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“I haven’t made any special recommendations for dividends in the 2nd financial sector, but I look forward to making a decision at a reasonable level.”
Following the recent recommendation by the Financial Services Commission to “dividend only 20% or less of net profit” to the banking sector, it sent a signal to the 2nd financial sector to refrain from excessive dividends. In a briefing on the New Year’s business plan on the 3rd, Kwon Dae-young, head of the Financial Industry Bureau of the Financial Services Commission, said, “It is not only a matter of banks to protect the soundness of capital.” He said, “I think the CEO and shareholders will judge this aspect well and make a reasonable decision at an appropriate level.”
It actively refuted the criticism that the government’s dividend recommendation was’infringing on shareholder rights’. Director Kwon said, “Under normal circumstances, we would not have made such a request for dividends,” he said. “In order to deal with it fairly and transparently, not anonymously, we presented the direction through the committee.” Credit rating agency Moody’s also emphasized that in a report on the 1st, “The Korean financial authorities’ recommendation to limit dividends is positive for banks’ credit rating for capital expansion.”
At the end of last month, the Financial Services Commission voted on a capital management recommendation to keep the dividend payout ratio (dividend ratio to net income) within 20% by the end of June for banks without holding companies and holding companies. The Financial Supervisory Service called in the executives of major insurance companies and demanded that the dividend payout ratio be kept at the average for the last three years.
The Financial Services Commission decided to strengthen the management and supervision of Internet banks to expand heavy interest rate loans for the common people. Director Kwon said, “Internet banks introduced the introduction to open the mid-interest rate market in an innovative way, and the results are quite poor.” The percentage of users with credit rating 4 or lower is rather low, with commercial banks at 24% and internet banks at 21%. K Bank, Kakao Bank, and Toss Bank promised the Financial Services Commission to actively increase their heavy-interest loans.
The loan maturity extension and interest repayment postponement measures for SMEs and small businesses affected by Corona 19, which were originally scheduled to end at the end of March, are expected to be extended once more. The Financial Services Commission is expected to announce the final draft within this month after final consultation with the financial sector. It also decided to include a’soft landing measure’ that allows the loans to be repaid by sharing instead of paying back the loans when the temporary deferral measures are over.
Reporter Lim Hyun-woo [email protected]
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