Subscribe
E-Paper
 |
Major banking groups set to pay interim dividends
By Park Jae-hyuk
KB Financial Group narrowly outpaced Shinhan Financial Group in its first-half earnings, maintaining its leading status, amid the fierce competition among the nation's major banking groups, all of which posted record-high net incomes during the first six months of 2021.
Based on their earnings growth, domestic financial groups are ready to pay half-yearly or quarterly dividends to their shareholders, who had to receive smaller-than-expected dividends earlier this year, due to the decision of the financial authorities that virtually enforced a 20-percent dividend cap.
Shinhan announced Tuesday that its first-half net income rose 35.4 percent year-on-year to 2.44 trillion won ($2.1 billion) and that its second-quarter net profit soared 43.4 percent year-on-year to 1.25 trillion won. The results enabled the group to post record half-yearly and quarterly earnings since it established its holding company structure in 2001.
Its first-half net profit was slightly lower than KB's, although Shinhan surpassed its rival's second-quarter earnings.
KB earlier announced that its first-half net profit rose 44.6 percent year-on-year to 2.47 trillion won, while its second-quarter net income was 1.2 trillion won, down 5.2 percent from a year earlier. This is the first time for Shinhan to outrun KB in quarterly earnings since the first quarter of 2020.
From the perspective of shareholder value, Shinhan's strategies are seen as more aggressive than KB's.
Shinhan said that its board of directors will make a decision next month on whether or not to pay dividends to the group's shareholders every quarter. It also did not rule out the possibility of a buyback.
"What we are considering is paying quarterly dividends, not half-yearly dividends," Shinhan Chief Financial Officer (CFO) Roh Yong-hoon said in a conference call, Tuesday. "Regarding the share buyback discussion, more active measures can make it possible to improve shareholder value, if the COVID-19 pandemic situation comes under control and there are not many problems with the economic situation."
In contrast, KB declined to mention the possibility of a quarterly dividend payout, although the banking group decided to pay 750 won per share to its shareholders as the group's first-ever interim dividend. It also indicated its intention to repurchase its shares again this year.
"We have bought back our shares every year, taking into account our dividend payout ratios, market conditions and communications with supervisory authorities," KB CFO Lee Hwan-ju said in last Thursday's conference call.
Hana Financial Group, which maintained its status as the third-largest banking group by posting a record-high 1.75 trillion won net profit during the first half, also decided to pay 700 won per share to its shareholders as an interim dividend.
The group said that it will make every effort to distribute satisfactory dividends at the end of this year. Until last year, it was the country's only major banking group that had paid interim dividends.
"Our goal is to make our stock popular through a stable dividend income," Hana CFO Lee Hoo-seung said in last Thursday's conference call.
Woori Financial Group set the size of its first-ever interim dividend at 150 won per share, during its board of directors' meeting last Friday, after retaking the status of the fourth-largest banking group from NongHyup Financial Group by posting an earnings surprise. Its first-half net income soared 114.9 percent year-on-year to 1.42 trillion won.
"At the end of this year, we will deliberate on whether or not to continue paying interim dividends," Woori CFO Lee Sung-wook said in last Wednesday's conference call.
NongHyup posted a 1.28 trillion-won net profit during the first half, up 40.8 percent from a year earlier. It is also considering paying interim dividends to its owner, the National Agricultural Cooperative Federation, so that the money can be used for farmers.
