WF

Good afternoon. This is Han Hong Sung, Head of Investor Relations at Woori Financial Group. Thank you for attending today's earnings call for Woori Financial Group, despite your busy schedules. Joining us today on the call are Group CFO, Kwak Sung Min, Group CDO, Oh Il Jin, Group CRO, Park Jang Keun, and Head of Business Growth Support, Yang Gi Hun. We will begin with the group CFO's presentation, which will be followed by a Q&A session. Please note that the session is being simultaneously interpreted for the benefit of overseas investors. With that, we will now hear from the CFO the earnings result presentation of Woori Financial Group's first half 2026. Good afternoon. This is Kwak Sung Min, Woori Financial Group CFO. Let me go over the group's earnings result for first half 2026. Please refer to page 2 of our earnings results material available on the website.

First, the group's net income. Woori Financial Group's net income for Q2 2026 outperformed market expectations, coming in at KRW 1 trillion 4.6 billion, up 66% QOQ. It has thus regained the quarterly net income of KRW 1 trillion level. This brings the half-year net income YTD to KRW 1 trillion and 609 billion, up 3.7% YOY. Our common equity ROE was 9.0%, excluding one-off items, including the impact of changes in actual assumptions at our insurance subsidiaries. ROE was 10.3%. Our Q2 results demonstrate that the group has the foundation to take its recurring earnings capacity to the next level, potentially generating quarterly earnings of more than KRW 1 trillion. This was driven by our strengthened capital position, which improved by 80 bps year to date, enabling us to focus on asset growth and productive finance, strengthening the core competitiveness of our subsidiaries, enhancing cost efficiency and risk management.

The group posted record high net operating revenue in the first half, while the CIR ratio and credit cost ratio stabilized at lower levels, leading to the group's profitability improvements. During the first half, the benefits of our longstanding efforts to diversify the group's earnings structure began to materialize. Despite a challenging operating environment with the sharp rise in exchange rates and market interest rates, as well as the impact of changes in actuarial assumptions in insurance, the group's non-interest income increased by 20% YOY, driven by stronger capital market performance, becoming the primary driver of earnings growth. Fee income exceeded KRW 700 billion for the first time on a quarterly basis, supported by solid growth in core fee businesses such as wealth management and CIB.

In the first half, the non-bank's contribution to group net income more than tripled YOY from 6.9% to 22.3%, indicating the start of tangible results with the setup of a comprehensive financial group. Looking ahead, we expect our non-bank businesses to become a new growth engine, further strengthening the group's earnings generation capacity. Now, shareholder returns. Today, the BOD approved an additional KRW 150 billion share buyback and cancellation for the second half of the year, a first since the establishment of the holding company. The total amount of share buybacks and cancellations for 2026 will reach KRW 350 billion, representing the largest program in our history and more than twice the KRW 150 billion executed last year. This reflects the firm determination behind cost and shareholder return policy, as well as to minimize shareholder dilution due to the acquisition of full ownership of Dongyang Life Insurance and protect shareholder value.

Woori Financial Group approved the second quarter cash dividend of KRW 221 per share, all non-taxable, further reinforcing our position as a leading dividend-paying financial stock. Just as we have consistently delivered on the commitments we have made, we will continue to faithfully execute our corporate value program and strengthen investor confidence. A more detailed review on the group's financial performance by business segment on page three. First, I will discuss net operating revenue and NIM. For the first half of 2026, the group's net operating revenue increased 6.0% YOY to a record KRW 5 trillion 722.7 billion. This was driven by balanced growth in both interest and non-interest incomes, each reaching an all-time high, demonstrating that the group's stable earnings generation capability has reached a new level. Q2 net operating revenue also increased 7.5% QOQ to KRW 2 trillion and 965 billion.

The group maintained solid growth in interest income in the first half, up 3.2% YOY. This was supported by the full-scale expansion of productive finance, with corporate finance growing at a high 4%, as well as continued optimization in ALM, which lifted the bank's NIM by 7 bps YOY. Second quarter NIM remained at the same level from the previous quarter at 1.51%. Although funding cost pressures increased amid higher market interest rates, we minimized the downward pressure on NIM by expanding our core deposit base and continuing disciplined asset rebalancing. Going forward, as we enter a period of rising interest rates, Woori will continue to broaden its customer base, further expand core deposits through strategic partnerships, and improve margins through profitability focus loan portfolio management. Next, let me discuss the bank's loan book. As of June-end 2026, the bank's total loans grew

1.9% Q2 to KRW 344 trillion. The growth is mainly due to corporate loans growing 2.8% Q2, primarily driven by large corporates and high-quality SMEs, supported by expanded productive finance for advanced strategic industries. To prepare for ongoing domestic and global uncertainties, we will continue rebalancing low margin and negative spread assets. In line with the government's household debt management policy, household loans will continue to be managed within our target range. Meanwhile, in June, the group expanded its commitment to productive and inclusive finance by an additional KRW 10 trillion, increasing the size of future shared growth project to a total of KRW 90 trillion over the next five years. Through the initiative, we will broaden our support beyond advanced strategic industries to include industry leaders, exporters, innovative companies, and startups, thereby strengthening the flow of capital into productive sectors while establishing a more resilient foundation for the group's long-term growth.

Next, let me move on to the group's non-interest income. The group's non-interest income amounted to KRW 1 trillion 63 billion for the first half and KRW 628.9 billion for the second quarter, marking record high results on both a half-year and quarterly basis. Accordingly, the proportion of non-interest income to total net operating revenue increased to 18.6%, supported by greater group synergies and stronger business performance across our subsidiaries. Both the banking business and the non-bank businesses, including insurance, securities, and investment banking, asset management, delivered balanced earnings growth. Offsetting factors that reduced earnings, including trading and valuation losses resulting from the high exchange rate and high interest rates, as well as changes in actuarial assumptions in the insurance business.

