Financial Holding Company Chairman's Insider Stock Buying After COVID-19 (Comprehensive)

Purpose of Enhancing Corporate Value
Son Tae-seung, Chairman of Woori Financial Group, Holds the Most with 35,000 Shares

Financial Services Commission Chairman Ko Seung-beom and financial holding company chairmen are taking a commemorative photo before the Financial Services Commission Chairman-Financial Holding Company Chairmen meeting held at the Korea Federation of Banks in Jung-gu, Seoul on the 10th. From the left, Sohn Tae-seung, Chairman of Woori Financial Group; Kim Jung-tae, Chairman of Hana Financial Group; Yoon Jong-kyu, Chairman of KB Financial Group; Chairman Ko; Cho Yong-byoung, Chairman of Shinhan Financial Group; Sohn Byung-hwan, Chairman of NH Nonghyup Financial Group. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kim Jin-ho] The chairpersons of the four major financial holding companies are focusing on purchasing their own shares, whose stock prices plummeted due to the COVID-19 pandemic. Generally, a CEO's purchase of their own 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 about 45,000 shares of their own stock from January this year, after the COVID-19 outbreak, until now.

The person who purchased 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 35,000 shares during this period. He purchased 5,000 shares each in seven rounds in January, March, April, August, and December of last year, and August and September of this year. As a result, his total holdings amount to 98,127 shares.

Kim Jung-tae, chairman of Hana Financial Group, also purchased a total of 7,668 shares, with 2,000 shares in February and 5,668 shares in April last year. Chairman Kim's total holdings stand 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 holdings amount to about 21,000 shares.

CEOs of major regional financial holding companies are also actively purchasing their own shares. Kim Ji-wan, chairman of BNK Financial Group, holds 110,000 shares. Kim Ki-hong, chairman of JB Financial Group, has purchased 80,500 shares.

Typically, a CEO's purchase of their own shares is evaluated as the best effort to enhance corporate value. It shows that the stock price is undervalued in the market 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 purchase of their own shares is the sluggish stock price despite strong performance 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 uniqueness of Woori Financial Group, which is pursuing "complete privatization," also had an influence. Woori Financial Group explained that Chairman Sohn's recent purchase of shares was 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 10% of Woori Financial Group's shares is realized, the dream of complete privatization will be achieved for the first time in about 20 years. Chairman Sohn's purchase of shares is 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 the successful 'complete privatization,'" adding, "It also expresses the will to demonstrate strong fundamentals by achieving good performance in the second half of the year."

However, despite the active purchase of shares by the chairpersons of the four major financial holding companies, stock prices have not yet escaped their sluggish state. All four financial holding companies saw their stock prices fall sharply after the COVID-19 outbreak, and despite the boom in the KOSPI market, their stock prices have not recovered to previous levels.

A financial industry official explained, "The continuous purchase of shares by CEOs is ultimately due to 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, it will be read as a favorable signal for stock price increases."

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