JB Financial unveils long-term measures to improve corporate governance

JB Financial Group's headquarters in Jeonju, North Jeolla Province / Korea Times file

JB Financial Group unveiled a set of long-term measures, Tuesday, to improve its corporate governance, aligning with the government's push for businesses to enhance transparency and boost investor credibility.

The holding group of Jeonbuk Bank and Kwangju Bank said it will ensure a return on equity (ROE) of 15 percent.

A measurement of a company's financial performance, ROE is calculated by dividing net income by shareholders' equity.

A higher ROE indicates that a company’s management is more efficient at generating income and growth from its equity investments.

JB Financial Group also announced that it will aim to return 50 percent of its earnings to shareholders in the form of dividends.

It will cancel 40 percent of its own stocks in proportion to the amount of shareholder return.

The lender said it introduced these measures as part of its commitment to enhancing profitability and increasing shareholder returns.

Headquartered in Jeonju, North Jeolla Province, JB Financial Group was the first financial holding company from a provincial region to distribute dividends to shareholders.

It also purchased its own stocks and retired them in a bid to benefit retail investors.

In the short term, the lender plans to sustain an ROE of 13 percent or more by 2026 and raise the payout ratio to 45 percent during that timeframe.

Additionally, it committed to raising its price-to-book ratio (PBR), which reflects market valuation compared to book value, to 1.0.

A PBR below 1.0 indicates that a company’s market value is less than its book value. In such cases, the current stock price is lower than the amount the company would receive by selling all of its assets at book value.