In particular, the group's fees and commissions amounted to KRW 1 trillion 278.8 billion, supported by the bank's WM business and growth in the securities IB business on the back of strong capital market conditions, increasing 23.7% YOY. Second quarter fee income amounted to KRW 702 billion, up 22% from the previous quarter, surpassing KRW 700 billion for the first time on a quarterly basis. This also reflects our strategic efforts over the past several years to expand fee-based earnings. Meanwhile, to drive growth in the group's non-bank business so that each subsidiary can strengthen its core competitiveness and take the next step forward in its business, the group completed a KRW 1 trillion capital injection into our securities subsidiary last May. Today, the making of Dongyang Life, a wholly owned subsidiary, has also been approved.

Going forward, leveraging our diversified group portfolio, we will continue to increase the earnings contribution from our non-bank businesses, thereby further improving quality of the group's earnings mix. I will now move on to the group's expenses. Please refer to page 4. I will now move on to the group's SG&A expenses in the first half of 2026. The group's SG&A expenses amounted to KRW 2 trillion 632.8 billion, and the CIR ratio was 42.8%. This year, despite structural cost increases, including the consolidation of the insurance business, the build-out of our securities subsidiary's infrastructure, and the higher education tax rate, we maintained the CIR ratio at the same level as the same period of the previous year through company-wide cost efficiency efforts. Meanwhile, SG&A expenses for the second quarter amounted to KRW 1 trillion 210 billion, down 15% from the previous quarter.

Even excluding one-off voluntary retirement expenses, SG&A expenses declined 2.4% from the previous quarter, continuing on a downward trend. Going forward, while continuing to invest in future growth, including AI transformation and the build-out of our securities subsidiary's infrastructure, we will further enhance productivity in our core operations through the transformation to an AI-driven management system and optimize our workforce and channel operations. Through these cost efficiency efforts, we will do our utmost to achieve our medium to long-term share ratio target of below 40% range. Next, I will cover the group's credit costs. Group credit costs for the first half of 2026 amounted to KRW 966 billion, up slightly year-over-year. However, in the second quarter, credit costs amounted to KRW 439.2 billion, down 16.7% QOQ, continuing on a downward trend.

In addition, excluding large one-off factors in the first half, the group's recurring credit cost ratio was 39 bps and has been managed stably at a level lower than last year. By maintaining this trend, we will achieve our full-year target announced at the beginning of the year of reducing credit costs by 15% and bringing the credit cost ratio to the low 40 bps range. Meanwhile, despite strong loan growth this year through a selective asset origination strategy focused on asset quality, the proportion of prime corporate loans remained at around 85% as of the end of June. In addition, the ratio of loan loss reserves and regulatory reserves to total loans also remained at around 1.5%, providing sufficient loss absorbing capacity against potential credit losses.

However, as the importance of risk management has increased further following the July policy rate hike, we will further strengthen monitoring of vulnerable borrowers and focus on proactive risk management to further strengthen the group's asset quality. Next, let me move on to capital adequacy and shareholder returns. Please refer to page five. As of the end of June 2026, the group's preliminary CET1 ratio stood at 13.71%, up 11 bps from the previous quarter. Despite the continued KRW 1,500 plus exchange rate during the second quarter and continued strong loan growth in support of productive finance, we achieved one of the highest CET1 ratios in the industry, supported by our disciplined capital allocation and risk-weighted asset management capabilities. Based on our strengthened capital position, today, the board of directors of the group approved a second quarter dividend of KRW 220 per share, which is fully non-taxable.

The record date is August 10th, and the payment date is scheduled for August 31st. In addition, for the first time since the establishment of the holding company, we approved an additional KRW 150 billion share buyback and cancellation for the second half of the year, increasing the year's total share buyback to KRW 350 billion across two rounds. As a result, we have fulfilled both commitments we made through our corporate value plan announced last February. First, additionally consider share repurchasing high region in the second half once our CET1 ratio exceeds 13%, and the second, to increase our shares to more than 10% within a short period of time. Going forward, we will also consider making share buyback and cancellation a regular semi-annual program and continue to faithfully execute our corporate value enhancement plan while consistently delivering on our commitments to the market.

Finally, today, the board of directors of Woori Financial Group approved the comprehensive share exchange to make Dongyang Life a wholly owned subsidiary. Once the share exchange process is completed in August, we expect to further accelerate our efforts to strengthen the competitiveness of our insurance business through enhanced operating efficiency, improved capital adequacy, and greater group wide synergies. In the second half, we will also accelerate our efforts to drive and improve sustainable group ROE. In the banking business, we will strengthen our core business drivers, including core deposits, corporate banking, and wealth management, while enhancing cost competitiveness to build a stable earnings base. In the non-bank businesses, we will further strengthen the core competitiveness and market position of each subsidiary, thereby transforming our earnings structure from one centered on the banking business to a more balanced earnings portfolio.

Through these efforts, we will gradually strengthen the group's earnings power to more than KRW 1 trillion per quarter while further strengthening the group's stable and sustainable earnings base. In addition, we will place even greater focus on expanding productive finance and inclusive finance. As you know, Woori Financial Group has a long-standing legacy in corporate banking, which remains one of our core strengths and key source of competitive advantage. As we have already committed to provide an additional KRW 10 trillion through the future co-growth project, including KRW 9.4 trillion for productive finance and KRW 600 billion for inclusive finance, we will execute these funds more swiftly, thereby supporting the real economy, fulfilling the fundamental role of finance by growing together with the market and steadily securing the group's future growth drivers. This concludes Woori Financial Group's 2026 first half earnings presentation. Thank you very much.

Thank you very much. Now we will begin the Q&A. If you wish to ask a question, please press star and one on your phone. In order to cancel, please press star and number two. We will stand by to wait for the question. Yes, the first question from DB Financial Investment, Nami Nook, please go ahead. Thank you. Congratulations on the good performance. I have two questions on the securities. Compared to the other competitors, their sales network, or they are getting a better performance. In retail, the network and the products are differentiated. So in the mid to long term, what are the ways to enhance your brokerage? Secondly, KRW 1 trillion capital increase was done, so it is used in your IB business. What are your future plans for capital usage, and when do you think you will reach KRW 3 trillion? Thank you.

