Stock Prices Plunge Due to COVID-19... Financial Holding Company Chairmen Buy 40,000 Shares

Enhancing Corporate Value... Part of Responsible Management
Son Tae-seung, Chairman of Woori Financial, Holds the Most with 30,000 Shares

Chairmen of the four major financial holding companies are focusing on buying back their own shares amid the sharp stock price decline caused by the COVID-19 pandemic. Generally, a CEO's purchase of company shares is interpreted as a signal of undervaluation and is analyzed as part of responsible management aimed at "enhancing corporate value."

According to the Financial Supervisory Service's electronic disclosure system on the 14th, the CEOs of KB, Shinhan, Woori, and Hana Financial Holdings have purchased approximately 40,000 shares of their own companies from January this year, after the COVID-19 outbreak, until now.

The person who bought the most shares is Sohn Tae-seung, Chairman of Woori Financial Group. Including 5,000 shares purchased the day before, he bought a total of 30,000 shares during this period. He purchased 5,000 shares each in six rounds in January, March, April, and December of last year, and in August and September of this year. As a result, his total shareholding amounts to 98,127 shares.

Kim Jung-tae, Chairman of Hana Financial Group, also bought a total of 7,668 shares, purchasing 2,000 and 5,668 shares in February and April of last year, respectively. Chairman Kim's total shareholding stands at 65,668 shares. Cho Yong-byeong, Chairman of Shinhan Financial Group, increased his holdings to 13,580 shares by purchasing 1,580 shares in January last year.

However, Yoon Jong-kyu, Chairman of KB Financial Group, has not purchased any shares since the COVID-19 outbreak. His total shareholding is about 21,000 shares.

Typically, a CEO's purchase of company shares is regarded as the best effort to enhance corporate value. It shows that the market undervalues the stock and is also used as a means to express confidence in the company's future growth potential and performance. A banking industry official said, "The biggest reason for the CEO's share purchases is the sluggish stock price despite strong earnings in recent years," adding, "It is a way to express a strong will to show confidence in the performance."

In the case of Chairman Sohn, who purchased the most shares, the unique situation of Woori Financial Group pursuing "complete privatization" also influenced his actions. Woori Financial Group explained that Sohn's recent share purchases were made immediately after the Public Fund Management Committee's announcement on the "sale of remaining shares of Woori Financial Group" on the 9th.

If the Public Fund Management Committee's planned sale of a 10% stake in Woori Financial Group is realized, it will fulfill the dream of complete privatization after about 20 years. Chairman Sohn's share purchases are part of responsible management to facilitate the share sale. A Woori Financial Group official said, "We will actively cooperate in this sale process to support a successful 'complete privatization,'" adding, "It also expresses the will to achieve strong performance in the second half of the year and further upgrade the fundamentals."

However, despite the active share purchases by the chairmen of the four major financial holding companies, stock prices have yet to recover from their sluggish state. All four financial groups saw their stock prices plunge sharply after the COVID-19 outbreak, and despite the boom in the stock market, their prices have not returned to previous levels.

A financial industry official explained, "The continuous share purchases by CEOs ultimately stem from confidence in performance," adding, "Considering that the profitability of major financial holding companies is expected to improve further due to interest rate hikes in the second half of the year, this can be read as a favorable signal for stock price increases."

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