Hana Financial Group Preparing for Interim Dividends Among Financial Holdings... How Much Will It Increase?

Final Decision to Be Made at Board Meeting End of This Month
Market Estimated at Around 700~800 Won per Share

[Asia Economy Reporter Kiho Sung] Hana Financial Group will kick off the dividend parade for financial holding companies in the second half of this year sometime this month. Although Hana Financial’s interim dividend is usually paid annually, attention is focused on how much the dividend amount will increase following the lifting of the financial authorities’ dividend restriction measures at the end of last month. The size of other financial holding companies can also be gauged based on Hana Financial’s interim dividend amount.

According to the financial sector on the 1st, Hana Financial closed its shareholder registry yesterday to confirm the shareholders eligible for the interim dividend. The final decision on whether to pay the interim dividend will be made at the board meeting at the end of this month after the Q2 earnings announcement.

The market is taking Hana Financial’s dividend as a given. Last year, despite posting record-high earnings, Hana Financial lowered its payout ratio to 20% following the financial authorities’ recommendation and set the dividend per share at 1,350 KRW (1,850 KRW including the interim dividend), which was a 16% decrease compared to 2019.

However, since the financial authorities’ dividend restriction recommendation has ended, the financial sector expects Hana Financial to proceed with the interim dividend around August this year as well. Hana Financial is the only one among the five major financial holding companies to have paid interim dividends every year. In particular, since Chairman Kim Jung-tae’s appointment, there has never been a year without an interim dividend.

The focus is on the size of Hana Financial’s dividend. Currently, it is expected that a higher dividend will be paid thanks to better-than-usual earnings. Hana Financial posted a consolidated net profit of 852 billion KRW in Q1 this year. It is also forecasted to record a net profit of over 800 billion KRW in Q2. If this situation continues, the annual net profit is expected to exceed 3 trillion KRW for the first time ever. Additionally, Hana Financial’s common equity tier 1 capital ratio was 14.1% as of Q1, the highest among financial holding companies, indicating sufficient dividend capacity, which is also positive.

Hana Financial increased its interim dividend every year from 2013 to 2019, raising the dividend per share to 500 KRW. Even last year, when the overall economy was depressed due to COVID-19, the interim dividend was maintained at 500 KRW per share.

The financial sector estimates this interim dividend to be around 700 to 800 KRW per share. The recent soaring stock price of Hana Financial is also a factor raising expectations. On the 4th of last month, Hana Financial’s stock price hit a 52-week high of 48,000 KRW during trading, and on the 28th, it again rose to the 48,000 KRW level.

A financial sector official said, "With the high possibility of interim dividends from financial holding companies, attention is naturally focused on the size of Hana Financial’s interim dividend, which is the first to start. While interim dividends have a positive effect of alleviating concerns about ex-dividend price drops, the more important issue is how much the total dividend payout can be expanded."

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