'We need policy reforms': FSS chief pitches value-up program in Hong Kong

Major Korean financial firms, including Hana and Shinhan, presented their value-up initiatives in Hong Kong, aiming to attract foreign investment.

Financial Supervisory Service (FSS) Gov. Lee Bok-hyun, third from left, Hana Financial Group Chairman and CEO Ham Young-joo, fourth from left, and Shinhan Financial Group Chairman Jin Ok-dong, second from left, during an investor relations event in Hong Kong on Wednesday [FSS]

Major financial firms in Korea, including Hana Financial Group and Shinhan Financial Group, met with potential investors in Hong Kong to address the perceived depressed valuation of the country's domestic stocks.

The investor relations event, jointly organized by the Financial Supervisory Service (FSS), took place more than a month after the country released its Korea Value-up Index Index, the cornerstone of its government-led Corporate Value-up Program, to decidedly mixed market reactions regarding the exclusion of major banks.

Nevertheless, officials pitched the value-up program to Hong Kong's elite, discussing the oft-dubbed “Korea discount,” as part of a broader push to attract foreign capital to the country.

“Korea’s financial authority very much agrees that we need policy reforms to improve corporate governance and protect shareholders’ interest,” FSS Gov. Lee Bok-hyun said in his opening remarks at the event on Wednesday, outlining the government’s policy efforts to enhance shareholder return policies and corporate governance structure.

“Many Korean companies have employed growth-oriented strategies, such as utilizing retained earnings for more investment,” the governor noted. “It is now time for them to work to grow and, at the same time, share with their shareholders profits that they deserve to receive.”

Chief executives from Hana Financial Group, Shinhan Financial Group, Korea Investment & Securities and Korean Reinsurance Company joined Lee for a panel discussion.

Hana Financial Group Chairman and CEO Ham Young-joo introduced the firm’s recently announced value-up plans, emphasizing the firm's goal of achieving a total shareholder return ratio of 50 percent by 2027 by acquiring and retiring treasury stock.

“The level of shareholder returns that meets the market expectation is only possible with sustainable profitability, and a thorough assessment of the current situation and devising a practical action plan are key to the value-up initiative,” said Ham.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]