Will bank, financial group heads’ stock buybacks boost share prices?

KB Financial chair Yang Jong-hee / Yonhap

The heads of financial groups and banks are rushing to increase holdings of their firm’s stocks in a collective effort to boost share prices to maximize shareholder returns, market watchers said Friday. Buying back stocks reduces the number of total outstanding issues, raising dividends per share.Included are the chairmen of KB Financial Group, Shinhan Financial Group, BNK Financial Group and JB Financial Group, as well as the CEOs of Shinhan Bank and Hana Bank.They expect corporate tax cuts for buying back stocks and boosting dividend payouts to shareholders as part of the government’s Corporate Value-up Program.The financial drive of the Yoon Suk Yeol administration aims to rejuvenate the chronically stagnant local stock market. Specifics of this drive are set to be unveiled in the tax revisions scheduled for July.KB Financial chair Yang Jong-hee purchased 5,000 shares of the group at 77,000 won ($55.56) per stock last month, raising his total ownership to 5,914 issues. Shinhan Bank CEO Jung Sang-hyuk bought 210 million won worth of Shinhan Financial stocks at a per-share price of 42,000 won Wednesday. His total stock ownership reached 13,551 issues, up from 8,551.Early this month, JB Financial Group Chairman Kim Ki-hong bought 20,000 shares of the group at 12,577 won per stock. Seven group executives also bought 25,708 shares.In February, BNK Financial Group Chairman Bin Dae-in and 67 group executives bought 210,000 shares of the group.

The current valuations of their stocks vary widely.Yang incurred an 18 percent drop in valuation. The JB Financial Group chair and Shinhan Bank CEO saw a 4 percent and 1 percent drop, respectively.Hana Bank CEO Lee Seung-lyul, on the other hand, netted a 36 percent increase in valuation.The stock buyback is aimed at bolstering corporate value, according to industry officials.”The [KB] chairman’s stock buyback is expected to significantly bolster corporate earnings, aligning with the government’s Corporate Value-up initiative,” a KB Financial Group official said. “Also strengthened will be shareholder returns and responsible management.”JB Financial Group said the group CEO and executives buying back stocks illustrates their “commitment to the group’s long-term growth and responsible management.”Meanwhile, financial shares largely remain undervalued, as indicated by the below-1 price-to-book ratio (PBR).The ratio is calculated as market capitalization divided by net assets.A figure below one means the share price falls short of corporate assets.As of Friday, the average PBR of seven financial groups stands at 0.35. DGB Financial is the most undervalued among them, with a PBR of 0.22, while JB Financial appears to be the least undervalued, with a PBR 카지노사이트킹 of 0.46.

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