Thank you very much. I would like to address those two questions. Yes, this is Kwak Sung Min, the CFO. The first question about the securities retail wealth management, the plans going forward. We were established in August 2024. As for the network, the retail base is absent. We started out from a zero base. Recently, looking at the large players and the competitors' securities arms, they have suffered large losses. But we have an absolutely smaller size in the market. I did mention the P&L for the securities, but in retail, our income was KRW 11 billion, and it was KRW 15 billion, so KRW 26.6 billion of net revenue. It was KRW 10 billion increase YOY. Of course, compared to the others, we do not have the retail and the sales network that much.

In Gangnam area, Yeouido, and in Gwangju, there will be complex branches, and there will be the fourth one. Continuously, we will open up these complex branches and stores. With this network,

We will work on the number of customers and more on AUM, and there is a need. So through this network, we will increase our sales and retail base with higher number of customers and assets. As for the derivatives, we have not gotten the license yet, and we will be pushing for that license in 2027. As for the pending licenses, we will try to get that. Through collaboration with retail, I hope that we can get synergy, and we will try to get the license as soon as possible. With these elements in REDI, S&T, and other businesses, we will be able to have a more synergy effect coming in. As for retail, there will be continuous expansion. In IT, the retail, so there will be complete environment so that we can enhance more profit in retail.

As for the capital increase, as was mentioned in May, we had an increase of KRW 1 trillion. Basically, for a holding company, the principle is, it has to help in terms of ROE. That's the basic principle. I did mention it in last quarter's earnings call, to be designated as CFIBE, we will do the capital injection. For securities, ROE needs to be improved. So we will move toward that direction, and the group as a whole will lend support, and there will be concentrated effort. So we will nurture the securities business. That will be our priority, and we will also improve the profitability, and we will continue with the capital increase phase by phase. As for getting the additional license, we will take that into consideration and make the due decision for the amount and the timing.

As for the KRW 1 trillion capital increase, it is for IB, S&T, Retail. It has been allocated accordingly. As you're well aware, in retail, the limit for credit sharing has increased to KRW 800 billion, and so there has been capital allocation. In IB, there has been internally capital allocated. So for IB and securities, the profitability improvement is the highest, and we have earned KRW 45 billion in operating revenue, which is increased by KRW 38 billion. So IB is enjoying the biggest and the quickest benefit from the capital increase. Thank you.

Thank you very much. Next, Seo Eun Jin from IN Securities, you have the floor. Please proceed with your question. Thank you for the opportunity to ask the question. I do have a question with regards to the credit side. I know that we have around KRW 250 billion in terms of substandards, and I think that there were some large corporate-related issues. So I would like to understand the impact. So I would like to understand how this was actually reflected in the books. Next year or in the second half, I would like to understand what would be your target CCR. Thank you. Yes, thank you very much. Let me respond to the question.

Yes, with regard to the increase in the NPL of the group, and also with regard to the write back of the provisions, and also the question with regard to the credit cost ratio, CCR, let me respond to that question. So with regard to the increase in NPL, as was mentioned, with regard to the Chung Hong group exposure, regarding workout, and there were a total of 6 companies that have applied for a walkout, and there was KRW 130 billion of exposures, which has led to an increase in NPL. I know that it's similar for other banks, but with regard to the Chung Hong group's exposure, at our group, it's mostly in the form of real estate guarantee, especially for the bank, it's the first lien collateral.

As it is indicated in the IR materials in the second quarter, we have actually provisioned a total of KRW 44 billion. With regard to the increase of NPL, as was mentioned, it has to do with the Chung Hong group's exposure. That was the major reason behind the increase of NPLs with regard to the write-back. It is indicated in the IR information, and in the second quarter, there was not any additional factors with regard to the write-back on the provisioning. Rather, if you refer to the IR presentation materials, you can see that with regard to the Jeungang group, we have actually added to the provisioning. Just add provisions. With regard to this quarter, there was not any write-back related, or reversals of the provisioning.

With regard to the credit cost ratio, as was briefly mentioned in the presentation, in the 2Q, credit cost was a reduction of KRW 88 billion to a total of KRW 439 billion. 48 bps, which is a minus 5 bps QOQ. If we exclude one-off items QOQ, it is actually minus one bps, and it is a total of 39 bps based on a recurring ratio. As you are very well aware, in the future, the economic prospects in the policy rate hike, there are some vulnerable borrowers-related issues that may arise and emerge. As was mentioned, we will be managing our risks stringently in a proactive fashion. Also with regard to productive finance, most of the loans will be focused on that. Through this corporate growth, we want to focus on increasing the loans, mindful of asset quality.

With the increase of loans, increase of credit cost ratio would not be that significant. You can see that most of the loans are focused on productive finance and more of the strategic advanced industries. As was already mentioned, in 2026, we have a set forth a target of being in the low 40 bps, 40% range, 40 bps range. We will continue on to make sure to maintain this within this range with stringent risk management. As was already mentioned, the size of the credit cost for YOY, we are going to reduce this by 15%. In the second half as well, we will be very proactive in that endeavor to meet this target of reducing our credit cost by 15%. That would be a top priority for us on the bottom line.

Once again, we will make sure to achieve this target on credit cost. Thank you.

Thank you. The next question is from Park Ajun, Daishin Securities. Please go ahead. Hello. I have also two questions. First about the margin. Looking at the loan growth, it is focused on corporate and especially the large corporate. The market rates are rising and NIM looks stable. I want to know the reason behind that. The reason why I ask this question is whether it is productive finance or inclusive finance, you seem to be most active. Are there no concerns about the profitability? What do you see as the prospect? The second question is, I was wondering what you have in preparation for digital assets. Thank you. Thank you very much. As for the first question, I understood it to be margin. Could you repeat your second question just to be clear? Sorry. They are very active in alternative exchanges.

Are there any things that you are preparing for alternative asset exchanges? Yes. We will address those two questions. Thank you. Yes. This is the CFO. I would like to talk about NIM. As was mentioned, it was 1.15, and it rose 7 bps. Quarterly, it was the same as 1.5 QOQ. The reasons the market rise 3 bps, and the core deposits have increased, and that effect also had 2 bps. YOY, the NIM has increased, but QOQ was the same. The reason it was steady at 1.51 QOQ was, from Q2, the market rates have risen, and the Bank of Korea has given signs that it will increase policy rates.

