Chairman Kim Byoung Hwan of the Financial Services Commission (FSC) traveled to Tokyo, Japan on his first overseas business trip since taking office in July 2024. On September 3, Chairman Kim had a meeting with the Commissioner of Japan’s Financial Services Agency (FSA), visited Japanese companies that have disclosed their value-up plans in Japan, and held talks with officials from Korean financial companies operating in Japan.

Meeting with FSA Commissioner

Since the financial authorities of Korea and Japan resumed their shuttle meeting for the first time in seven years in December last year at the 7^th bilateral meeting held in Seoul, new leadership has been appointed at both organizations in July this year. Commissioner Ito Hideki of Japan’s Financial Services Agency (FSA) took office on July 5, and Chairman Kim Byoung Hwan of Korea’s Financial Services Commission took office on July 31. On September 3, the new leaders of Korea and Japan’s financial authorities held a meeting at Japan’s FSA to exchange opinions on recent financial market developments and related issues and discuss ways to strengthen mutual cooperation.

First, both leaders shared a common view on the need to strengthen bilateral cooperation to more effectively cope with volatility in global financial markets. Since monetary policies and economic situations in major economies, such as the U.S., E.U., and Japan, are reaching an inflection point, and as there are multiple variables that can have a significant impact on the global economy, such as the U.S presidential elections, both leaders agreed that there may be growing volatility in global financial markets in the future. As it was evident in the global stock market rout experienced in early August caused by fears of a recession in the U.S., both leaders assessed that financial market anxiety can erupt anytime if market participants overreact and if there is too much herd behavior. In order to respond to market volatility in a timely manner, both leaders shared a common understanding that bilateral cooperation between Korea and Japan can be of great assistance, and agreed to continuously have discussions on specific details to seek closer cooperation in the future.

Second, both sides exchanged opinions on major capital market policies sought actively in each respective country, while emphasizing the importance of promoting virtuous cycle of growth and distribution in efficient ways driven by capital markets. Korea has been pursuing capital market reforms to make the economy more dynamic and ensure sustainable growth. Through Corporate Value-up Program, Korea is also making efforts to boost the competitiveness of domestic capital markets and listed companies. Under the policy framework of “Promoting Japan as a Leading Asset Management Center,” Japan has been working to expand investment demand, overhaul asset management businesses, and promote value-up disclosures under the framework of “Action to Implement Management that is Conscious of Cost of Capital and Stock Price.”

Third, with regard to the Korea-Japan Shuttle Meeting, both sides went over the current implementation status for the issues discussed at the previous meeting and plans for holding the 8^th Shuttle Meeting. As it was announced at the previous meeting, Korea Development Bank (KDB) will host KDB NextRound, a venture investment IR event for Korean startups in Tokyo for Japanese investors in November this year. Since last year’s Shuttle Meeting was held in Seoul, the 8^th Shuttle Meeting between Korea and Japan’s financial authorities is expected to be held in Tokyo this year.

FSC Chairman Kim and FSA Commissioner Ito agreed to continuously work to maintain strong financial cooperation between the two countries well beyond the 60^th anniversary of forming diplomatic ties between Korea and Japan next year.

Visit to Japanese companies participating in Japan’s value-up disclosure scheme

FSC Chairman Kim Byoung Hwan visited Japanese companies in various business sectors—Concordia Financial Group (finance), INPEX (energy), and SoftBank (telecommunications)—and held talks with their management teams to gain insights and policy implications for Korea’s Corporate Value-up Program.

Concordia Financial Group and INPEX have been included in the list of case studies of 29 companies, and their initiatives to implement management that is conscious of cost of capital and stock price were published by the Tokyo Stock Exchange (TSE) in February this year as best practice examples. SoftBank is a large-cap company with a market capitalization ranking of about 20^th in Japan, and the company is known for publishing integrated reports annually in effort to pursue shareholder-friendly disclosure of its value-up plans.

While meeting with these companies, Chairman Kim held talks on the factors behind their decisions to respond to TSE’s call for action to implement management that is conscious of cost of capital and stock price and the challenges and difficulties experienced along the way. The companies shared what they experienced throughout the whole process—from the decision to respond to TSE’s call for action to the disclosure of plans to enhance their corporate value.

Since 2018, Concordia Financial Group had been searching for strategies to boost growth by making their capital more efficient, led by its board of directors. At an opportune time in March last year, the TSE made the suggestion to disclose its value-up plans, which enabled the company to disclose its plans quickly. In this regard, company officials said that providing as detailed information as possible to investors and communicating with them was a key to receiving favorable evaluation from the market.

INPEX officials said that the company has selected ROIC (return on invested capital) as a key performance indicator alongside ROE (return on equity) to facilitate comparison of profitability among different business parts. To enhance company valuation in a sustainable way, they said that it is important to find an appropriate balance between growth investment and shareholder returns and communicate that effort with investors in a transparent way.

SoftBank officials said that as a large company with the parent company (SoftBank Group) and its subsidiary (SoftBank) both listed on the exchange, it provides medium-term (3-yr) management plans and actively communicates with investors. The company has tied its TSR (total shareholder return) targets to executive bonuses to ensure their management practices prioritize shareholder values, company officials said.

In this regard, Chairman Kim said that the leading role and exemplary practice shown by companies in diverse business sectors, including large-cap companies, from the early stage of the program implementation helped to boost participation in Japan. Large companies in Korea are similarly expected to play a leading role, and the government will continue to maintain close communication and support companies’ value-up efforts, Chairman Kim added.

Meeting with Korean financial companies operating in Japan

FSC Chairman Kim Byoung Hwan met with officials from local branches of nine Korean financial companies—including six banks, one insurance company, and two financial investment businesses—and held talks on local financial industry trends, operating status of each company, and suggestions for financial authorities.

At the meeting, Chairman Kim highly praised the active efforts shown by these companies in expanding their businesses overseas despite difficult operating conditions presented by dissimilar regulatory and supervisory practices in the local market. In this regard, Chairman Kim said that the FSC will continue to work on strengthening cooperation and maintaining close communication with the Japanese financial authority to bring about improvements in operating conditions for Korean financial companies doing business in Japan.