Shinhan Financial to retire stocks worth W150 bil. to return more benefits to shareholders

Shinhan Financial Group Chairman Cho Yong-byoung speaks during a meeting of shareholders at the firm's headquarters in Seoul, Thursday. Courtesy of Shinhan Financial Group

By Yi Whan-woo

Shinhan Financial Group announced Thursday it will retire a part of its stocks worth 150 billion won ($123 million) in a bid to raise its stock value and return more benefits to its shareholders.

During a regular shareholders' meeting, the country's second-largest banking group said it will also continue to pay quarterly dividends. Shinhan started paying quarterly dividends last year, becoming the first financial holding company in the country to do so.

“The stock retirement, along with ongoing payments of the quarterly dividends, are among the efforts that show willingness of our company and management to enhance shareholder value,” the group said in a statement delivered to The Korea Times. “And we believe our latest measures will send positive signals to the stock market.”

The number of stocks planned for retirement are a little more than 3.77 million, which accounts for 0.75 percent of Shinhan Financial Group's entire shares.

The company explained the retirement does not mean a decline in its aggregate capital.

Regarding the quarterly dividends, Shinhan Financial Group Chairman Cho Yong-byoung said the firm posted a record net income in 2021 of 4.19 trillion won, over “improved business portfolios” and that it will seek to raise its dividend payout ratio.

“We will make the utmost efforts to develop more diverse and flexible policies,” he said.

He described the group's performance last year as “a ceaseless challenge toward the future despite many obstacles.” He referred to the firm's acceleration in building a digital platform and enhanced management under environmental, social and corporate governance (ESG) principles.

Meanwhile, the shareholders approved the group's plan in newly appointing and extending tenures for eight of its 12 outside directors.

One of the eight, Kim Jo-seol, an economics professor at the Osaka University of Commerce, was named as an outside director for the next two years.

The remaining seven ― Park An-soon, Byeon Yang-ho, Sung Jae-ho, Lee Yoon-jae, Huh Yong-hak, Yoon Jae-won and Jin Hyun-duk ― required shareholders' confirmation to extend their terms for another year after serving their first year since 2021.

The group's largest shareholder, the National Pension Service (NPS), is believed to have thrown dissenting votes at sensitive proposals, including the appointment of outside directors.