Considering all that, especially in May, April, we have funded with longer-term deposits, and we increased those deposits in April and May because assuming that the market rates will rise, the longer deposits should increase, so that when the Bank of Korea increases policy rates, the funding rate could be reduced with such preemptive moves. The longer-term deposits were sourced in April, May. Toward the end of the year, we are going to increase the amount of shorter-term deposits. We have done the ALM optimization. When the interest rates go up, this is going to have a positive effect on our NIM. More longer deposits, and that is going to delay the speed of an increase in the funding cost.

From 3 to 6 months, the shorter-term deposits, we have reduced that by KRW 15 trillion, and this is also going to help us in the long term. Compared to June last year, the variable interest cost was increased by KRW 34 trillion. Assuming that the interest rates will rise, according to the portfolio, we have more of them on floating rate. By proportion, at 15% and 4% each in corporate and household loans. We have more of these in CD rates. When the market rates go up, we will be able to suppress funding rates and CD rate-linked loans take up a lot of share, and this is going to be a plus factor for our loans. In Q3, Q4, and early next year, we have the right structure, and the CD rate-linked loans take up a large share.

The NIM was flat in Q1 and Q2 at 1.51, but when the interest rates rise, this is going to serve as a platform for the NIM to rise. Yes, I am the CDO. As for the alternative exchange, I understand it to be the digital asset exchange, and the financial authorities have the policy of one exchange, one bank, and we are reviewing the regulations. We will be nimble so that we can address this, and we are communicating with the major exchanges and maintain a close network. We are going to have collaboration that is strategic and multifaceted, and we are reviewing expanding business models. We will monitor the situation closely, looking at the regulations, and we will decide on the optimum point to enter. As for Stablecoin, we are expecting the legislation in the second half of the year or early next year.

Before that, we are thinking of forming a consortium. Even before the legislation, through a working group, we are going to work on Stablecoin. By each category of payment settlement, we are going to secure the right technology. In issuance and retail, the wallets development, payments, the POC has already been done. On the retail platforms, one, Stablecoin real-time settlement test has been completed. We are also doing a lot of POCs in many different scenarios. Thank you. I think you were asking about some of the concerns in productive finance and inclusive finance. I want to make it clear that in expanding the productive finance, there may be interest rate competition amongst the competitors, and that is a valid concern.

Woori Financial Group, in implementing productive finance, we are not just going to increase low-interest assets, but looking at the productive finance, the way we approach it is, as I mentioned before, the mortgage loans and the existing assets are now redeploying it and rebalancing it to more advanced industries. We are looking at credit cost, capital, and interest rates. We are looking at different facets. In productive finance, we have guarantee from the policy institutions. Losses and capital burden can be lowered. It is not simply expanding the size of low-interest rate assets. We are converting the existing assets to the advanced industries. It does not cause that much of a concern. Ultimately, productive finance is in the nature of corporate lending. We have the know-how of corporate lending.

We have underwriting or acquisition financing, and it can produce synergy with the other businesses. We can secure profitability in many regards. We believe that we have the know-how of managing profitability in a comprehensive manner in the long term. Credit cost reduction, non-interest income expansion, portfolio rebalancing. In those regards, I think productive finance can work in that regard. By the same token, inclusive finance may incur cost in the short term, but in the longer term, it will contribute to reducing the credit cost. At a very optimal level, we will pursue with inclusive finance as well. Thank you.

The next question would be by Kim Doha from Hana Securities. Please go ahead. Thank you very much for this opportunity. I would like to ask about total shareholder returns. With, by exceeding 13%, I know that you now have the platform of meeting your target to 50%, but I know that 50% would not be met this year. But I do know that there are questions with regard to this. Is it a net 50% starting from this year? I do know that there is such understanding. I do know that it is going to be a gradual type of slope moving on to 50, but I would like to understand what would be the trajectory, what would be the timeline as to reaching that target. If you would actually clarify that communication, I think that you can lift any misunderstanding.

Can you give us some more information and indication on how that would be done? Yes, thank you very much for that question. Let us respond to the question. Please bear with us for just a moment. Yes, with regard to TSR, total shareholder return, I believe that that was the question, so let me respond in that context. As was mentioned, this year, our quarterly dividend, based on our policy of equal dividends, it will be KRW 221 for the first quarter and KRW 221 for the second quarter, so it was an equal distribution of the dividends. With regard to the cash dividends, last year, we have indicated the total dividend at DPS would be increased to 10% plus, and we are going to meet this commitment this year as well.

With regard to the cash dividends, I think that there is some anticipation as to how much that would be. Share buyback early this year, we have engaged in KRW 200 billion of that buyback, and as was mentioned in the second half, there will be a KRW 150 billion additional share buyback, which would be a total KRW 350 billion. The context behind the share buyback, as was mentioned, of course, there are a number of factors that came into play. But we want to increase the share buyback based on our value up plan. This means that as quickly as possible, we are going to increase the share buyback cancellation to 10% plus as quickly as possible. As was mentioned, this year, our buyback cancellation of shares of 10%.

I can say that with KRW 350 billion, with an added KRW 150 billion, we believe that we will be in excess of 10% with this additional KRW 150 billion, bringing this to KRW 350 billion in total. With that in mind, the TSR, last year, it was 31.8%, the share buyback was 4.8%, the total TSR was 36.6%. This 36.6%, if we take into consideration the non-taxable dividend, it is actually a TSR basically of close to 40%. This was the indication that we did mention last time around. This year, the TSR of 50%, whether we are going to meet that, the face value of 50%, we think that we will have to go into the fourth quarter to take into consideration our net income as well as our trend of CET1.

