Another Share Buyback... Kim Jeong-tae's Responsible Management

Stock Price Slump Amid Confident Outlook on Future Earnings

Kim Jung-tae, Chairman of Hana Financial Group

[Asia Economy Reporter Kim Min-young] Kim Jung-tae, Chairman of Hana Financial Group, has taken responsibility management by purchasing additional treasury shares. As the stock price fell into a slump amid the suspension of domestic and international investor relations (IR) events due to the prolonged COVID-19 pandemic, this move is interpreted as both a direct defense and a demonstration of confidence in future performance.

According to Hana Financial on the 8th, Chairman Kim purchased 5,668 treasury shares on the market on the 6th. The average price per share was 22,550 KRW, totaling 127,813,400 KRW. Typically, a CEO's purchase of treasury shares is interpreted as a signal of undervaluation.

This is the second treasury share purchase by Chairman Kim this year. He bought 2,000 treasury shares on February 5th at an average price of 33,000 KRW per share.

As a result, Chairman Kim's total treasury shares holdings increased to 65,668 shares. A Hana Financial official stated, "This shows confidence in future performance and a willingness to boost the stock price through responsible management."

Since his inauguration in 2012, Chairman Kim has been actively purchasing treasury shares. He bought 2,000 shares in 2013, the year after his inauguration, 3,725 shares in 2015, and 1,500 shares in 2018.

Since last year, he has been buying shares twice a year. In June and July of last year, Chairman Kim purchased 3,400 and 2,000 treasury shares respectively.

Executives of Hana Financial are also continuing to purchase treasury shares. Last month, 15 executives at the level of managing director or higher bought a total of 13,154 treasury shares.

Vice Chairman Ham Young-joo also joined the treasury share purchase trend. On the 18th of last month, Vice Chairman Ham bought 5,000 shares on the market. This was his first purchase in about two years and three months since December 5, 2017, bringing his total holdings to 10,132 shares.

The stock price of Hana Financial has not been able to escape a downward trend. After reaching a peak of 56,000 KRW in January 2018, the stock price plummeted to 18,450 KRW on the 20th of last month. However, it managed to rise more than 30% from the low point, riding the rebound trend in the Korea Exchange. The closing price on the 7th was 24,350 KRW.

However, due to the overall undervaluation of financial stocks and the inevitable deterioration of financial sector earnings caused by COVID-19, the future direction of the stock price remains uncertain.

The earnings outlook for Hana Financial this year is also bleak. Lee Byung-geon, a researcher at DB Financial Investment, forecasted Hana Financial's first-quarter net income attributable to controlling shareholders at 478 billion KRW, reflecting a decline in net interest margin (NIM), a decrease in non-interest income, and non-monetary translation losses due to the rise in the won-dollar exchange rate. This is a 20.5% downward revision from the previous forecast. While citing financial authorities' recommendations to refrain from treasury share purchases and dividends as uncertainty factors for Hana Financial, the researcher analyzed that "among major banks, the degree of undervaluation is the most severe."

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