Local banking and financial firms are expected to greatly boost their dividend payments for 2015, helped by a rise in their earnings and a government policy to give more back to shareholders, market watchers said Sunday.

According to the observers, the country's two largest banking groups by assets -- KB Financial Group and Shinhan Financial Group -- have decided to pay out record amounts in dividends, with many other banking and insurance firms also expected to boost their payout ratio.

KB Financial, the No. 1 banking group by assets, has set aside 378.6 billion won ($313.4 million) for dividend payments, a record amount in the group's history that also marks a 25.6 percent spike from 301.3 billion won in the previous year, group officials said.

Along with the increase in sheer amount, the group's payout ratio will also climb to 23.2 percent from 21.5 percent in 2014, while its dividend per share will also rise to 980 won from 780 won over the cited period.

In 2015, KB Financial's net income came to 1.7 trillion won compared with a net 1.4 trillion profit in 2014, the company has said in a regulatory filing.

No. 2 Shinhan Financial has also promised a record amount in returns to shareholders, earmarking 631 billion won for dividend payments.

The group's payout ratio is set to reach 24 percent, the highest rate since the holding company set sail in 2001, with its per share dividend breaching the 1,000-won mark for the first time by reaching 1,200 won from 950 won in 2014, according to group officials.

Other banking groups have not yet announced the exact amount of their dividend payments, but market observers noted they will likely increase their payments on increased earnings.

Woori Bank, the country's third-largest lender, had its net profit jump over 143 percent on-year to 1.06 trillion won last year, while the state-run Industrial Bank of Korea also saw its net income move up to 1.1 trillion won from 1.03 trillion won over the cited period.

In addition, the government has vowed to boost the payout ratio of government-run institutes to 40 percent of total income by 2020.

The government is also moving to encourage private firms to increase their dividend payments, introducing a new tax on corporate cash reserves last year. (Yonhap)