Foreign-affiliated SC Jeil Bank also decides on a dividend payout ratio within 20% level

[Asia Economy Reporter Kim Hyo-jin] Foreign bank SC First Bank also decided at its board meeting on the 15th to set the 2020 dividend payout ratio (the ratio of total dividends to net income) at within 20%, following the financial authorities' recommendation.

At the board meeting, it was reported that the total dividend amount was tentatively set at 49 billion KRW, which is within 20% of the provisional net profit. The exact net income and dividend payout ratio will be disclosed in the business report to be announced on the 31st.

Earlier, the financial authorities recommended a dividend payout ratio of within 20% to foreign banks simultaneously with the top five domestic financial holding companies. The reason given was, "As uncertainty increases due to the prolonged COVID-19 situation, financial holding companies and banks need to reduce dividends compared to previous years to strengthen their loss absorption capacity."

Accordingly, KB Financial Group and Hana Financial Group reduced their dividend payout ratios to 20%, cutting dividends by about 16-20%, while Woori Financial Group and the foreign bank Citibank Korea also set their dividend payout ratios at 20%. Only Shinhan Financial Group decided on a dividend payout ratio of 22.7%, exceeding the financial authorities' recommendation.

SC First Bank's dividend payout ratio was relatively high at 50.6% (cash dividends of 112 billion KRW) in 2018 and 45.68% (125 billion KRW) in 2017. At the end of 2019, SC First Bank's major shareholder, Standard Chartered NEA, received a total dividend of 655 billion KRW, resulting in a dividend payout ratio of 208.3%. However, this included an interim dividend of 500 billion KRW linked to the issuance of 600 billion KRW in 'amortizing' subordinated bonds scheduled for acquisition by the SC Group, which significantly increased the dividend amount.

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