Hana Financial may reduce dividend payout for 2013

SEOUL, July 24 (Yonhap) -- Hana Financial Group Inc., South Korea's No. 3 banking group, is likely to take a prudent stance in deciding the amount of its yearly dividend payout for the year by reflecting tough business conditions in the second half, officials said Wednesday.

Hana Financial has decided to pay an interim dividend worth 43.3 billion won (US$38.8 million) or 150 won per share, eliciting criticism that the group may try to dole out high dividends even in the face of falling profits. Apparently pressured by the financial regulator, Hana Financial cut the dividends by one-fourth from 200 won per share.

"The group plans to take a prudent approach in deciding the yearly dividend by gauging business conditions in the second half, and also we are taking into account shareholders' value," said an official at the group.

The financial regulator has called for local banking groups to refrain from excessively paying out dividends, given worsening profitability and the protracted economic slowdown.

The Financial Supervisory Service (FSS) has started to assess the adequacy of dividend payouts by banking groups and their bank affiliates, urging local banks to beef up their financial soundness.

Industry watchers said that other banking groups are likely to follow suit in curbing dividend payouts for fiscal 2013.

In 2012, Hana Financial paid out a dividend of 450 won per share. No. 4 banking group Shinhan Financial Group offered 700 won per share in dividends.

Local banks have seen their earnings fall as a long streak of low rates have squeezed their profit margins.

In the first quarter, Korean bank's combined earnings fell 45 percent on-year to 1.8 trillion won, according to the FSS.

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