Because if you look at the CET1 ratio, of course, we are putting in our best efforts to improve and to stabilize the number. However, as mentioned, we have high exchange rates and there are changes and fluctuations in the stock market and the Middle East conflict leading to inflationary pressures. There are many external risk factors. The CET1, as to what that would be in the year-end, is something that we would have to observe. Then we will be setting forth the cash dividends. What I can say for sure is that this year, you can see that we are the only one with a non-taxable dividend amongst our peer. Based on the non-taxable dividend context, we can say that at a minimum, as you have mentioned, the actual TSR, we think will be in excess of 50%.

That is our current expectation at this time. Of course, we cannot say for sure or guarantee the number. However, the quarterly dividends, as mentioned, will be equally distributed and our share buyback cancellation, the targets that we have already mentioned and what was executed. Based on a non-taxable dividend context,

we believe that our target of a minimum of 50% will probably be satisfied. That is a very cautious, let us say, outlook of what we have, or anticipation. We believe that in October, when we come with the third quarter earnings, we think that we will be able to provide you with better visibility on the number. When that time comes, if we can provide you with a clearer anticipation, that will be the point where we will be providing a more clear communication with the market. Thank you. Yes, from HSBC, Won Saeyong, please go ahead. Thank you for giving me the opportunity to ask two questions. First, I have a question about NIM. It is connected to the earlier question. In your answer, you talked about how strategically in the second half, you are preemptively being ready for the higher rates in the second half.

Traditionally, Woori Bank had a higher sensitivity to NIM. When the policy rates increase in the second half, what do you think is your expectation for your NIM in the second half? The second question is about SG&A. ERP was recognized in Q1. In our future anticipation, the seasonal Q4 ERP will go away, and it will be recognized in Q1. Should that be our future understanding? I hope I can hear your opinion on this. Thank you. Thank you for the two questions. The questions were about NIM and SG&A. Thank you. Yes. This is the CFO. As to the NIM question, we did talk about the status. You are asking a general question about when the market rates rise by 20 bps, how much will it go up in our NIM? What are the simulation results?

According to our internal simulations, when the 25 bps of market rates, KRW 160 billion of interest income, 4 bps arise in NIM. At the IR event, we talked about KRW 140 billion and 3 BP increase for 25 bps in higher interest rates. The CD rate loans are higher for Woori Bank, and the CD loans are increasing. When the market rates go up, that interest income and NIM slightly goes up according to our simulation results. That is the benefit of Woori Bank. Moving on to the second question about the timing of ERP. Yes. As you pointed out, for the last 2 years, in 2025, it was in January, and this year also, the ERP was in January. Going forward, we could have more ERP.

For how many years more, how we can continue, there are many variables, because the government may change the policy of the retirement age. There could be some change at the government level, and we are in the process of reducing the number of stores, and there is downsizing in our headcount. We have to think about the store closure that will determine the size of ERP. As for the timing, we believe that if there is future ERP, it will probably take place in Q1. We are not going to suddenly change that to December as of now. As for the size of the early retirement, in the second half of this year, we will be establishing the mid to long-term. According to the mid to long-term vision and plan, the number of stores and headcounts is going to be important.

Depending on that plan, we will devise how much and when and how often we will go ahead with the early retirements. This may be more flexible, but let's say next year there's another round of early retirements, then it is likely that it will be in January. For early retirement from 2028 and onward, it will be under the mid to long-term plan, and it is up to further decision. As for the timing in the shorter term,

it will not change probably, but in the longer term, due to changes in the retirement age and changes in our store plan and branch plan, it may change. We will share with you at the earliest moment possible to the range that is available. Thank you. Thank you. We have one last person in the queue. Kim Ji-hyun from Daol Investment & Securities, please proceed with your question. Thank you for this opportunity. I have 2 questions. First, we talked about productive finance, which has to do with increasing the supplies of corporate loans. If that is the case, I think that we will have to manage the RWA. Starting from last quarter, our CET1 has been brought up to 13%.

With increase in productive finance and CET1 13%, defending that 13% in terms of a balance, what is the RORWA target that the group has, if any? The second question is, I've known that Dongyang Life will be a wholly owned subsidiary based on your disclosure. We have acquired this life insurance, and I would like to understand what will be the role. Would it be WM or the bancassurance business, or would it be in the IB side to actually engage in the role of an LP? I would like to understand what kind of roles would you want your life insurance arm to play in the future? Yes, thank you very much for the question. There was a question on productive finance and a question on Dongyang Life. Please bear with us as we prepare to answer that question. Yes.

On productive finance and the process of expanding productive finance with the impact on CET1 and RWA, is, I think, the gist of your question. If I may respond, as I did mention, productive finance, I want to say, is not about increasing the loans of a particular category. It's about the existing loans switching to productive finance. It's asset rebalancing, basically. I would like to once again make clear. What happens is, in the case of semiconductors, AI, and defense, aerospace, these advanced strategic industries, we have large corporates in these sectors who will be our customers, and already they are our existing corporate customers. It's that the loan, the direction, would be in the form of productive finance. I want to mention that with productive finance, it doesn't mean that we will be adding on RWA in our loan portfolio.

It doesn't mean that we need RWA, and there will be an increase of RWA. But of course, in investment and in the case of venture capital securities and in supply of these securities, of course, that can have an impact on RWA. However, as you know, our current securities business, most of the RWA is actually being consumed here at the IB arm, and some of that is actually being done through the productive finance scheme. If we take all of this into consideration, banks, securities, and investment banking, already RWA has been well allocated amongst these businesses. One key area of usage, as was already mentioned in the press, is that the government has been introducing rationalization of policies and legislation, especially when it comes to the adjustment of risk weighting.

There I know is active review on this, and some has already been reflected in the policies, and there are more to come in the future. Of course, the supply capacity coming from changes and amendments to legislation, we think will help us lower the impact on the CET1. We, of course, will continue on in the short term, make sure that it is maintained at 13%, 13.2% levels. But if we utilize this actively in productive finance, we think that in the long term, there will be no issues in making sure that it's within the 13% mid to higher range. Yes, I'm Yang Gi Hun in the business development department. On the insurance arm. Would it be bancassurance or an IB role that Dongyang will be playing?

