 |
Citibank Korea. (Photo = Citibank Korea) |
[Alpha Biz= Reporter Kim Sangjin] Citibank Korea to Remit 400 Billion KRW to US Headquarters via Mid-Year Dividend, Sparking Concerns Over National Wealth Drain
Citibank Korea has announced that it will remit 400 billion KRW to its US headquarters through a mid-year dividend, raising concerns over the outflow of national wealth. This marks the bank's first mid-year dividend in six years.
According to reports from the financial sector on the 18th, Citibank Korea's board of directors approved the 400 billion KRW dividend last month. Unlike the annual dividends voted on at the general shareholders' meeting, mid-year dividends can be issued once a year. By the third quarter of this year, Citibank Korea posted a net profit of 268.7 billion KRW, aided by cost reductions following the restructuring of its retail banking operations after exiting from the retail banking business in 2021. Last year's net profit was 277.6 billion KRW, and the bank had paid 138.8 billion KRW in dividends (436 KRW per share).
However, this year, the mid-year dividend alone exceeds the bank's net profit for the first three quarters. The dividend payout ratio (the percentage of net income paid as dividends) has surged to 149%, compared to last year's 50%. In contrast, domestic financial groups' average payout ratio is about 30%.
Regardless of the amount, all of Citibank Korea’s dividends are sent directly to its US headquarters, as its largest shareholder is Citibank Overseas Investment Corporation, a subsidiary fully owned by Citigroup. This has prompted concerns about the outflow of national wealth. Additionally, Citibank Korea's workforce has decreased since its exit from retail banking, with the number of employees dropping by 204, from 1,824 at the end of last year to 1,620 in the second quarter of this year.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
