KB, Hana, Woori pledge to enhance shareholder returns

From left are KB Financial Group Chairman Yoon Jong-kyoo, Hana Financial Group Kim Jung-tai and Woori Financial Group Chairman Son Tae-seung. Courtesy of each firm

By Lee Min-hyung

Leaders of major financial holding firms here have pledged to adopt enhanced shareholder return policies in 2021, a move to appease dividend-hungry shareholders after regulators cut the financial firms' dividend payouts last year amid coronavirus uncertainties.

The top priority of their regular shareholders' meetings on Friday was to ensure that they will carry out aggressive shareholder return policies ― such as interim or quarterly dividend offerings ― throughout this year.

KB Financial Group, the nation's largest financial holding firm by market capitalization, said it would keep reviewing measures to offer “stable dividends” for its shareholders as early as the second half of this year.

“Our basic idea is to set the dividend payout ratio at more than 30 percent,” KB Financial Group Chairman Yoon Jong-kyoo said during its regular shareholders' meeting.

KB fixed its 2020 dividend payout ratio at 20 percent by accepting authorities' recommendation to set the ratio at less than 20 percent for the sake of financial soundness amid the pandemic.

“We are also aware that more and more shareholders prefer to receive stable and regular dividends,” Yoon told shareholders. “Expectations for quarterly dividends are also growing, and KB will review taking such a step for shareholders' interest.”

The Financial Services Commission urged financial firms here ― such as major banking groups ― to place an upper limit of their dividend payout ratio at 20 percent until the end of June this year.

“KB will maintain the back-to-the-basics sales policy until June,” Yoon said. But he hinted at the possibility for the group to push for a series of other aggressive shareholder return policies sometime in the latter half of this year.

“Given the current pace of the virus spread and vaccinations, our view is that (the economy) will be on track for stabilization in the latter half of the year,” he said.

Woori Financial Group also passed a proposal to secure capital for shareholder returns during its shareholders' meeting on the same day.

Following the decision, Woori will be able to carry out various shareholder-friendly policies worth 4 trillion won ($3.53 billion). Market insiders consider it a move for Woori to build a foundation for interim dividend offerings.

“For this year, we will do our best to enhance shareholder value by taking a more active set of shareholder return policies,” Woori Financial Group Chairman Son Tae-seung said.

The Woori chief also reaffirmed its willingness to fulfill environmental, social and corporate governance (ESG) management this year.

“Woori will become a financial group helping build a sustainable society by joining the government's 2050 carbon-neutrality policy,” Son said.

Hana Financial Group also approved Chairman Kim Jung-tai's term extension during its shareholders' meeting. The decision allowed Kim to serve his fourth term until March 2022.

Hana also approved a proposal enabling Hana Bank's new CEO Park Sung-ho to become a non-executive board member of the group. Park took office as the leader of the bank on Thursday, replacing former CEO Ji Sung-kyoo. Ji was promoted to vice chairman of Hana Financial Group, where he will handle digital businesses.