Lee Chan-jin Convenes Securities CEOs: "Record Earnings, Expand Dividends as a Model for General Companies"

"Securities Company CEO Meeting"
Calls for Proactive Dividend Expansion
Strengthening Market Volatility Management

Lee Chan-jin, Governor of the Financial Supervisory Service, convened the chief executive officers (CEOs) of securities firms and urged them to take proactive steps such as expanding dividends, as well as managing market volatility factors including margin loans.

Lee Chan-jin, Governor of the Financial Supervisory Service, is speaking at the Financial Consumer Protection Achievement Public Report Conference held at the Financial Supervisory Service in Yeouido, Seoul. Photo is not related to the article. Photo by Yonhap News.

At the “Securities Company CEO Meeting” held at the Korea Financial Investment Association in Yeouido, Seoul, on the afternoon of September 29, Governor Lee stated, “Although the KOSPI index has risen by more than 60 percent compared to the beginning of the year and recorded significant gains, most of the increase was driven by a handful of large-cap stocks, and market volatility has in fact expanded greatly. While this period requires most individual investors to endure difficult conditions, the securities industry has already achieved rapid growth, with its net profit for the first half of the year nearly matching the entire annual result from last year.”

Governor Lee urged securities company CEOs to actively pursue structural improvements in the capital market and to enhance shareholder value. He commented, “Recently, some efforts such as treasury share cancellations have been made in the securities industry for shareholder returns, but these still seem insufficient compared to market expectations.” He added, “I hope you set a benchmark for shareholder return practices, including dividends, among general companies, thereby becoming models for enhancing corporate value.” According to consolidated results for KOSPI-listed securities firms last year, the cash dividend payout ratio varied by company: Mirae Asset Securities at 11.1 percent, Kiwoom Securities at 27.1 percent, Samsung Securities at 35.5 percent, NH Investment & Securities at 47.3 percent, and Daishin Securities at 51.0 percent.

He also stressed the social responsibility of securities firms. Governor Lee noted, “The social contribution performance of the securities sector lags far behind that of banks. I ask that you assess whether your contributions match your increased size and role.” Last year, domestic banks’ expenditures on social contribution activities totaled 2.2 trillion won, whereas domestic securities firms spent a provisional total of 50 billion won.

Governor Lee further asked, “Please provide substantial investor education so investors can clearly recognize the possibility of losses. Only then can a mature investor protection culture take root.”

He also called on securities firms to strengthen their management of capital market volatility. “Margin loans have reached a record high this year, coinciding with a bullish stock market, and have become a major factor in market concentration and increased volatility, especially as they have been excessively concentrated in certain stocks,” he said. “I appreciate the recent self-regulatory agreement, led by the association, to restrict margin loans by stock and strengthen limits relative to equity, and I ask for your continued attention to ensure these measures are followed in practice.” The volume of margin loans, which stood at 15.8 trillion won in 2024, soared to 33.3 trillion won last month.

Governor Lee also emphasized risk management for securities companies. He said, “As we enter a period of rising interest rates, securities firms that rely heavily on short-term funding should pay close attention to liquidity management, including preventing mismatches of funding. A new adjusted liquidity ratio system that better reflects the actual liquidity of securities firms will be implemented next year, so please prepare accordingly.”

Finally, Governor Lee remarked, “Certain behaviors that betray investor trust—such as product designs that do not meet investor expectations, false or exaggerated advertising, and the imposition of hidden costs—persist. The Financial Supervisory Service will focus its supervisory and inspection capacity on thoroughly addressing and fundamentally rectifying practices that undermine investor trust.”

This content was produced with the assistance of AI translation services.