South Korean insurers and credit card companies that were embroiled in a controversy for paying hefty bonuses to employees on record earnings last year have paid almost 3 trillion won ($2.3 billion) in cash dividends last year.

According to the business reports filed with the Financial Supervisory Service on Thursday, insurance companies paid 2 trillion won in cash dividends last year and credit card companies 763.1 billion won.

Among the non-life insurers, Samsung Fire & Marine Insurance Co. gave out the largest amount of dividends of 586.6 billion won in 2022, followed by KB Insurance Co. 350 billion won, DB Insurance Co. 276.2 billion won, and Hyundai Marine & Fire Insurance Co. 154 billion won.

The dividend payout ratio, or the amount of dividends paid out relative to the net income, was the highest at KB Insurance with 61.59 percent, followed by Samsung Fire & Marine Insurance with 45.8 percent, DB Insurance with 28.1 percent, and Hyundai Marine & Fire Insurance with 26.8 percent.

Among the life insurance firms, Samsung Life Insurance Co. handed out the largest of 538.7 billion in cash dividends, followed by Shinhan Life Insurance Co. (162.2 billion won). Samsung’s dividend payout ratio was 34.0 percent and Shinhan 35 percent.

“The overall strong performance last year led to generous dividend payouts to shareholders,” said an unnamed official from a non-life insurance firm.

Among the credit card companies, Samsung Card Co. paid out the largest of 266.7 billion won in dividends, followed by 256.6 billion won by Shinhan Card Co., 200 billion won by KB Kookmin Card Co., and 40.8 billion won by Woori Card Co.

KB Kookmin Card marked the highest dividend payout ratio of 52.8 percent while Samsung Card 42.9 percent, Shinhan Card 40.01 percent, and Woori Card 20 percent.

Financial authorities, in the meantime, have advised that not only banks but also insurance and credit card firms refrain from paying out excessive dividends and focus on raising more capital to prepare for a financial turmoil.

Lee Bok-hyun, governor of the Financial Supervisory Service, has warned that large dividend payouts inevitably lead to a smaller portion of risk-weighted assets, and that may not enable institutions to offer more loans to borrowers with lower- and mid-tier credit, posing an issue eventually in terms of mid- and long-term growth at the institutions.

By Pulse

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