Why Are KakaoBank Executives Engaging in Consecutive Share Buybacks?

[Asia Economy Reporter Buaeri] Executives at KakaoBank have joined the ranks of purchasing company shares.

According to the Dart electronic disclosure system on the 9th, Heo Jaeyoung, Head of Financial Consumer Protection at KakaoBank, Ahn Hyuncheol, Chief Research and Development Officer, and Lee Jiwoon, Head of Risk Management, purchased a total of 11,400 company shares.

Heo purchased 3,400 shares, Ahn bought 5,000 shares, and Lee acquired 3,000 shares through on-market transactions.

On the 5th, Kim Seok, Chief Strategy Officer (CSO) of KakaoBank, purchased 10,000 shares, and Yoo Hobum, Head of Internal Audit, bought 3,285 shares.

Share repurchases refer to a company buying back its own shares to stabilize stock prices and enhance shareholder value. It is interpreted that KakaoBank has taken steps to boost its stock price amid recent sluggish performance.

Recently, KakaoBank’s stock price has been underperforming, falling below the initial public offering price of 39,000 KRW. On the 1st, the stock price dropped to the 20,000 KRW range, recording 28,950 KRW, a 16.8% decline from 34,800 KRW on the 27th of last month. Compared to the intraday high of 94,400 KRW on August 18 last year, it has plummeted by 70%.

Moreover, concerns about the slowdown in KakaoBank’s growth rate have emerged in the securities industry. Researcher Lee Byunggeon of DB Financial Investment set KakaoBank’s target price at 24,600 KRW, lower than the market price. Lee pointed out the “gap between ideal and reality,” stating that although KakaoBank wants to be a platform bank, it is subject to banking regulations and thus must apply the growth logic of traditional banks.

Lee said, “It is clear that KakaoBank’s growth rate is declining. While entering new markets such as mortgage loans excluding jeonse (key money deposit loans) and loans for self-employed individuals presents new growth opportunities, the mortgage loan market excluding jeonse has significantly contracted to about 10 trillion KRW annually based on the combined figures of the five major banks.” He added, “It is also important to consider that the growth potential of household loans is gradually decreasing due to interest rate hikes and regulations aimed at curbing household loan growth.”

Meanwhile, a KakaoBank official stated, “We understand that the executives voluntarily purchased company shares as part of responsible management to enhance shareholder value.”

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