Korean Financial Holding Shares Surge as Employees and CEOs Cash In on Stock Gains

As bank stocks climb sharply amid a broader rally that has pushed the Kospi to the 5,800 level this year, more bank employees are selling company shares. Workers who bought employee stock for loyalty reasons or to claim up to 4 million won in annual income deductions are taking profits as prices hit levels they have not seen since joining their firms. Paper gains have also grown for chief executives who bought shares as part of efforts to show management accountability.

According to the financial industry on the 23rd, Woori Financial Group’s employee-shareholding ratio fell to 7.78% in December from 7.88% in the third quarter of last year.

The ratio is expected to edge down again in the first quarter. Employee shares can be sold after being withdrawn from the employee stock ownership association into an individual brokerage account, and the withdrawn shares are typically sold on the market. The selling is widely attributed to a recent surge in prices as bank stocks have been cited as beneficiaries of the Kospi’s rise to the 5,800 range.

KB Financial Group shares rose to 168,700 won on the day from 82,000 won on Feb. 24 last year. Over the same period, Shinhan Financial Group climbed 116% to 101,800 won from 47,200 won, and Hana Financial Group jumped 107% to 129,100 won from 62,500 won. Woori Financial Group advanced to 40,300 won from 17,420 won.

Many bank employees buy about 300,000 to 400,000 won worth of company shares each month, often for tax-deduction purposes. With prices soaring, sales have increased, contributing to a decline in employee-shareholding ratios at major financial holding firms, including Woori Financial.

“Employee shares are usually intended for long-term holding, and selling at a peak can be treated as income and may mean paying more tax,” a financial industry official said. “Taking that into account, there is movement to sell at an appropriate level.”

CEOs who bought shares to underscore accountability have also seen their paper gains swell. Shinhan Bank CEO Jeong Sang-hyeok holds 15,551 shares of Shinhan Financial. He bought 2,000 shares in January last year at 48,400 won per share, for a gain of 106.8 million won compared with the price at the time of purchase.

KB Financial Chairman Yang Jong-hee bought 5,000 shares in March 2024 at 77,000 won per share. With the stock topping 160,000 won on the day, his paper gain reached 458.5 million won. Hana Financial Chairman Ham Young-joo bought 5,000 shares in December 2024 at 58,862 won, for a gain of 351.19 million won. Woori Financial Chairman Lim Jong-ryong, who bought 10,000 shares in September 2023 at 11,880 won, posted a gain of 284.2 million won.

Financial holding firms expect shares to rise further and plan to step up outreach to overseas investors. Working-level staff at major groups are expected to meet with JPMorgan staff visiting South Korea in early March to present value-up policies and strategies for new businesses such as stablecoins.