Meritz Financial "Over 50% of Consolidated Net Profit to be Returned to Shareholders"

First Actual Value-Up Plan Announced by Financial Holding Company
Optimal Capital Allocation to Be Pursued from 2026

Meritz Financial Group announced on the 4th a corporate value enhancement plan that includes returning more than 50% of consolidated net income to shareholders.

At the board meeting held that afternoon, Meritz Financial Group approved and disclosed a corporate value enhancement plan to return more than 50% of consolidated net income to shareholders by 2025, and from 2026 onward, to pursue optimal capital allocation for enhancing shareholder value by comparing internal investment returns with shareholder return yields.

A Meritz Financial Group official explained, "This is the first time among domestic listed financial holding companies to announce an actual value-up plan rather than just a preliminary notice," adding, "Since we have been explaining corporate value enhancement through disclosures and investor presentations for several years, we were able to promptly present an execution plan aligned with the government’s value-up program faster than other companies."

Meritz Financial Group set Total Shareholder Return (TSR) as the key indicator of the corporate value enhancement plan and shareholder return rate (share repurchase and cancellation + dividends) as the mid-term execution indicator.

To maximize these, Meritz Financial Group will determine the optimal capital allocation method for enhancing shareholder value by comparing three yields: internal investment return, share repurchase yield, and cash dividend yield.

Meritz Financial Group explained, "If the three yields remain similar to current levels after 2026, we will maintain a shareholder return rate of over 50%. However, if the internal investment return is higher than the share repurchase yield or the required return, the scale of shareholder returns may decrease, but more effective shareholder value enhancement will be possible."

Earlier, in November 2022, following Chairman Jo Jung-ho’s decision, Meritz Financial Group announced an active shareholder return policy including share repurchase and cancellation along with the so-called 'One Meritz' (comprehensive stock exchange) conversion that merged three listed companies into one.

The market capitalization also increased more than sixfold. The market capitalization, which was 2.7 trillion KRW on November 1, 2022, recently rose to around 16 trillion KRW.

To ensure the corporate value enhancement plan is not a one-time event, Meritz Financial Group will be the first domestic company to disclose the corporate value enhancement plan and its implementation status together with quarterly earnings announcements, and key executives will provide detailed explanations at investor presentations.

Since the first quarter of last year, to communicate with shareholders, Meritz Financial Group has held conference calls after quarterly earnings announcements where key executives including Vice Chairman and CEO Kim Yong-beom of the holding company, Vice Chairman Choi Hee-moon, CEO Kim Jung-hyun of Meritz Fire & Marine Insurance, and CEO Jang Won-jae of Meritz Securities answer investor questions.

From the first quarter of this year, Meritz Financial Group introduced the industry's first 'Open Investor Presentation,' where major executives directly answer questions collected from general shareholders.