The headquarters of KB Financial Group in Yeouido (left) and Hana Financial Group in Myeong-dong, Seoul. (Photos courtesy of each company)
The headquarters of KB Financial Group in Yeouido (left) and Hana Financial Group in Myeong-dong, Seoul. (Photos courtesy of each company)

Global asset manager Capital Group is rapidly increasing its holdings in South Korea’s leading financial institutions, positioning itself as the second-largest shareholder in both KB Financial Group and Hana Financial Group.

In a filing Friday with South Korea’s Financial Services Commission via the Dart system, Capital Group disclosed that it had purchased 3.22 million shares of KB Financial between Nov. 29 and Dec. 31, raising its stake from 7.24 percent to 8.06 percent. The acquisition makes Capital Group the second-largest shareholder in KB, following the National Pension Service, which holds 8.21 percent.

Industry insiders suggest Capital’s investments are driven by efforts to enhance value and improve shareholder returns, both by the banks and within the broader financial sector. KB and Hana have outlined strategies to boost corporate value, in line with the government’s “Corporate Value-up Program.”

KB’s plan focuses on returning excess capital to shareholders, with capital beyond a 13 percent CET1 ratio to be used for returns by the end of 2024. Any capital exceeding 13.5 percent in 2025 will be allocated to stock buybacks. Hana, aiming for a strong CET1 and return on equity, plans to increase its shareholder return rate to 50 percent by 2027.

Despite an overall slump in the Korean stock market, the banking sector performed strongly in 2024. KB Financial’s stock surged 89 percent, rising from 53,600 won ($36.34) in January to a peak of 101,200 won in December, before settling around 87,000 won. Hana’s shares gained 60 percent, climbing to 68,800 won in August, then recently hovering around 58,000 won. The KRX Banking Index rose 23.87 percent, significantly outperforming the benchmark Kospi, which fell 10.12 percent on-year.

Founded in 1931, Capital Group is ranked among the 10 largest asset managers in the world, with over $2.5 trillion in assets under management. The firm is known for its long-term, active investment approach, focusing on fundamental research and collaboration across diverse portfolio managers.