Why increase the dividend payout ratio despite sluggish brokerage earnings

[Korea goyounghun financial newspaper reporter] last year, securities were sluggish performance due to reduced debt and equity valuation decline in trading value. However, the major brokerage firms were found to have increased rather than decreased earnings despite a dividend payout ratio.

According to the financial investment industry, such as the 14th and the Financial Supervisory Service, Korea Investment & Securities, Daishin Securities, year despite eight securities firms such as Daewoo, Mirae Asset income will decline over the previous year and set a dividend at a similar level as in previous years revealed that increased the dividend payout ratio.

Most securities companies increased dividend payout ratio to Korea Investment & Securities whopping almost 380% compared to the previous year to 450 percent. But actual cash dividend as dividend payout was for capital raising in November for Korea Investment & Securities is a piece that is high. 4 trillion won can be seen as a strategic choice to achieve super IB.

Daishin Securities Although the net 96.4 billion won to 30.6 billion won from the line, and the dividend payout ratio is rising. From 27% in 2015 increased by 2 times to 56%. For 19 years Continuous yen Daishin Securities has conducted a cash dividend.

One financial investment brokerage subsidiary Bank Financial Group also rose in large dividend payout ratio of width. Even though one of the financial investment net income is reduced significantly dividend payout rose to 57%. A contrast to the bank holding the securities as Shinhan Investment has reduced the dividend payout ratio close to half due to reduced income.

In the case of NH Investment and Securities, Meritz Investment Bank Securities yen maintained a similar level to the previous year, respectively 57% and 36%. In the case of NH Investment & Securities yen net profit despite increased dividend payout ratio it has slightly decreased by 1.8%. Samsung Securities shares one decided cash dividend of 650 won per share. But also it reduces the net dividend payout Samsung Securities has slightly increased.

For the best investment securities sold but the ongoing yen profit decreased by half dividend it was determined as 18.5 billion won in the same year. This dividend payout ratio has risen.

Experts point out that brokers are not easy days to reduce the dividend and fell to the bottom line.

One industry official explained that "Reducing the dividend gotta interpreted as a signal that the company management should better can adversely affect the share price," said, "In addition, there is also a problem due to the dividend corporate income tax reflux".

If reflux corporate income tax is investing more than 80% of a company's profits, wage increases, do not say a scheme to dividends taxed below 10% of the amount. For less relevant financial institutions and the capital investment is part of the situation to increase wages or lack of geotoe Yen pointed countermeasures to maintain the dividend.

Recently constantly securities in decline for many years, employees have an opinion not easy even increase their wages. Employment partially enlarged due to increased competition and market issues is also difficult.

Also include recent stewardship code, and the issue is also under the spotlight shareholder-friendly policies is an important reason. It is the industry's official message backlash from shareholders also does less formidable when dividends.

But in these high dividend policy is also not a few critical situations Giving fill the pockets of the owner family that with a lot of interest.



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