This article was posted on February 07, 2023 at 17:06
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Alin Partners Asset Management welcomed the capital policy and shareholder return policy announced by KB Financial Group, and announced that it would not carry out the originally planned shareholder offer limited to KB Financial Group. In addition, he added that other listed financial holding companies, whose policies are to be published on the 8th and 9th, should follow KB Financial’s changes.
According to the financial investment industry on the 7th, KB Financial Group announced a 2022 shareholder return rate of 33% (dividend ratio 26%, treasury stock buyback 7%) on the same day. Not only is this the highest shareholder return ratio in the history of the banking industry, but also KB Financial Group itself raised its shareholder return by 7 percentage points compared to the same period last year. The expected range initially expected by Align Partners is said to have been significantly exceeded.
The core of the capital policy announced by KB Financial is that shareholder returns will, in principle, be achieved for a CET1 ratio (common equity ratio) of 13% or higher, and the asset growth rate will be controlled at the level of nominal GDP . growth rate for efficient capital allocation. Additionally, given the undervaluation, it is interpreted to mean that it will actively buy back and cancel treasury stock in the future.
This is in line with the level of demand in Alin Partners’ shareholder proposal. An official from Align Partners said, “We intend to make a comprehensive summary and announcement of the future shareholder return rate, which the policy announced today entails, immediately after February 9th.” We will not make a shareholder proposal at the general meeting of shareholders. the finance company.”
Although the announcement was not in the form of a board resolution and fair disclosure originally requested by Align, the fact that KB Financial Group management went through detailed discussions through the board of directors, and that the specific policy was posted in the announcement of the day’s settlement performance and explained in detail through a conference call It is said to have been greatly appreciated.
An official from Align Partners said, “As a result of the review, this is not only a legally binding announcement, but also an obligation to follow the announcement faithfully.” If the policy is not implemented properly, we will be ready to play the necessary role.”
Alin Partners encourages other financial holding companies, which are scheduled to be announced on the 8th and 9th, to announce capital allocation policies and shareholder return policies that meet the current requirements, just like KB Financial. On January 9, Align Partners held an open meeting on the banking stock campaign, explained the reasons for the chronic undervaluation of domestic listed financial holding companies, and demanded that financial holding companies improve their corporate value.
At the time, Alin Partners strongly insisted that a capital allocation policy based on the CET1 ratio should be introduced. The position is to maintain the CET1 ratio of 10.5% for commercial banks and 9.5% for local banks, which are the current regulatory levels, in order to maintain the financial soundness of banks at an excellent level, while maintaining an annual dividend payout ratio of at least 30 . % above the regulatory level.
In addition, he pointed out that a shareholder return policy should be announced in the medium to long term in order to establish a virtuous cycle structure that grows together with investors. At the time, CEO Lee Chang-hwan said, “Starting from fiscal year 2023, the total rate of return to shareholders, including dividends and redemption/retirement, should be 50% of net profit in principle.” “According to the level of undervaluation, use the purchase and retirement of treasury shares.”