Kim Ji-wan BNK Financial Chairman Unveils Share Buyback Plan... "All In on Stock Price Boost"

[Asia Economy Reporter Kim Min-young] Kim Ji-wan, chairman of BNK Financial Group, has taken the lead to boost the stock price. This is the first time BNK Financial has repurchased its own shares since the holding company was established in 2011.

According to the financial sector on the 4th, BNK Financial signed a trust contract for treasury stock acquisition with Korea Investment & Securities the day before and decided to purchase treasury shares worth 7 billion KRW.

The reason is to enhance shareholder value. BNK Financial stated that it decided to repurchase its own shares to stabilize the stock price, thereby improving corporate and shareholder value and strengthening its commitment to responsible management.

In the financial sector, although the purchase scale may be insufficient, considering the limited capital capacity compared to other banks, it is interpreted as the best effort made for shareholders. Eun Kyung-wan, a researcher at Meritz Securities, evaluated, “Rather than an immediate stock price increase effect, attention should be paid to confirming the management’s intention to stabilize the stock price.”

Despite a 12% increase in net profit last year compared to the previous year and continuous improvement in soundness, BNK Financial’s stock price has fallen about 20% compared to the end of the previous year due to increased uncertainty about the economic outlook.

The market expects news of treasury stock repurchases across bank stocks, led by BNK Financial. This is because active measures such as treasury stock repurchases and cancellation of held treasury shares are the only solutions to defend the stock price, which is falling helplessly.

Currently, the banking sector’s valuation has plummeted, falling below the level during the financial crisis. This is due to lingering noise such as the Lime Asset Management incident and overseas interest rate-linked derivative-linked funds (DLF), along with concerns about profitability and soundness arising simultaneously due to the spread of the novel coronavirus infection (COVID-19). It is also analyzed that the stock market supply and demand flow of foreign selling and individual buying contributes to the exclusion of bank stocks, which are macro stocks.

Furthermore, the expansion of public roles such as loan maturity extensions, repayment deferrals, and interest rate reductions is also negatively affecting investor sentiment.

Chairman Kim said, “Based on last year’s performance, BNK Financial’s dividend payout ratio was 20.9%, up 1.4 percentage points from the previous year, and we are continuously striving to enhance shareholder value. We will continue to work to become a shareholder-friendly company through continuous improvement of profitability and stable management of capital ratios, thereby enhancing corporate value.”

This content was produced with the assistance of AI translation services.