So on the group level, utilizing bancassurance and contributing to the IB capabilities, we think can be a synergy that we can reap. But basically, it is important to enhance the profitability of the life insurance business, the core business, so that it contributes to group net income. So that would be the top priority of its role that it will have to play going forward. Last July, after it was integrated into the insurance business, we have engaged in an internal review, due diligence, and we have identified some tasks, and we are actually engaging in the improvements. So basically, it is on the K-ICS. It is about making sure that we do have a robust capital adequacy, the K-ICS. In addition to that, it is about putting in place the right channels, appropriate channels, and exclusive channels in place.

Based on these improvements, starting from next year, we are going to enhance sales, enhance the profitability of the business, and that is the roadmap that we have for the life insurance arm. Yes. Thank you. I believe that there are no more questions. With that, we would like to conclude the Q&A session. Thank you very much for joining us at this earnings call. Thank you very much for your participation.

Good afternoon. I am Han Hong Sung, the Head of IR at Woori Financial Group. Let me first begin by thanking everyone for taking time to participate on this earnings call for the Woori Financial Group. On today's call, we have the Group CFO, Kwak Seong-Min; the Group CTO, Oak Il-Jin; and the Group CRO, Park Jang-Geun. We will first start with the Group CFO, Kwak Seong-Min's presentation on the earnings performance and then also present the corporate value enhancement plan, after which we will have a Q&A session. Please note that the call is being conducted with simultaneous interpretation for our overseas investors. Now let us start our presentation on the earnings for the full year of 2025.

Good afternoon. This is Kwak Seong-Min, the CFO of Woori Financial Group. Let me go over the 2025 full year performance. Please turn to Page 2 of the material, which is available on our website. The group's 2025 net income was KRW 3,141.3 billion, representing a Y-o-Y increase of 1.8%. The ROE was similar to last year at 9.1%. Amid uncertainties in the financial market regarding interest rates and FX rates and concern about a slowdown, balanced top line growth and the insurance acquisition enabled the group to achieve a high -- record a -- record high net operating revenue and stable profits. In particular, we set sizable reserves for future loss factors, including payoff projects with completion guarantee of trust company and adjust uncertainties such as fully provisioning against LTV-related fines, further solidifying the group fundamentals. In addition, we completed the insurance acquisition without any negative impact on our capital ratios and established a growth foundation for the securities business by acquiring the final license and launching MTS Group, completing the portfolio as a comprehensive financial group. Using this, we are starting to generate group synergies such as investment banking joint underwriting, open integrated wealth management branches and expanding bancassurance operations. Another noteworthy achievement of 2025 is the significant improvement in our capital ratios. As of 2025 end, the tentative group CET1 ratio is 12.9%, up 77 basis points versus 2024 and exceeding the 2025 target of 12.5%. Across higher macro volatility, the insurance acquisition and the higher year-end dividends, the group will still be able to improve its capital ratio through asset rebalancing to stabilize our financial structure, and we are able to show our strong capital management capabilities to the market. Based on this, the BOD today has decided on year-end dividends of KRW 760 and share buybacks and cancellations of KRW 200 billion. Next, let me provide more detail about specific areas. Please turn to Page 3 of the material. First, let me go over net operating revenue and NIM. The 2025 net operating revenue was 5% year-over-year at KRW 10,957.4 billion. Due to stable profit generation from more diversified revenue sources and the inclusion of the insurance business, we posted a record high performance. Interest income for the year was KRW 9,030.8 billion, and top line growth was moderate, but NIM improved quarter-over-quarter throughout the year, which led to better asset quality and growth. On noninterest income, we recorded a record level of fee income and balanced growth across securities, FX trading and insurance income, which led to a jump of 24% year-over-year at KRW 1,926.6 billion. In addition, Woori Bank's 2025 NIM was 1.46% and the group NIM, including the credit card business, was 1.73%, each representing an increase of 2 and 3 basis points, respectively. Though there were 2 base cut rates during the year, NIM grew on the back of asset origination focused on profitability and asset quality and funding cost efficiencies. The recent movement in the equity market has led to money movements and market rates are rising, which is creating a more challenging funding environment. But the group will continue to expand its core deposit base, rebalance its portfolio to focus on profitable, high-quality assets and actively manage ALM to secure stable margins in the future. Next, let me go over the loan book. As of 2025 end, the bank's loans totaled KRW 334 trillion, flat year-over-year and around 1% higher quarter-over-quarter. In terms of corporate loans, they were slightly declined versus 2024 end at KRW 180 trillion. Loan demand from large corporates was strong throughout the year, but the decrease came from the efforts to decrease SME sector business exposures and actively rebalancing assets to focus on new growth and high-quality companies. On the retail side, the portfolio grew around 0.5% quarter-over-quarter or 4% year-over-year to KRW 150 trillion, mainly driven by real demand such as policy mortgages. Last year, against an uncertain business environment, including a weak one, the group was able to achieve profitable growth via prudent RWA management with a focus on capital adequacy. This year, as discussed in our future core growth project planned last September, we will leverage the group's corporate finance competitiveness to increase financial