ID :
201815
Wed, 08/17/2011 - 09:23
Auther :
Shortlink :
https://oananews.org//node/201815
The shortlink copeid
Korean banking groups pay out hefty dividends
SEOUL, Aug. 17 (Yonhap) -- South Korean banking groups paid out higher portions of net profit in dividends than other listed companies in 2010, data showed Wednesday, amid concerns that the massive payouts of cash to shareholders could undermine their capital strength.
Industry leader Woori Finance Holdings Co. and three other financial services companies gave out a combined 975.4 billion won (US$907.8 million) in dividends last year, according to the data compiled by FNGuide Inc., a financial information provider.
No. 3 financial services company Shinhan Financial Group Inc. paid out the largest dividend of 586.2 billion won, followed by Woori Finance with 201.5 billion won and Hana Financial Group with 146.5 billion won. KB Financial Group Inc. doled out 41.1 billion won in cash to shareholders last year.
The dividend payout ratio, or the percentage of dividends to net profit, reached 46.6 percent for KB Financial, followed by Shinhan Financial with 24.6 percent and Woori Finance with 16.9 percent.
Their ratios far surpassed the average dividend payout ratio of 16.25 percent for local companies listed on the main bourse. The ratio for Hana Financial stood at 14.5 percent.
Market watchers said that local financial firms' high dividend payout ratios could erode banks' capital strength.
Given that foreign investors' stock ownership of local banks remains high, the provision of massive dividends merely helps them fatten their pockets, like in the case of U.S. buyout fund Lone Star Funds, which controls Korea Exchange Bank.
Kwon Hyouk-se, governor of the Financial Supervisory Service, warned Tuesday that local banking groups should refrain from paying out large dividends as they need to strengthen capital buffers down the road under stiffer capital rules.
Since the stricter capital rules called Basel III will be applied to local financial firms from 2013, they should replenish their equity capital further.
The average capital adequacy ratio for local banking groups stood at 13.48 percent as of end-March, down 0.04 percentage points from three months earlier.
Industry leader Woori Finance Holdings Co. and three other financial services companies gave out a combined 975.4 billion won (US$907.8 million) in dividends last year, according to the data compiled by FNGuide Inc., a financial information provider.
No. 3 financial services company Shinhan Financial Group Inc. paid out the largest dividend of 586.2 billion won, followed by Woori Finance with 201.5 billion won and Hana Financial Group with 146.5 billion won. KB Financial Group Inc. doled out 41.1 billion won in cash to shareholders last year.
The dividend payout ratio, or the percentage of dividends to net profit, reached 46.6 percent for KB Financial, followed by Shinhan Financial with 24.6 percent and Woori Finance with 16.9 percent.
Their ratios far surpassed the average dividend payout ratio of 16.25 percent for local companies listed on the main bourse. The ratio for Hana Financial stood at 14.5 percent.
Market watchers said that local financial firms' high dividend payout ratios could erode banks' capital strength.
Given that foreign investors' stock ownership of local banks remains high, the provision of massive dividends merely helps them fatten their pockets, like in the case of U.S. buyout fund Lone Star Funds, which controls Korea Exchange Bank.
Kwon Hyouk-se, governor of the Financial Supervisory Service, warned Tuesday that local banking groups should refrain from paying out large dividends as they need to strengthen capital buffers down the road under stiffer capital rules.
Since the stricter capital rules called Basel III will be applied to local financial firms from 2013, they should replenish their equity capital further.
The average capital adequacy ratio for local banking groups stood at 13.48 percent as of end-March, down 0.04 percentage points from three months earlier.
