Banking groups gearing up to pay quarterly dividend

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By Lee Min-hyung

Korea's four major financial firms are gearing up to offer much-anticipated quarterly dividends on a regular basis this year.

Their moves signal a new paradigm for the domestic financial industry, with the top financial holding firms realizing the importance of boosting their stock price in a stable manner by winning more investors' trust through the dividends.

Shinhan Financial Group was the first to do so from the third quarter of 2021 when the company offered 260 won ($0.21) per share in quarterly dividends. Starting this year, the company also pledged to make it a policy to provide quarterly dividends.

KB Financial Group, the largest financial holding firm by market capitalization here, is also on track to ride the same path as Shinhan this year. The company plans to confirm details over the agenda during an upcoming board meeting, but the industry expects KB to start its quarterly dividend offering from the first quarter of this year, while most of its rivals are pushing ahead with the same drive.

Woori Financial Group, which completed its long-awaited privatization last year, is also set to discuss the topic during its upcoming shareholders meeting on March 25. The company already set an agenda to change part of its articles of association in order to enable the quarterly dividend offerings.

“We did not have any specific (legal) basis for interim dividend offerings last year,” Woori Financial Group Chief Financial Officer Lee Sung-wook said during a conference call last month. “But we are going to discuss concrete measures that will allow us to offer interim dividends.”

Hana Financial Group has paid interim dividends semiannually since 2015, and is also considering expanding to a quarterly basis, although no specifics have been fixed regarding the timeline.

“Most banking groups chalked up record profits last year and piled up enough reserves on growing pressure from financial authorities,” an industry analyst said. “They will remain committed to paying regular dividends on the earnings growth, as part of a move to drive their stock growth this year.”