CashNews.co
Meritz Financial Group has demonstrated a remarkable commitment to enhancing shareholder value through a series of strategic financial maneuvers, resulting in impressive returns for its investors. From 2017 to last year, the company maintained a 100% share cancellation rate by buying back and canceling approximately 1.3 trillion won (approximately $962 million) worth of shares. This aggressive approach to share buybacks and cancellations has significantly boosted the company’s Total Shareholder Return (TSR).
Meritz Financial’s cumulative TSR surged to 44% by the end of last year, with the shareholder return rate reaching an impressive 51.2%. In March, the company further solidified its commitment to shareholders by signing a 500 billion won share buyback trust contract. By the first half of the year, Meritz Financial had already purchased shares worth 258.4 billion won, equivalent to approximately 3,288,000 shares.
As of the end of June, the average annual TSR for the past three years was recorded at 58%, a figure that is three times higher than the average (17%) of domestic holding companies such as KB Financial, Shinhan Financial, and Hana Financial Group. It is also more than twice the average (26%) of domestic non-life insurance companies like Samsung Fire & Marine Insurance, DB Insurance, and Hyundai Marine & Fire Insurance. The cumulative TSR surged to 91% in the first half of this year, up from 44% at the end of last year.
Meritz Financial’s spokesperson commented, “The average annual TSR for the past three years as of the end of June was recorded at 58%. This is three times higher than the average of domestic holding companies and more than twice the average of domestic non-life insurance companies.” The spokesperson added, “The cumulative TSR, which has steadily increased since the implementation of the shareholder return policy last year, surged to 91% in the first half of this year, significantly up from 44% at the end of last year.”
The company’s strategic focus on TSR as the core indicator of its corporate value enhancement plan has paid off handsomely for its shareholders. “Shareholders who invested in Meritz Financial have achieved an average annual return of 58% on their investment principal over the past three years,” the spokesperson noted. To maximize shareholder value, Meritz Financial is devising an optimal capital allocation strategy that compares internal investment returns, share buyback returns, and cash dividend returns.
Looking ahead, Meritz Financial has decided to return 50% of the consolidated net income to shareholders for the three fiscal years from 2023 to 2025. “The company decided and is executing a plan to return 50% of the consolidated net income to shareholders for the three fiscal years from 2023 to 2025, comparing internal investment returns and shareholder returns,” the spokesperson explained. Last year, the shareholder return rate reached 51.2%, and the company is actively pursuing share buybacks and cancellations this year with a target of over 50% shareholder return rate.
In March, Meritz Financial signed a 500 billion won share buyback trust contract and purchased shares worth 258.4 billion won by the first half of the year. These shares are scheduled to be fully canceled upon the termination of the share buyback trust contract in March next year. “From 2017 to last year, the company maintained a 100% share cancellation rate by buying back and canceling approximately 1.3 trillion KRW worth of shares,” the spokesperson reiterated.
Meritz Financial’s impressive TSR performance is a testament to its effective corporate value enhancement plans, which include strategic share buybacks, cancellations, and a robust dividend policy. By focusing on optimal capital allocation and maintaining a high shareholder return rate, the company has set a benchmark in the financial industry, outperforming its peers and delivering substantial returns to its investors.