In a conference call that was held after the announcement of the results on the 5th, Lee Hui-seung, CFO of Hana Financial Group, repeatedly apologized. “I ask for your generous understanding,” he said.
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Financial holdings, which had the highest net profits ever recorded last year, bowed their heads to shareholders. This is due to the reduced dividend size due to the falling stock price. Financial holdings announced that they would review proposals such as interim dividends as well as treasury stock purchases as they went to appease shareholders.
Hana Financial Group has been paying interim dividends every year since 2005 when the holding company was established. It is known as the most shareholder-friendly among financial holdings. However, the atmosphere became difficult as the financial authorities recommended refraining from interim dividend due to soundness and demanded a reduction in dividend payout ratio. The board of directors of Hana Financial Group decided to pay a dividend of 1350 won per share (1850 won including intermediate dividends, payout ratio of 20%), reducing the dividend per share by 16% compared to 2019.
KB Finance pulled out an unprecedented interim dividend card. KB Finance announced in a conference call after the performance announcement that it would review various ways to improve shareholder value, such as interim dividends and treasury stock purchases and cancellations. This is to soothe the disappointment of shareholders from the immediate dividend decline.
KB Financial’s dividend payout ratio is 20%, the same as Hana Financial Group’s. This is a 6% drop from the previous year. It is also the lowest level in 7 years. The dividend per share was 1770 won, down 19.9% from the previous year (2019).
Shinhan Financial Group and Woori Financial Group, which have yet to determine their dividend payout ratio, are also busy with appeasing shareholders. An official from Shinhan Finance said, “We will prepare for dividends for the second half of the year without a hitch.
This is because there was direct pressure from the financial authorities behind financial holdings that reduced their dividends. The Financial Supervisory Service conducted a stress test on the assumption that it was more severe than the IMF bailout in 1997, and suggested that banks’ dividends would be limited to’within 20% of net income’ by June, saying that many banks may have problems with their soundness. Decided.
It is a temporary recommendation, but it is a burden for banks. An official from the financial holding company said, “At present, there is only a promise that it will improve after this June.” Meritz Securities analyst Eun Kyung-wan said, “In the case of KB Financial Group, the dividend payout ratio will return to the previous level of 26% next year.”
Meanwhile, KB, Shinhan, and Hana Financial Group recorded the highest net profits last year.
Shinhan Financial Group’s net income for the year was 3.4146 billion won, an increase of 0.3% from the previous year. KB Financial Group’s net income last year was KRW 3.4552 trillion, up 4.3% from the same period last year. KB Financial Group has ranked first among the four major financial holdings in three years since 2017.
Hana Financial Group’s net profit last year was KRW 2.637.2 billion, up 10.3% from the previous year. Woori Financial Group recorded 1.3 trillion won in net income last year, down 30.2% from the previous year. This is because one-time expenses such as preemptive provisioning and private equity compensation from the spread of Corona 19 were reflected amid slowing growth in non-bank profits.