South Korea’s major banking groups expressed a willingness to review various ways to increase their dividend payouts -- including interim dividends – amid government restrictions that have placed a cap on earnings distribution, in shareholders meetings held through Friday.

In an apparent bid to quell shareholders’ growing complaints over the firms’ decision to heed the Financial Supervisory Service’s earlier “recommendation” to keep their dividend payouts below 20 percent of net income in the first half, commercial banks including KB, Shinhan, Hana and Woori vowed to boost shareholder value.

KB Financial Group Chairman Yoon Jong-kyoo said he believes the payout ratio should at least reach 30 percent in a shareholders meeting held in the firm’s headquarters in western Seoul on Friday.

The firm will consider interim or quarterly payouts as alternative options, after reviewing the circumstances, he added.

Earlier, the group decided to reduce the rate to 20 percent, or 1,770 won ($1.60) per share, from 26 percent in 2020.

KB’s industry rival Woori Financial Group took a step further in its shareholders meeting held the same day and passed a resolution drawn up by its board members earlier this month to set aside its capital reserve worth 4 trillion won to funnel earnings available for dividend payouts.

Hana Financial Group -- the only one among the five major banking groups here that pay interim dividends – echoed KB in saying that it would focus on shareholder value.

Despite COVID-19 woes that swept across the nation’s financial sector last year, KB and Hana reported record-high net profits with increased brokerage commissions from the monthslong bullish stock market offsetting losses in its flagship banking units. The robust earnings, however, fueled further discontent of “lower-than-expected” dividend payouts among shareholders.

KB ranked No. 1 in terms of annual net profit among major financial groups last year, after amassing a record-high annual net profit of 3.45 trillion won, up 4.3 percent from 2019. Hana also reported an all-time high net profit of 2.63 trillion won in the cited period, up 10.3 percent on-year.

Shinhan Financial Group, which held its shareholders meeting Thursday, decided to adopt quarterly dividends and actively review a stock buyback plan.

NH Financial Group, another major banking group here, announced Friday that it would also lower its payout ratio to 20 percent and it would be further discussed at its upcoming shareholders meeting scheduled March 31.

Under the FSC’s guidance, KB, Hana, Woori and NH have lowered their dividend payout ratio to 20 percent, except for Shinhan, which determined the ratio at 22.7 percent, exceeding the authority’s 20 percent dividend cap, but down 3.3 percentage points on-year. The FSC’s decision came as the banking groups, excluding Shinhan, all failed to pass its stress test.

By Jung Min-kyung (mkjung@heraldcorp.com)