support for more productive areas of the economy. In addition, for retail loans, fully reflecting the government's policy stance, we will focus on the real demand to manage our assets in a stable manner. Next, let me talk about the group's noninterest income area. In 2025, noninterest income was KRW 1,926.6 billion, a record high level and a large increase of 24% year-over-year. In particular, core fee income showed balanced growth across bank and nonbank businesses, totaling more than KRW 500 billion each quarter. In addition, against market -- increased market volatility in interest rates and FX rates, the insurance income contribution from the comprehensive financial group portfolio provided more stability to our noninterest income profile. Leveraging this portfolio, we will strengthen the core competitiveness of our nonbank subsidiaries, such as our securities and insurance business and generate stronger synergies across businesses in areas like wealth management, investment banking and also asset management to gradually expand our noninterest income contribution. Next, let me go over expenses and costs. Please turn to Page 4 of the presentation. So to discuss SG&A, in 2025, SG&A totaled KRW 5,180.5 billion. When excluding the ERP and the insurance business, it grew 10.8% year-over-year, representing a cost/income ratio of 45.7%. During the year, the group spent to strengthen its business portfolio by building out the securities infrastructure and acquiring the insurance business. In addition, there were other upfront costs such as ordinary wage labor costs. We believe these investments for portfolio expansion were essential for sustainable future growth, and we will look at the cost increase from ordinary wage as a one-off expense, which we will try to minimize the impact by increasing future productivity. In addition, going forward, we will continue to engage in general cost-saving efforts like leveraging AI-based operation efficiencies to lower cost and achieve our mid- to long-term CI ratio target of below 40%. Next, let me move on to credit cost and asset quality. In 2025, the credit cost was KRW 2,086.2 billion, and the credit cost ratio was 0.53%. Although the base rate was cut place, market rates have remained high and any concern about a slower economy continues. The group recognized around KRW 430 billion in one-off credit cost, including preemptive provisioning related to completion guarantee of trust company projects and strengthened its loss absorption capabilities. So when excluding these one-off factors, the group's credit cost ratio was 0.42%. For the past 2 to 3 years, we have preemptively managed weak assets such as real estate project finance and completed an asset cleanup of the nonbank side, including the previous merchant banking business, savings bank and asset trust. Thus, we expect any additional costs to be limited. And this year, we are targeting a credit cost that is 20% or around KRW 420 billion lower on a year-over-year basis. In addition, for Woori Bank, the corporate prime asset ratio stands at 84.1%. It is increasing loans to new growth sector manufacturing companies and continues to rebalance assets with a focus on asset quality. Quality indicators are recently improved, but since uncertainties still persist, we will focus more on asset quality management based on preemptive buffers created last year to maintain the credit cost ratio within the 40 basis point range. Next, let me go over capital adequacy and shareholder return. Please turn to Page 5. The 2025 year-end tentative group CET1 ratio is 12.9%. When we launched in 2019, the group started with a CET1 ratio of 8.4%, and it has improved it each and every year. In 2025, even though we had a large M&A, i.e., the insurance acquisition, solid profit growth and asset rebalancing, a reduction in FX-sensitive assets and RoRWA linked KPI systems, we -- this all resulted in a significant reduction of 80 basis points year-over-year. Thus, we have been able to achieve our promise of reaching a CET1 ratio of 12.5% and prove our commitment to enhance our corporate value. At the BOD today, in light of the 2025 financial performance and our shareholder return policy, the Board decided on a year-end dividend of KRW 760 per share and a KRW 200 billion share buyback and cancellation. The full year total dividend per share increased 13.3% year-over-year to KRW 1,361, which meets the qualifications of a high dividend company. In particular, the year-end dividend will also be in the form of a nontaxable dividend, the first of its kind from a bank-led financial holding company. The KRW 200 billion share buyback and cancellation also increases a 33.3% increase year-over-year and the group's total TSR ratio, including the nontaxable dividends will stand at 39.8%. Other details of our shareholder return will be discussed when we present our 2026 corporate value enhancement plan in more detail. Next, I will go over the productive finance strategies of the future co-growth project announced in September. For the next 5 years, we plan to provide support of about KRW 73 trillion, excluding inclusive finance of KRW 7 trillion. KRW 17 trillion will be allocated to investments, including the National Growth Fund, KRW 56 trillion will be supplied as loans to advanced strategic industries such as AI, semiconductors and defense. To secure growth momentum, we are operating the Advanced Strategic Industry Financial Committee as a task force. And recently, with Hanwha Group, we signed a financial support agreement for building an advanced strategic industry ecosystem, which shows that we are already delivering meaningful results. We are also leveraging our competitiveness in corporate finance and network to preempt high-quality clients and efficiently expand funding support. To this end, with the financial authorities capital regulation rationalization policy and by promoting the group's internal efforts such as asset rebalancing, we plan to secure sufficient capital headroom. Also, we will establish an AI-based risk management system that encompasses the entire process from loan review to post-loan management to build a strong growth foundation without undermining capital ratios and asset quality. That was the end of the 2025 annual earnings presentation. We will now move on to the next section.

