Align Partners puts pressure on financial holding firms for more dividends

Align Partners puts pressure on financial holding firms for more dividends [Image source: Align Partners Facebook]

Align Partners Capital Management, a South Korean activist fund, called for dividends of at least 50 percent of net profit from seven listed financial holding companies, according to a shareholder proposal unveiled in advance on Wednesday.

If the holding companies fail to come up with a plan to enhance shareholder value by Feb. 9, Align Partners said it will table its demand at the shareholders’ meetings of the seven holding companies scheduled for the end of March.

Align Partners plans to propose a cash dividend of common stock at a level higher compared to the seven holding companies, while recommending them to introduce a mid-term shareholder return policy that sets the total shareholder return rate to at least 50 percent of net profit, including dividends, buyback and retirement of treasury shares from fiscal year 2023.

Earlier, Align Partners sent an open shareholder letter to the board of directors of the seven listed bank holding companies on Jan. 2, proposing that they should steadily accumulate a portion of their annual earnings each year until their common stock capital ratio reaches 13 percent, and return the full amount of the earnings reserve above the 13 percent threshold to shareholders.

Bank holding companies’ stock prices soared around 15 percent this year after Align Partners demanded to improve shareholder value.