[1mm Finance Talk] Four Major Financial Groups Jump 21% After Earnings... The Secret Was Shareholder Returns

Rose less than the Kospi during last year’s surge
But sentiment has reversed this year... up 16-30% in the past week
Record shareholder returns highlight the appeal of high-dividend stocks
The four major financial groups: "We will maintain our hi

The share prices of the four major financial groups in Korea are soaring. Although they had been viewed as having risen relatively less despite the stock market boom, over the past week they have far outpaced the KOSPI’s gains. Analysts say this is the result of shareholder return policies announced with earnings that exceeded market expectations, which have once again highlighted the appeal of high-dividend stocks. The four major financial groups plan to maintain their high-dividend policies this year as well in order to meet the requirements for separate taxation of dividend income.

According to the Korea Exchange on the 13th, the share prices of the four major financial groups have risen by an average of 21.9% based on the previous day’s closing prices since the announcement of their 2025 earnings. This is more than three times higher than the 6.8% gain in the KOSPI from the 5th to the 12th.

Bank stocks have traditionally been far removed from stocks that are heavily swayed by market sentiment. This is why they have been assessed as having risen relatively less even amid an unprecedented bull run. In fact, while the KOSPI has surged more than 54% since the fourth quarter of last year, bank stocks have gained only around 35%.

However, the mood has reversed since the earnings announcements. In detail, Hana Financial Group, which was the first among the four major financial groups to release its results, saw its share price climb 29.8%, from 100,100 won on January 30 to 130,000 won as of the previous day. This is in stark contrast to the situation before the earnings release, when its year-to-date share price increase was only about 7.2%. KB Financial Group, which announced its earnings on the 5th, also hit an all-time high as its share price jumped 20.7% in a week, from 139,500 won to 168,500 won. Shinhan Financial Group likewise recorded a 16.6% gain over the same period. Woori Financial Group, which announced its results on the 6th, closed at 39,150 won the previous day, up 20.6% since the earnings release, putting the 40,000-won level within reach just a little over two weeks after it broke through 30,000 won.

This was partly due to record earnings, but market watchers say the bigger reason is that the shareholder return policies announced alongside the results far exceeded market expectations. In particular, the four major financial groups, in response to the government’s policy on separate taxation of dividend income, sharply increased their fourth-quarter dividends per share in order to meet the criteria for high-dividend companies. To qualify as a high-dividend company, a firm must either pay out at least 40% of its net income as cash dividends (payout ratio), or pay out at least 25% as cash dividends and increase its annual dividend per share (DPS) by 10% or more compared with the previous year.

KB Financial Group sharply raised its dividend per share from 930 won in the third quarter of last year to 1,605 won in the fourth quarter, pushing its DPS to 4,367 won, up 37.6% from a year earlier. It is being evaluated as having significantly boosted market expectations by greatly increasing dividends while still maintaining its Common Equity Tier 1 (CET1) capital ratio at a record-high 13.79%. Shinhan Financial Group also raised its fourth-quarter dividend per share to 880 won from 570 won in the first through third quarters in order to meet the criteria for high-dividend companies. Its DPS came to 2,590 won, up 19.9% year-on-year.

Hana Financial Group likewise increased its dividend per share from 920 won in the third quarter to 1,366 won in the fourth quarter, resulting in a 14% year-on-year increase in DPS. Woori Financial Group raised its fourth-quarter dividend to 1,360 won per share, up 760 won from the third quarter, thereby satisfying the high-dividend company criteria. In addition, Woori Financial Group further increased its effective payout ratio by using reduced (tax-exempt) dividends.

Choi Jeonguk, an analyst at Hana Securities, said, "The reason bank stocks are on a rally after the earnings announcements is not because of a new factor, but because the appeal of bank stocks, which had been forgotten for some time, has come back into the spotlight." A financial industry official also said, "This round of earnings announcements places emphasis not only on earnings but also on shareholder returns," adding, "The most notable aspect is that each bank increased its fourth-quarter dividend in order to meet the criteria for high-dividend companies."

The four major financial groups plan to continue their high-dividend policies this year as well. KB Financial Group has established a principle of returning to shareholders any capital in excess of a CET1 ratio of 13%. Shinhan Financial Group has announced a plan to gradually raise its payout ratio by increasing its quarterly dividend per share to around 760 won this year. Woori Financial Group has decided to carry out shareholder returns totaling about 1.15 trillion won this year, the largest amount in its history. Hana Financial Group plans to pursue a share buyback program worth 400 billion won in the first half of this year.