Meritz to return 50% of net profit to shareholders

Meritz Financial Group Inc. became the first South Korean financial holding company to unveil a concrete shareholder return plan, pledging to allocate over half its consolidated net profit for dividends and share buybacks through 2025.

The company disclosed on Thursday that it aims to enhance shareholder returns by prioritizing payouts.

From 2026 onwards, Meritz will compare internal investment returns with shareholder returns to optimize capital allocation and further boost shareholder value.

Meritz evaluates the most effective method to achieve this, considering internal investments, share repurchases, and dividend payouts.

Last year, share buybacks were deemed the most efficient strategy, leading to the retirement of 640 billion won ($464 million) worth of shares.

"If the three rates of return remain similar to the current levels beyond 2026, we will maintain a shareholder return rate of over 50%," a company source said.

To ensure the value enhancement plan is not a one-time event, Meritz Financial will announce updates with each quarterly earnings disclosure.

Write to Hyeong-Gyo Seo at seogyo@hankyung.com