Capital Group, a large U.S. asset manager, has lifted its stake in Shinhan Financial Group (055550.KS) back above 5%, becoming the group's third-largest shareholder. Analysts read the move as institutional endorsement of Shinhan's "Value-Up 2.0" strategy, which pairs improved profitability with higher shareholder returns.
Capital Research and Management Company (CRMC), an investment advisory arm of Capital Group, held 23,568,346 Shinhan Financial shares as of the 26th of last month, according to a filing with the Financial Supervisory Service's electronic disclosure system, DART, on the 2nd. That equals a 5.02% stake.
CRMC's holding stood below 5% through the 25th of last month, but the firm then bought an additional 115,260 shares, crossing the threshold that requires a large-shareholding report. It increased the stake through on-market share purchases and off-market purchases of depositary receipts, and described the purpose of the holding as simple investment.
Capital Group managed more than $3.6 trillion as of the end of June. It is known as a long-term active investor that focuses on a company's long-term growth, profitability and capital allocation strategy rather than short-term share price moves. The firm previously held more than 5% of Shinhan Financial but dropped off the list of major shareholders after selling part of its stake.
Market watchers are focusing on the possibility that Shinhan's value-up policy and improving earnings at its non-banking affiliates drove the increase. In April, Shinhan Financial unveiled Value-Up 2.0, setting medium- to long-term targets of a return on equity above 10%, a total shareholder return ratio above 50% and a common equity Tier 1 ratio above 13%.
"We believe the investor took a positive view of our efforts to sustainably enhance shareholder value through Value-Up 2.0 and of the improvement in ROE that has come with better earnings at group affiliates, led by the non-banking businesses," a Shinhan Financial official said.
