The total government dividends from state-owned enterprises this year have approached 2.8 trillion won, marking the highest level on record. The improved performance of institutions such as the Industrial Bank, the Korea Development Bank, and Korea Electric Power Corporation has driven this increase, continuing a trend of rising dividends for the fourth consecutive year.
On May 28, the Ministry of Finance and Economy announced that the total government dividends from state-owned enterprises for the fiscal year 2025 have been confirmed at 27.951 trillion won, an increase of 4.954 trillion won from the previous year’s 22.987 trillion won. The average dividend payout ratio also rose to 40.90%, up 1.18 percentage points from the previous year.
A ministry official stated, "The continuous increase in government dividends and payout ratios over the past four years reflects the government's consistent approach to raising dividend ratios in line with the growing trend of shareholder returns in the private sector."
Out of 40 state-owned enterprises, 20 distributed dividends this year. Dividends are calculated based on 'distributable profits,' which are determined after accounting for net income, carried-over losses, and legal reserves. No dividends are issued if there are losses or insufficient distributable profits.
This year, new entrants to the list of dividend-paying institutions included the Korea Housing Finance Corporation, Korea Gas Corporation, Incheon Port Authority, Korea Electric Power Corporation, and KOTRA. Notably, Korea Electric Power Corporation returned to the dividend list after successfully turning a profit, aided by the effects of electricity rate increases and improved performance.
The largest contributor to government dividends was the Industrial Bank, which distributed a total of 8.806 trillion won, accounting for over 30% of the total government dividends. The Korea Export-Import Bank followed with 4.762 trillion won, and the Incheon International Airport Corporation with 3.194 trillion won.
The increase in dividends from the Industrial Bank included approximately 2.5 trillion won from the recovery of policy fund investments. The government agreed to receive these recovery funds in the form of dividends through prior consultations. However, excluding this amount, the actual payout ratio for the Industrial Bank stands at around 36.8%.
The Korea Development Bank saw an increase in its dividends this year after introducing a semi-annual dividend system for the first time. The government noted that some expected profits for next year were reflected in this year’s dividends, resulting in an increase of about 1 trillion won.
Energy public enterprises maintained relatively low payout ratios due to high debt levels and significant investment needs. A ministry official remarked, "Given that Korea Electric Power Corporation's debt ratio reaches around 600%, it is necessary to retain some profits internally to manage financial soundness."
In contrast, LH Corporation, which distributed approximately 1.491 trillion won in dividends last year, was excluded from this year's dividend list due to recording losses amid a sluggish housing market, resulting in no net income.
* This article has been translated by AI.
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