Shinhan prompts KB, Hana to consider quarterly dividends

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By Park Jae-hyuk

KB and Hana financial groups started considering paying quarterly dividends to their shareholders, in an apparent attempt to prevent an exodus of investors to Shinhan Financial Group, which plans to offer dividends in the third quarter, becoming the nation's first banking group to do so.

“Shinhan is likely to pay dividends for the third quarter of this year,” Hana Chief Financial Officer (CFO) Lee Hoo-seung said during Friday's conference call. “Its quarterly dividend policy seems to be stabilizing, so we are considering revising our articles of association to pay quarterly dividends.”

Hana has paid half-yearly dividends to its shareholders every year since it launched a holding company structure in 2005. However, its articles of association have yet to allow the lender to pay quarterly dividends.

KB has signaled the possibility of the group paying quarterly dividends regularly starting next year.

“Considering the trend of global financial institutions and feedback from our shareholders, we will make a shareholder-friendly decision,” KB CFO Lee Hwan-ju said during Thursday's conference call.

The group's articles of association have already allowed it to offer quarterly dividends, but it has never done so. According to industry sources, the chance is slim that the lender will pay dividends for the third quarter of this year.

“KB will not pay dividends for the third quarter, because it paid 750 won per share in its half-yearly dividend, while Shinhan paid 300 won per share in its second-quarter dividend,” a banking industry source said.

Shinhan has been determined to pay the third-quarter dividend, although its plan needs to get approval from the board of directors at its forthcoming meeting on Tuesday.

“Our management has a firm will to pay the third-quarter dividend,” a Shinhan executive said.

Earlier this year, financial firms in Korea were virtually banned from paying hefty dividends, despite their record-high earnings, because financial authorities had asked them to prioritize their financial soundness amid the COVID-19 pandemic. After the regulation was lifted in June, domestic financial holding companies have paid relatively larger amounts of interim dividends.