Gwangju Bank Union Condemns JB Financial Group's 100 Billion Won New Capital Securities Issuance for Dividends

"Managing Weakened Regulatory Capital Ratio"
Criticism Over Excessive Dividends Through Issuance of High-Interest Bonds

The Gwangju Bank labor union held a press conference on the 4th to protest the plan to issue new hybrid capital securities worth 100 billion won. Photo by Gwangju Bank Labor Union

The Gwangju Bank labor union expressed concerns that the bank's plan to issue new capital securities worth 100 billion won is an action intended to support excessive dividends for JB Financial Group, which could negatively impact the regional economy.

At a press conference on the 4th, the Gwangju Bank labor union stated, "Recently, Gwangju Bank announced its plan to issue new capital securities worth 100 billion won," and added, "This move is aimed at managing the weakened regulatory capital ratio caused by JB Financial Group's excessive dividend demands. Is it appropriate to issue even high-interest bonds just to pay out excessive dividends?"

They continued, "In the financial sector, it is common practice to retain a portion of net profit or increase capital through equity financing to ensure continued growth and competitiveness. However, Chairman Kim Kihong of JB Financial Group is severely undermining the bank’s core strength-its equity capital-through his persistent demands for excessive dividends."

They further emphasized, "This undermines the fundamental role of a regional bank and raises concerns about damaging the public interest of regional banks by weakening their contribution to the local economy. As a result, the foundational purpose of regional banks-to revitalize the local economy and promote balanced regional development-is being compromised, making it increasingly difficult to provide sufficient funding to local residents."

Additionally, they said, "Chairman Kim Kihong’s short-term, performance-driven management for excessive dividends is once again being demonstrated by the record-high loan-to-deposit margins of both Gwangju Bank and Jeonbuk Bank, which have recently become an issue. In particular, next year, under the pretext of 'customer rebalancing,' they are preparing to restructure their customer base to extract even more interest income. This appears to be a decision that betrays the values of financial inclusivity, mutual growth, and trust with local residents-values that regional banks are supposed to uphold."

Park Man, head of the Gwangju Bank labor union, stated, "We demand the resignation of Chairman Kim Kihong for ignoring the public interest role of regional banks," and added, "We define this issuance of new capital securities as an act that imposes unnecessary interest costs on the company solely for the purpose of excessive dividends. We will report this breach of trust, which attempts to harm the company for the benefit of the controlling shareholder and himself, to the Financial Supervisory Service, and we will join forces with the local community to continue our struggle."

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