Officials speak to the audience about the Korean financial market during an investor relations event at a hotel in Hong Kong, Wednesday. From left, Hana Financial Group Chairman Ham Young-joo, Financial Supervisory Service (FSS) Gov. Lee Bok-hyun, Shinhan Financial Group Chairman Jin Ok-dong and Korean Re CEO Won Jong-gyu. Courtesy of FSS
HONG KONG — Korean financial firms reaffirmed their commitment to the long-term implementation of the Corporate Value-Up Program during talks with investors in Hong Kong, Wednesday. They emphasized their determination to follow through with the government-led initiative aimed at addressing the undervaluation of the Korean stock market.
"The top concern among investors is whether the Corporate Value-Up Program will be sustained and whether we are serious about it. So I assured them that we are," said Shinhan Financial Group Chairman Jin Ok-dong, speaking to reporters after an investors relations (IR) event at a hotel in Hong Kong.
"The government is serious, the financial authorities are serious, and Korean firms are serious, based on the belief that this is the only path forward for Korea," Jin added.
Introduced this year, the initiative aims to tackle the undervaluation of the Korean stock market by enhancing corporate governance and boosting shareholder returns. Financial firms have been key participants in the program, taking the initiative to announce measures aimed at boosting shareholder value in their disclosures.
For instance, Hana recently vowed to maintain its common equity tier 1 (CET1) ratio between 13 and 13.5 percent, a core figure affecting a company's shareholder return policy. Hana also promised a return on equity (ROE) of over 10 percent and a shareholder return ratio of 50 percent by 2027. Similarly, in July, Shinhan vowed to achieve a CET1 ratio of 13 percent, a ROE of 10 percent and a shareholder return ratio of 50 percent by 2027.
"Shareholder returns that meet market expectations can only be achieved with strong underlying profitability. The key to value enhancement lies in diagnosing the current situation to identify the causes of corporate undervaluation. Rather than focusing on declarations, it's essential to devise practical and actionable measures," Hana Financial Group Chairman Ham Young-joo said.
"In developing our value enhancement plan, we prioritized establishing specific implementation strategies and ensuring their internalization as well."
Hana Financial Group Chairman Ham Young-joo, back row second from right, explains the group's Corporate Value-up plans to global asset management companies at a hotel in Hong Kong, Wednesday. Financial Supervisory Service Gov. Lee Bok-hyun, on Ham's left, also participates to explain the regulatory support aimed at enhancing the country's finance regulations. Courtesy of Hana Financial Group
Their remarks followed the IR event, which was co-hosted by the Financial Supervisory Service (FSS) and major financial institutions, including Shinhan Financial Group, Hana Financial Group, Korea Investment & Securities and Korean Reinsurance Company (Korean Re). According to the FSS, the event attracted 230 participants from 102 institutions.
Participating financial groups also conducted individual IR meetings with global investors before and after the event.
"Our announcement of an unprecedented value enhancement plan would not have been possible without the support of financial authorities and the modernization of regulatory frameworks," Ham said.
During the event's Q&A session, Jin cited Korea's demographic challenges as a key reason for driving the initiative to bolster the stock market.
"Korea's public pension system currently provides an income replacement rate of just 42 percent. At this pace, the aging of society will place an immense financial burden on the government. To address this, private pensions and individual savings accounts are essential," Jin said.
Korean Re CEO Won Jong-gyu emphasized the importance of consistent communication between companies and shareholders, likening the relationship to that of a married couple.
"Since I became CEO in 2013, our company has announced ambitious plans every year and worked hard to achieve them. We have grown, but market sentiment has not always reflected that. Back then, Korean investors held 40 percent of our stock, but this has dropped to 26 percent," Won said, underscoring the need for better communication.
Financial authorities also vowed to ensure consistent efforts going forward. FSS Gov. Lee Bok-hyun said, "With two and a half years left in this administration's term, I promise that we will continue to communicate with the market and work toward advancing Korea's financial system."