Meritz Financial Group's 'One Meritz' First Day Stock Surge... Shareholder Return Expectations Rise
by Jang Hyowon
Published 25 Apr.2023 14:49(KST)
Faster Decision-Making in M&A Through Integration
Plan to Return 50% of Net Profit to Shareholders Starting This Year
Meritz Financial Group is showing strength on the 25th, the first trading day as a single listed company after fully incorporating Meritz Fire & Marine Insurance and Meritz Securities as wholly owned subsidiaries. This is interpreted as reflecting expectations that the group will actively enhance shareholder value as ‘One Meritz.’
As of 2:21 PM on the 25th, Meritz Financial Group is trading at 45,850 KRW, up 1.1% from the previous day.
Meritz Financial Group announced on November 21 last year that it would fully incorporate Meritz Fire & Marine Insurance and Meritz Securities as wholly owned subsidiaries. To achieve this, Meritz Financial pursued a comprehensive stock exchange method. Meritz Fire & Marine Insurance has already been delisted, and Meritz Securities is incorporated into Meritz Financial Group starting today.
On the first day of ‘One Meritz,’ Meritz Financial Group unveiled a newly designed homepage. It organizes all information related to management activities, affiliate performance figures, dividends and total dividend amounts, treasury stock purchase and cancellation amounts, and shareholder return rates in a clear manner to facilitate quick understanding and allows users to intuitively grasp key content on mobile devices as well.
Meritz Financial Group is expected to take faster actions in business execution. Meritz affiliates have been collaborating extensively in IB investments and M&A. Since all three companies were listed, they had to go through board meetings and shareholder meetings, which sometimes delayed fundraising. With this integration, faster decision-making is possible, raising expectations that they will seize good investment opportunities.
Additionally, the market expects Meritz Financial Group to actively return value to shareholders. When Meritz Financial Group first announced the integration plan of the three companies, Kim Yong-beom, CEO of Meritz Financial Group and Meritz Fire & Marine Insurance, and Choi Hee-moon, Vice Chairman and CEO of Meritz Securities, explained shareholder value enhancement plans and management strategies directly through a conference call-style investor relations (IR) meeting.
At this event, Meritz Financial Group announced that it would return 50% of net income to shareholders starting this year. The return methods include dividends, treasury stock purchases, and cancellations. This exceeds the recent three-year shareholder return rates of each company: 27.6% for the holding company, 39.7% for Meritz Fire & Marine Insurance, and 39.3% for Meritz Securities. The market estimates that approximately 700 billion KRW will be used to enhance shareholder value after the transition to a single listed company, based on simple calculations.
Kim Yong-beom, CEO of Meritz Financial Group, said, “Meritz Financial Group and its core affiliates, Meritz Fire & Marine Insurance and Meritz Securities, have gained more organic financial flexibility than before through efficient capital allocation based on stable profitability. Moving forward, we will enhance synergies and expertise among each other and expand the financial ecosystem to contribute to market stabilization.”
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