) and by sector N/A - No plan to disclose due to confidentiality

FS 7Currency value of products and services designed to provide certain social benefits in each business field specified by purpose

● 46-48

FS 8Currency value of products and services designed to provide certain environmental benefits in each ecified by purpose

● 47, 48

FS 9Scope and frequency of the application of audits that assess the implementation of environmental and social policies and risk assessment process

◐ 22, 23

FS 10Percentage and number of companies held in the institution's portfolio with which the reporting organization has interacted on environmental or social issues

● -No engagement in investment targets although item selection and monitoring based on ESG evaluation take place upon managing SRI funds

FS 11 Ratio of assets subject to environmental and social reviews through both positive and negative methods ● 22-23

FS 12Measures on decision-making of shareholders on environmental and social issues within the scope where reporting agencies have the influence in making decisions

● 15-16

FS 13 Access points by type in regions with little population or no economic benefits ● 35-37

FS 14 Initiatives to improve access to financial services for the underprivileged ● 46-48

FS 15 Policies on fair design and sales of financial products and services ● 32-33

FS 16 Initiatives to intensify financial knowledge (education) by recipient type ● 46, 60, 62



GRI G3. 1 Index


Appendix


90


Affiliates Awards Presented by

Hana Financial Group2013 Korea Sustainability Award

Journalists Association of Korea,Korea Sustainability Assessment Service

Creation of Future Management Awards 2013 – Financial Product and Service in Creative Finance category Korea Economic Daily

The Strongest Bank The Asian Banker

2013 Asia Today Financial Award Asia Today

Chairman of Hana Financial Group, Jung-Tai Kim

Grand Prize in Best Bank In Korea AwardSeoul Economic Daily, Seoul Economic Network (SEN)

21st Century Entrepreneur of the Year Award 21st Century Entrepreneurs’ Club

Forbes CEO Award Forbes Korea

2013 Korea’s Creative Economic Leader – Grand Prize in Value Management categoryMaekyung Media Group, Korea Media PR Agency

2013 Korea’s Creative Economic CEO – Grand Prize in Value Creation category KCCI, Dong-A Daily

President & CEO of Hana Bank, Jong-Jun Kim

National Sharing Grand Award – Civil Merit Medal Ministry of Health and Welfare

Hana Bank 2013 Global Model Bank Award – Global Model Bank Celent

2013 Product and Business International Awards – Best Mobile Phone Banking Initiative and another category The Asian Banker

2013 23rd ASTRID Award – Gold Prize in Culture, Art, Fashion, Music and Media category MerComm, Inc.

Ranked 13th among all domestic brands Interbrand, Fortune Korea

Korea’s Most Beloved Brand Awards – Most Excellent Brand in the private banking category ChosunBiz

2013 Customer-love Brand Award – Grand Prize in the Customized Financial Brand category Korea Joongang Daily

2013 Red Dot Design Award – Main Prize in the Communication Design category Red Dot Institute

Award for Excellence 2013 – Best Bank in Korea Euromoney

Private Banking Poll 2013 – Best Private Bank and 3 other categories Asiamoney

23rd Global Wealth Award 2013 – Excellence Prize in Best PB Cultivation and Development Program and Most Innovative Busi-ness Model

PBI (Private Banker International)

2013 Global Financial Distribution and Marketing Innovation Awards – Main PrizeEFMA (European Financial Management and Marketing Association), Accenture

2013 TIA Korea – Best Mobile Banking Project and 2 other categories The Asian Banker

5th Global Private Banking Awards 2013 – Best Private Bank in KoreaThe Banker, PWM (Professional Wealth Management)

Grand Prize in the 13th Korea Digital Management Innovation Awards – Presidential PrizeMinistry of Science, ICT and Future Planning, Maeil Business Newspaper

2nd Financial Consumer Protection Awards of the Korea Economic Daily – Grand Prize Korea Economic Daily

Grand Prize at ‘2013 KCCIㆍForbes CSR Award’ Forbes Korea Forbes Korea

Anti-Money Laundering Day – Presidential CommendationKorea Financial Intelligence Unit of the Financial Services Commission

BAI Global Financial Innovation Award 2013 – Product & Service Innovation category and one more category BAI

Former President & CEO of KEB, Yong-Ro Yun

2013 Foreign Company Day – Industrial Service MedalMinistry of Trade, Industry and Energy, Korea Foreign Company Association

KEB Best Private Bank in Korea – 8 categories Asiamoney

Best Foreign Exchange Bank in Korea FinanceAsia

2013 Best Cash Management in Korea – 2 categories Asiamoney

Best Foreign Exchange Bank in Korea Global Finance

Best Sub – Custodian Bank in Korea Global Finance

Hana Daetoo Securities Grand Prize in the ECM category in Korea IB Awards Korea Economic Daily

Grand Prize in the ‘e-service” in the Herald Capital Market Award Herald Biz

Leader of highest excellence in financial derivatives Money Today

Hana SK Card App Award Korea 2013 – Grand Prize in the card service sector in the financial industry Digital Chosun

2013 Korea Mobile Award – Top Excellence Award in mobile advertisementKorea Mobile Internet Business Association (MOBIA)

KEB futures Compliance Awards Korea Exchange

90

Milestones of the Hana Financial Group's Sustainability Report Publication

2006 Hana Bank Sustainability Report



2012 Hana Financial GroupSustainability Report

2008년 Hana Bank Sustainability Report

2011 Hana Financial GroupSustainability Report

Hana Financial Group has published the Hana Financial Group Sustainability Report since 2011 at the group level which was published by Hana Bank up until 2010.The 2011 Hana Financial Group Sustainability Report reported on the activities of the affiliates by integrating them, but in the 2012 Hana Financial Group Sustainability Report, affiliates were classified and recorded more clearly to enhance the accuracy and reliability of reporting.

Hana Financial Group Holding Company · Hana Bank · KEB · Hana Daetoo Securities · Hana SK Card

· Hana Life · Hana Capital · Hana Institute of Finance · Hana I&S · Hana Asset Trust · Hana Savings

Bank · Hana Asset Management · KEB F&I · KEB Futures · KEB Investor Services

55 Euljiro, Jung-gu, Seoul (Euljiro 2-ga) T. +82-2-2002-1111 www.hanafn.com

This report was produced using eco-friendly paper made

of the FSC-certified wood, and was printed with soy ink.

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