"Value-Up Leading" Financial Holding Company Executives Passive on Treasury Stock Acquisition?

Announcement of Corporate Value Enhancement Plans by 4 Major Financial Holding Groups... Consecutive Domestic and Overseas IR
Jin Ok-dong, Shinhan Financial Chairman, Holds 18,937 Shares Worth 1 Billion KRW... Largest Holder
Yang Jong-hee, KB Financial Chairman, Acquires Additional 5,000 Treasury Shares This Year
Among Bank Presidents, Jung Sang-hyuk of Shinhan Bank Makes the Largest Additional Purchase with 8,389 Shares
Hana Financial Executives All Hold Treasury Shares Through Employee Stock Ownership Association

Since the beginning of the year, major financial holding companies have announced group-level plans to enhance corporate value and have been holding domestic and international investor relations (IR) sessions, claiming to lead the government-driven 'Corporate Value-Up Program.' However, it has been revealed that only some holding company executives have increased their holdings of company shares.

According to the Financial Supervisory Service and the four major financial holding companies?KB Financial, Shinhan, Hana, and Woori Financial?as of the end of September, Jin Ok-dong, chairman of Shinhan Financial Group, held 18,937 shares of treasury stock. Based on the closing price of Shinhan Financial Group (Shinhan Jiju) on the 15th (53,700 KRW), this amounts to approximately 1.01691 billion KRW, the highest among the chairmen of the four major financial holding companies.

Hahm Young-joo, chairman of Hana Financial Group, and Yang Jong-hee, chairman of KB Financial, hold 10,132 and 5,914 shares of treasury stock, respectively. The value of Chairman Hahm’s holdings is 598.8 million KRW, and Chairman Yang’s holdings are valued at 529.89 million KRW. Chairman Yang acquired an additional 5,000 shares of treasury stock this year. Lim Jong-ryong, chairman of Woori Financial Group, holds 10,000 shares worth 158.9 million KRW.

Among bank presidents, Shinhan Bank President Jung Sang-hyuk made the largest additional purchase. Listed as a non-executive director of the holding company, President Jung held 16,940 shares as of the end of September, valued at 727.68 million KRW based on the closing price on the 15th. He purchased an additional 8,389 shares this year.

Lee Seung-yeol, president of Hana Bank and also vice chairman of the holding company, holds 2,600 shares worth 153 million KRW, an increase of 500 shares this year. Although not listed as a holding company executive, Jo Byung-kyu, president of Woori Bank, reportedly purchased 5,000 shares of Woori Financial Group treasury stock in May. Lee Jae-geun, president of KB Kookmin Bank, who has not made any additional purchases this year, holds 1,119 shares worth 100.26 million KRW.

Looking at the overall status of executives by holding company, excluding outside directors, 24 out of 25 key executives at KB Financial (an average of 1,372 shares) held treasury stock. Kim Jae-gwan, executive vice president in charge of finance, holds 4,827 shares following Chairman Yang. Seo Young-ho, head of the Global Business Division (executive vice president), Kwon Bong-jung, head of the IR division (senior managing director), and Jung Jin-ho, head of the DT division (deputy president), each hold more than 2,000 shares.

Next, at Shinhan Financial, including shares held by the employee stock ownership association, 9 out of 10 key executives (an average of 8,163 shares) hold treasury stock. Lee In-gyun, executive vice president of the operations division, holds 10,576 shares, and Kim Ji-on, managing director of the audit department, holds 9,297 shares. At Woori Financial, 8 out of 10 executives (an average of 5,932 shares) hold treasury stock. Lee Sung-wook, executive vice president of finance, and Jung Kyu-hwang, vice president and compliance officer, each hold 16,000 and 11,741 shares, respectively, more than Chairman Lim.

At Hana Financial, 12 out of 23 key executives listed in the business report have acquired and hold treasury stock. However, in Hana Financial’s case, all disclosed key executives acquire treasury stock through the employee stock ownership system, but some are not included in the disclosure. Besides President Lee, Kang Sung-mook, CEO of Hana Securities and also vice chairman of the holding company, holds the most with 3,926 shares, and Park Geun-young, CEO of Hana Financial TI and also vice president of the holding company, holds 2,632 shares.

Generally, additional purchases of treasury stock by key executives are interpreted as a sign of willingness to boost stock prices and a commitment to responsible management. As financial authorities are determined to improve the structure of the undervalued domestic stock market, there are calls for key executives to actively purchase treasury stock in addition to improving core investment indicators such as shareholder return ratio, Common Equity Tier 1 (CET1) ratio, and return on equity (ROE).

A senior official in the financial investment industry explained, "Building trust with the market is the first task to increase corporate value," adding, "In line with the government’s 'Corporate Value-Up Program,' efforts to improve mid- to long-term investment indicators, as well as the management’s additional purchases of treasury stock, are necessary to continuously demonstrate a commitment to responsible management to the market."