South Korean bank share prices are on the upswing ahead of this week’s shareholders’ meeting season on expectations for largest-ever dividend payout with rates doubling the bank deposit yield.

According to the banking industry Wednesday, the nation’s major financial holding companies including Shinhan Financial Group Co., KB Financial Group Inc. and Hana Financial Group Inc. will pay out a combined record-high 1.16 trillion won ($1 billion) dividend after 2015 financial year settlements, up 22.6 percent from the previous year. Shinhan Financial Group will return 631 billion won (1,200 won per share), KB Financial Group 378.6 billion won (980 won per share) and Hana Financial Group 148 billion won (500 won per share) to shareholders.

Industrial Bank of Korea (IBK) slightly upped payout to 294.4 billion won (450 won per share) while Woori Bank plans 336.6 billion won (including interim dividend payout) similar to last year’s level. The financial companies’ dividend payouts will be approved at their shareholders’ meetings starting today.

Bank stocks gained 10 percent on average this month on bargain-hunting on top of dividend appeal, making up for the loss of 7.1 percent over the last two months upon concerns for instability from corporate restructuring and another rate cut by the Bank of Korea. Shares of KB Financial Group and Shinhan Financial Group rose 10.4 percent and 9.6 percent, respectively, this month.

Lee Byung-gun, an analyst at Dongbu Securities Co. recommended buy in bank shares whose dividends pay more than bank deposits. The dividend in shares of Woori Bank is expected to pay 5.3 percent, Industrial Bank of Korea 3.9 percent, KB Financial Group 3.7 percent, Hana Financial Group 3.5 percent and Shinhan Financial Group 3.1 percent for this year.

By Kim Tae-joon

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