NongHyup in quandary over dividend policy
Posted : 2021-02-22 16:54
Updated : 2021-02-22 16:56
NongHyup Financial Group Chairman Son Byung-hwan speaks during its management strategy meeting at its headquarters in Seoul, Feb. 3. Yonhap
By Lee Min-hyung
NongHyup (NH) Financial Group is trying to decide on whether to reduce its dividend offerings, as financial watchdogs ratchet up pressure on the firm to maintain financial soundness by scaling down its profit returns amid the pandemic uncertainty.
In 2020, the group paid dividends worth 500 billion won ($450.7 million) to its sole shareholder ― the National Agricultural Cooperative Federation (NACF). NH's dividend payout ratio last year reached 28 percent.
But it remains unclear whether the company will be able to keep a similar level of dividend offerings this year, as other commercial banking groups are cutting their rates down to around 20 percent amid authorities' growing pressure. The Financial Supervisory Service (FSS) recommends major financial holding firms here provide no more than 20 percent of their net incomes to shareholders for dividends.