'Bank Sniper' Align Partners Pre-Announces Shareholder Proposal Agenda for General Meeting

[Asia Economy Reporter Park So-yeon] Align Partners, which is conducting a shareholder value enhancement campaign targeting seven listed domestic bank holding companies, publicly disclosed on the 25th the shareholder proposal agenda for the regular general meetings of shareholders scheduled for the end of March 2023 for the seven bank holding companies.

The proposals include common stock cash dividends, the introduction of a medium-term shareholder return policy recommending a total shareholder return rate of at least 50% of net income, and amendments to dividend-related articles of incorporation to require dividends of more than 50% of the controlling shareholder’s net income on a consolidated basis.

Prior to this, Align Partners sent open shareholder letters to the boards of directors of the seven listed domestic bank holding companies. The core idea is that each bank holding company should steadily accumulate a portion of the annual profits until the common equity capital ratio reaches 13%, and then return all profits exceeding 13% to shareholders.

They requested the official adoption of a medium-term shareholder return policy by board resolution and fair disclosure by February 9, which commits to reducing the growth rate of risk-weighted assets such as loans to the national nominal GDP growth rate or slightly below, and using the secured resources to return at least 50% of net income to shareholders.

Align Partners plans to exercise the legally guaranteed minority shareholder right to propose agenda items if any bank holding company does not announce a capital allocation policy and medium-term shareholder return policy at a level acceptable to shareholders in a specific and binding form by the 9th of next month. They will propose shareholder return-related agenda items at the regular general meetings scheduled for March this year and conduct a public shareholder campaign to secure affirmative votes.

According to Article 33, Paragraph 1 of the Financial Company Governance Act, for the seven bank holding companies targeted by this public shareholder campaign, shareholders holding at least 0.1% of the total issued voting shares for more than six months can propose agenda items for the general meeting of shareholders.

Align Partners plans to prepare to make shareholder proposals for all seven bank holding companies based on shares directly held and shares entrusted by other shareholders.

As stated in the open shareholder letter, Align Partners intends to continue the public shareholder campaign and regular general meeting shareholder proposals related to shareholder returns beyond next year until all seven bank holding companies officially adopt capital allocation policies and medium-term shareholder return policies in a binding manner that is acceptable from a shareholder perspective.

Lee Chang-hwan, CEO of Align Partners, said, "The core of this campaign is that bank holding companies can maintain sound capital ratios while making capital allocations that are more favorable from a shareholder value perspective than now." He added, "If the policies proposed by Align Partners are adopted, the stock prices of bank holding companies will rise significantly, enabling easier capital raising in the capital markets when necessary, and it will also help solve excessive debt ratio problems, so I am confident the positive effects will be substantial."

He further urged, "We call on the boards of all bank holding companies to actively reflect shareholders’ intentions and make progressive decisions within the proposed deadline so that this campaign can be smoothly completed without a shareholder meeting vote."

Meanwhile, Align Partners received shareholder registers from two bank holding companies on the 20th. They expect to receive shareholder registers from all seven bank holding companies by the 27th. Align Partners stated that based on the shareholder registers, they plan to strengthen promotional activities for their public shareholder campaign.