"Shareholder Returns Must Be Supported by Profitability"..."We Will Definitely Keep Our Promises to the Market"

CEOs of Financial Firms Emphasize Value-Up at Hong Kong IR

▲From the 12th for three days, at the investment briefing session 'Invest K-Finance' held in Hong Kong, (from left in the photo) Lee Soo-yong, Asia-Pacific Regional Head of Carlyle, Kim Sung-hwan, CEO of Korea Investment & Securities, Ham Young-joo, Chairman of Hana Financial Group, Lee Bok-hyun, Governor of the Financial Supervisory Service, Jin Ok-dong, Chairman of Shinhan Financial Group, and Won Jong-gyu, CEO of Korean Reinsurance, are holding a meeting with overseas investors.
[Photo by Shinhan Financial Group]

"Shareholder returns that meet market expectations must be supported by sustainable profitability. Through securing sustainable profitability, we will actively pursue shareholder return policies that meet the standards of the global market." (Ham Young-joo, Chairman of Hana Financial Group)

"The greatest core of enhancing corporate value is faithfully keeping promises made to shareholders and the market." (Jin Ok-dong, Chairman of Shinhan Financial Group)

CEOs of financial institutions met with overseas investors in Hong Kong and emphasized their commitment to value-up (enhancing corporate value). They also mentioned that the background for pursuing value-up is South Korea’s demographic shift into a super-aged society and shared strategies and the roles of financial companies in response.

On the 13th (local time), the investment briefing (IR) held at the Grand Hyatt Hotel in Hong Kong was jointly organized by the Financial Supervisory Service’s Financial Hub Support Center, local governments including Seoul and Busan, and the financial sector. Following Singapore, London, and New York, this IR was arranged to communicate with overseas investors about the Korean financial industry, financial companies’ management strategies, and plans for enhancing corporate value. The event was attended by Chairman Ham, Chairman Jin, Kim Sung-hwan, CEO of Korea Investment & Securities, and Won Jong-gyu, CEO of Korean Re.

At the main event, Chairman Ham stated, "Hana Financial’s efforts to enhance corporate value for K-finance value-up are not a short-term event but a long-term plan that will continue with a long breath. We will continue sincere communication with investors going forward."

In response to an investor’s question about Shinhan Financial’s unique strategy to stand out in the global market, Chairman Jin said, "We are actively utilizing Shinhan’s excellent banking IT along with thorough localization strategies tailored to both emerging and developed markets. We will continue to knock on the global market with meticulous strategies and solid preparations."

Shinhan Financial plans to reduce 50 million shares through share buybacks and cancellations exceeding KRW 3 trillion by 2027, achieve a common equity tier 1 capital ratio (CET1) above 13%, a return on equity (ROE) of 10%, and a total shareholder return ratio of 50%. Hana Financial plans to expand the proportion of share buybacks and cancellations to achieve a total shareholder return ratio of 50% by 2027, manage the common equity tier 1 capital ratio between 13.0% and 13.5%, and consistently implement shareholder return policies within that range through improved capital management policies.

CEO Won said, "Currently, Korean Re has maintained a dividend payout ratio above 30% for several years and has also conducted a 20% stock dividend annually since 2022. We consider the company and shareholders to be on the same boat and will ensure a predictable dividend payout ratio." He added, "The decline in domestic market share is due to a management strategy focused on profitability by cutting off unprofitable items, and we will focus more on growth and profitability overseas."

At this event, investors also showed keen interest in domestic financial companies’ response strategies to South Korea’s demographic changes.

Hana Financial, which recently launched the senior-specialized brand "Hana The Next," emphasized that this is not only about profit generation but also a social responsibility and core strategy of financial companies. Chairman Ham said, "Our response strategy is to become a financial partner for senior customers beyond simple profit generation," adding, "It is a comprehensive service covering not only asset management but also housing, healthcare, and non-financial services."

Chairman Jin said, "The background for starting the value-up program is entering an aging society. In an aging society, supplementing the public pension income replacement rate is essential, which is also linked to the sustainability of the value-up program."

Before the joint IR, Financial Supervisory Service Governor Lee Bok-hyun attended individual meetings with major overseas investors of Hana Financial Group, including global large asset management firms. Governor Lee explained the Korean financial authorities’ support and efforts to advance regulations for K-finance value-up and answered questions from overseas analysts and portfolio managers attending the meetings.

Governor Lee emphasized, "We are striving to create a predictable and reasonable regulatory environment to enhance the credibility of the Korean financial market. Currently, the domestic financial industry has sufficient loss-absorbing capacity, and the financial authorities are organizing systems and regulatory environments to enable capital policies that meet global standards."

Chairman Ham said, "The background that allowed Hana Financial Group to announce a value-up plan that meets market expectations was the support and regulatory advancement efforts of domestic financial authorities. As a leader of K-finance, we will continue sincere communication with investors through various global communication activities and do our best for the success of value-up of Korean financial stocks."