Standard Chartered Bank Korea bowed to public criticism and decided to pay out a total of 100 billion won ($88.2 million) in interim dividends, half of the originally planned amount.

The Korean unit of the British banking group, which had been under fire for its planned payments of a high dividend, made the decision at a board meeting on Thursday.

“The dividend amount was determined with consideration to our responsibility to the shareholders to remit a regular dividend flow, but also the local economic circumstances,” Richard Hill, chief executive of the bank, said in a statement.

The bank has been pressed by the Financial Supervisory Service, the nation’s top financial watchdog, to lower the high dividend. FSS officials had said the dividend should be done within a range that won’t harm the bank’s health.

Of the dividend, the lender said it will remit about 50 billion won to the headquarters in the U.K. The lender had originally planned to send 100 billion won to Britain of the planned 200 billion won, about 80 percent of the bank’s 252.8 billion won net profit in the first half of this year.

As public criticism was mounting over the high dividend, officials from FSS and SC Bank Korea had held talks to tide over the issue.

Yonhap News quoted an FSS official as saying that the reduced dividend could be acceptable for the public.

SC Bank Korea’s decision is expected to affect other banks planning to pay “high” dividends to their shareholders.
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The FSS had advised local and foreign banks in Korea to restrain high dividends and strengthen internal reserves in preparation of urgent situations regarding the global financial crisis. 

By Park Min-young (claire@heraldcorp.com)