Tiếng ViệtThe foreign ownership rate of Korea’s four major financial groups has reached an all-time high, due mainly to the government-led Corporate Value-up Program and increased shareholder return policies of the country’s financial giants.
According to the financial industry on Monday, the average stakes held by foreign investors over the four major financial groups — KB, Shinhan, Hana and Woori — stood at 62.7 percent, as of Friday.
This is the highest figure in five years and three months since February 2019, when the average foreign ownership rate stood at 58.2 percent on the listing date of Woori Financial Group, the last of the four major financial groups to enter the domestic stock market.
Compared to the overall stakes held by foreign investors of KOSPI-listed companies, which rose from 18.8 percent at the end of last year to 19.8 percent in mid-May, the foreign ownership rate in the financial holding companies represents a much higher increase, rising by 3.1 percentage points from 59.6 percent logged at the end of last year to 62.7 percent in the last week.
In particular, KB Financial Group’s foreign ownership rate showed the highest rise of nearly 5 percentage points during the period, reaching 76.8 percent, while Hana Financial Group stood at 70.1 percent, Shinhan’s rate at 61.2 percent and Woori’s at 42.5 percent.
As the rise in foreign investors’ stakes is attributed mainly to the groups’ increased shareholder return policies, the financial groups plan to continue attracting them.
During a meeting with global investors last Thursday, local time in New York, KB Financial Group Chairman Yang Jong-hee vowed “the group’s continual effort to return a significant portion of profits to shareholders.”
KB Financial Group also viewed foreign investors’ responses as positive, concerning its proactive shareholder return policy announced in the first quarter of this year.
Shinhan Financial Group Chairman Jin Ok-dong also emphasized during the recent New York event that the group will introduce strong shareholder return policy within the next two to three years, including share buybacks and cancellations, aiming to boost Shinhan’s relatively underperforming stock price compared to other major financial groups.
Despite global investors like Affinity, BNP Paribas and EQT conducting large-scale sales of Shinhan shares early this year, the group’s steady shareholder return policy has led to an increase in foreign ownership.
Hana Financial Group’s official also said the group’s plan for a buyback and cancellation of shares worth 300 billion won ($221 million), along with other measures, has contributed to the increase in the foreign ownership rate lately.
Woori Financial Group also said that its various shareholder return policies implemented last year, as well as its recent advancement into the securities business, has enhanced its corporate value, attracting further foreign investors.
However, the desirability of foreign investors’ increasing stakes in Korea’s major financial groups remains controversial.
Some market watchers view that the increasing presence of foreign investors has acted as a stabilizing force for the financial groups, enabling them to ensure capital adequacy rates through long-term investments in the groups.
Yet some are concerned over potentially witnessing a substantial amount of dividend yields outflowing from the Korean capital market to foreign investors annually, thereby reducing the national wealth and draining financial resources from the country.
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