Four Major Financial Holding Companies Enter Annual General Meetings... CEO Reappointment and Interim Dividends in Focus

Likely to 'Appease Shareholders' with Shareholder Returns... Competition to Recruit Female Outside Directors Emerges as Key Issue

[Asia Economy Reporter Kwangho Lee] This week, the regular general meetings of shareholders for the four major domestic financial groups will be held. Key agenda items at these meetings include the reappointment of chief executive officers (CEOs), interim dividends, and the appointment of outside directors. According to the financial sector on the 22nd, Shinhan Financial Group's meeting will be held on the 25th, followed by KB, Hana, and Woori Financial Groups on the 26th.

Chairman Kim Jung-tae’s Reappointment... Attention on Park Seong-ho, Hana Bank President Nominee Joining Holding Company Board

The biggest focus is on the reappointment of Kim Jung-tae, Chairman of Hana Financial Group. Last month, Kim was recommended as the sole candidate for the next chairman by the Hana Financial Chairman Recommendation Committee. Continuing his one-year term, Chairman Kim is expected to accelerate efforts in digital financial innovation, strengthening global capabilities, and resolving labor union conflicts.

Attention is also drawn to Park Seong-ho, the nominee for Hana Bank President, joining the holding company’s board. Since 2018, Hana Financial has maintained a 'single inside director Kim Jung-tae' system, but with Park’s appointment as a non-executive director this year, the number of internal board members will increase to two. Park, who will assume the bank president position this year, will also serve on the holding company board and is being mentioned as a potential next chairman candidate.

There are expectations that Ji Seong-gyu, whose term as Hana Bank President is ending, will be appointed as vice chairman of the holding company. Additionally, the one-year reappointment of Kwon Kwang-seok, Woori Bank President, and the reappointment of Jin Ok-dong as a non-executive director of Shinhan Bank’s holding company will be confirmed at each financial group’s shareholder meeting.

Enhancing Shareholder Value through Dividend Expansion... Shinhan Financial Considering Bylaw Amendments and Quarterly Dividends from September

Enhancing shareholder value through dividend expansion is also a major issue. Financial companies have reduced their dividend payout ratios by up to 7 percentage points compared to the previous year, following the financial authorities’ recommendation to limit payout ratios to 20%. KB, Hana, and Woori Financial Groups have set their payout ratios around 20%, about 5 percentage points lower than last year, while Shinhan Financial has set it at 22.7%, slightly exceeding the financial authorities’ recommendation.

Accordingly, they plan to continuously increase shareholder value through shareholder return policies such as interim and year-end dividends.

Shinhan Financial, which holds the earliest shareholder meeting, is pushing to amend its bylaws to allow quarterly dividends. Accordingly, it plans to start quarterly dividends as early as September.

Woori Financial also plans to convert 4 trillion won of capital reserves into retained earnings to increase its capacity for dividends.

KB Financial and Hana Financial are actively discussing shareholder return plans through interim dividends and dividend expansions in the second half of the year.

Competition to Recruit Female Outside Directors... Each Holding Company Establishes ESG Dedicated Committees

Competition to recruit former financial authorities and female outside directors is also a hot topic at this week’s shareholder meetings. KB Kookmin Bank will not reappoint outside director Kwon Sook-kyo, an advisor at Kim & Chang Law Office, and instead plans to appoint Seo Tae-jong, former Senior Deputy Governor of the Financial Supervisory Service and chairman of the Financial Creditors Adjustment Committee.

Hana Financial has recruited advisor Kwon Sook-kyo to replace female outside director Cha Eun-young, a professor at Ewha Womans University, who has reached the maximum term. The immediate recruitment of a competitor’s outside director appears to reflect the limited pool of female outside directors.

Another focus of this week’s meetings is the establishment of ESG (Environmental, Social, and Governance) dedicated committees. Shinhan Financial will establish an ESG Strategy Committee, Hana Financial a Sustainable Management Committee, and Woori Financial an ESG Management Committee through bylaw amendments to be newly set up under their boards of directors.

KB Financial already launched an ESG Committee last year. As a result, all four major financial groups will have an 'ESG control tower' under their boards of directors.

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