Chairman Kim Jung-tae Buys Company Shares for the Second Time This Year... "Responsible Management" (Comprehensive)

Stock Price Slump Amid Confident Outlook on Future Earnings

Kim Jung-tae, Chairman of Hana Financial Group

[Asia Economy Reporter Kim Min-young] Kim Jung-tae, Chairman of Hana Financial Group, has taken responsibility management by purchasing additional shares of the company. As the stock price fell into a slump amid the suspension of domestic and international investor relations (IR) events due to the prolonged COVID-19 pandemic, this move is interpreted as both a direct defense and a demonstration of confidence in future performance.

According to Hana Financial on the 8th, Chairman Kim purchased 5,668 shares of the company on the market on the 6th. The average price per share was 22,550 KRW, totaling 127,813,400 KRW. Typically, a CEO's purchase of company shares is interpreted as a signal of undervaluation.

This is the second time Chairman Kim has purchased company shares this year. He bought 2,000 shares on February 5th at an average price of 33,000 KRW per share.

As a result, Chairman Kim's total holdings of company shares increased to 65,668 shares. A Hana Financial official stated, "This shows confidence in future performance and a willingness to boost the stock price through responsible management."

Since his appointment in 2012, Chairman Kim has been actively purchasing company shares. He bought 2,000 shares in 2013, the year after his appointment, 3,725 shares in 2015, and 1,500 shares in 2018.

Since last year, he has been purchasing shares twice a year. In June and July of last year, Chairman Kim bought 3,400 shares and 2,000 shares respectively.

Executives of Hana Financial are also continuing to purchase company shares. Last month, 15 executives at the level of managing director or higher purchased a total of 13,154 shares.

Vice Chairman Ham Young-joo also joined the ranks of company share purchasers. On the 18th of last month, Vice Chairman Ham purchased 5,000 shares on the market. This was his first purchase in about two years and three months since December 5, 2017, bringing his total holdings to 10,132 shares.

The stock price trend of Hana Financial has not been able to avoid a downward trend. The stock price peaked at 56,000 KRW in January 2018 but plummeted to 18,450 KRW on the 20th of last month. However, it managed to rise more than 30% from the low point, riding the rebound mood in the KOSPI market after the stock price crash. The closing price on the 7th was 24,350 KRW.

However, due to the overall undervaluation of financial stocks and the inevitable deterioration of financial sector profits caused by COVID-19, the future direction of the stock price remains uncertain.

The earnings outlook for Hana Financial this year is bleak. Researcher Lee Byung-geon of DB Financial Investment forecasted Hana Financial's first-quarter net income attributable to controlling shareholders at 478 billion KRW, reflecting a decline in net interest margin (NIM), a decrease in non-interest income, and non-monetary translation losses due to the rise in the won-dollar exchange rate. This is a 20.5% downward revision from the previous forecast. While Lee cited the financial authorities' recommendations to refrain from share buybacks and dividends as uncertainty factors for Hana Financial, he also evaluated that "among major banks, the degree of undervaluation is the most severe."