Today, Woori Financial Group disclosed the 2026 corporate value enhancement plan on KRX. Kwak Seong-Min, CFO, will continue to go over the main elements of the 2026 corporate value enhancement plan.

Today, we announced the corporate value enhancement plan to review the progress made in 2025 and share with the market our new strategies for 2026. The value enhancement plan has incorporated feedback from the market and shareholders. And after thorough discussion, it has been reported to the Board of Directors to be announced today. We especially thought long and hard about how to effectively use the significantly improved capital ratios as basis for growth and shareholder return. So let me go through the material on our corporate value enhancement program, which has also been distributed today through the disclosure. I will first go over the financial indicators for 2025. Please refer to Page 4. ROE, thanks to balanced top line growth and the acquisition of the insurance company was maintained at above 9%. However, as the cleanup at nonbank subsidiaries caused ROE to slightly decline. The CET1 ratio despite the acquisition of insurance, LTV penalties and higher shareholder return is expected to annually improve by 77 bps to 12.9% to comfortably exceed the 2025 target of 12.5%. Annual DPS for this year should increase by 13.3% Y-o-Y to KRW 1,361, which is similar to high dividend company levels. Of this amount, the year-end dividend of KRW 760 is nontaxable. When considered, dividend payout reaches 35%, which is top notch in the industry. The size of share buyback and cancellation have also increased by 9.7% since 2024 to KRW 150 billion. The 2025 TSR of Woori Financial Group when considering nontaxable dividends reaches 39.8%. Page 5 is on nonfinancial indicators. In 2024, we launched the securities companies. And in 2025, we successfully incorporated the insurance company, thereby completing the group business portfolio. Synergy is the fundamental reason why we exist as a financial group. Based on the completed portfolio, wealth management, CIB, capital markets and other key areas will be the focus as we concentrate our efforts to create synergies. Meanwhile, for financial consumer protection, we are the first financial group in Korea to appoint a dedicated Chief Consumer Officer to take the lead in delivering social value. Also advancing the CEO succession program and establishing a new decision-making support process for the Board of Directors to protect shareholder interest are some examples of our efforts to improve corporate governance, which is the key focus in today's capital markets. I'll now move on to the 2026 corporate value enhancement plan on Page 6. In 2026, we plan to achieve a CET1 ratio of 13% ahead of schedule and then maintain it stably at around 13.2% or higher. While continuing the RoRWA-based asset rebalancing efforts, quarterly flexible RWA management and selective resource allocation across sectors and businesses, these are some sophisticated and strategic efforts we are making to manage the CET1 ratio. In addition, we will be disposing idle real estate held by the bank and insurance company to reduce RWA. We will also be deploying diverse methods to efficiently manage and use real estate from a financial perspective to enhance capital ratios. Regarding the pioneering future co-growth project, assuming approximately KRW 80 trillion of productive and inclusive financial support across 5 years, we expect about 40 bps annual impact on our capital ratios. We believe this impact is fully manageable by strengthening the RWA management process, quality enhancement of investment and loan portfolios and utilizing the lending capacity secured from the rationalization of capital regulations. By executing the future co-growth project in a balanced manner within the scope of rigorous capital management, we will work to achieve harmony between capital stability and mid-long-term growth. I will move on to Page 7 on the group's sustainable ROE enhancement strategy. As repeatedly mentioned, for this year, based on the group's complete portfolio, we will focus on cementing the competitiveness of each subsidiary within their respective sectors. And the 3 pillars: Bank, securities and insurance, will start to generate synergy in earnest, which should boost nonbank profit contribution to about 20%. With the continuous capital injection plan, the securities firm will elevate its position in the industry. For insurance, given the business environment, we will prioritize financial stability and focus on laying the foundation for mid- long-term profit. The asset management arm will launch a productive finance-related fund and with the transfer of LDI insurance funds should realize economies of scale and climb the industry rankings. Also on top of traditional methods such as cross-selling and client referral, we are planning to implement diverse synergy strategies such as CIB joint underwriting, wealth management integrated centers and strengthening LDI. In addition, by transforming into productive finance centered around advanced strategic industries, we aim to secure growth momentum. We will move beyond the traditional interest income-driven profit structure and invest in innovative companies to share its profits. Also, we will move the pillar of financial support from household and real estate to corporate finance in order to contribute to the recovery of dynamism in the Korean economy. Also with large-scale transformation into an AI-based management system, corporate loans, wealth management, customer consultations, internal control and other key areas will experience elevated productivity, thereby structurally improving ROE and achieving quality growth at the same time. Lastly, I'll go over the shareholder return policy on Page 8. Traditionally, Woori Financial Group has shown a high dividend payout and a competitive dividend yield, making us one of the leading financial dividend stocks. We will solidify our competitiveness as a dividend stock while diversifying shareholder return methods to lead the expansion of the investor base in the Korea's capital market. First, we will introduce nontaxable dividends from year-end 2025. The related resources as of year-end 2025 is around KRW 6.3 trillion, which we expect to use across 5 years. The nontaxable dividends will boost dividend payout by around 6 percentage points. For retail individual shareholders, the real impact will be an 18.2% increase of dividend income. In both 2024 and 2025, dividend payout was at least 25% and total dividend payment increased by more than 10%. As such, the company effectively satisfies high dividend stock requirements pursuant to the act and restriction on special cases concerning taxation. We will continue to increase EPS every year by at least 10%. The share buyback and cancellation policy has been gradually expanding since its first introduction in 2023. However, it was still about mid-4% of profits. We fully understand that the impact of treasury stock policy is maximized when the PBR is below 1x. Therefore, we will increase the buyback and cancellation portion to about 10% in a speedy manner. Today, we announced share buyback and cancellation of KRW 200 billion, which is a 33.3% increase from the previous year. If we expect the CET1 ratio to exceed 13% this year, we are planning to implement additional buyback and cancellation in the second half. In the future, if the CET1 is maintained stably at over 13.2%, we will review exercising a balanced shareholder buyback and cancellation program twice a year once each half. To ensure that we remain a flagship financial dividend stock, we will stay one step ahead of competitors and implement diverse measures to strengthen shareholder return in a sincere manner. Lastly, in 2025, we acquired an insurance company to complete our nonbank portfolio to become a comprehensive financial group. Company-wide efforts, including all of our employees have led to the highest improvement of the CET1 ratio in the industry to reach almost 13%. Thanks to these achievements, we have received strong interest from investors from home and abroad and have been positively recognized by the market. Our share prices outperformed the KOSPI and market cap has more than doubled since early 2025. In 2026, Woori Financial Group will move beyond the period of management and maintenance to take a leap forward to enter a period of great transformation. While combining core competitiveness and group synergy to advance as a complete comprehensive financial group, we will leverage our key strength, which is corporate finance to deliver the great transformation towards productive finance. In addition, we will continue to communicate with the market and carry on differentiated efforts as a leading financial dividend stock. This will conclude the earnings presentation of Woori Financial Group for 2025. Thank you.

Yes. Thank you very much. Now we will start the Q&A session. [Operator Instructions]. So today, the first question will come from Hanwha Investment Securities, Kim Do Ha.

So for 2026, for this year in terms of your margin and growth in terms of your profits, if you could provide some guidance on that and in terms of the overall direction and why you believe that this would be possible, that would be appreciated. And in addition, for the dividend, I do believe it's larger than market expectations. And I do think that the competitive outlook is also good. However, I don't think I can fully understand your dividend policy. So going forward, with regards to your corporate value up plan. If you look at Page 8 of the presentation, right now for 2026, is the target to increase your DPS by 10%. If that is so, then in terms of your quarterly dividend for each quarter and also in terms of the year-end dividend, what would be the breakdown? Would it be similar to what you have done to date? Or do you actually believe that there will be any changes? If you could explain that in more detail, that would be appreciated also.

Yes. Thank you for your question. And if you give us a minute, then we will try to prepare your answer.

Yes, this is Kwak Seong-Min, the CFO, and maybe I can address your question. So if we look at 2025, as mentioned before, in terms of our CET1 ratio, there was a significant improvement. And as a result of that, we did have a stance to try to have more moderate growth. In addition to that, according to the overall government household debt policy, there was a lower household growth that we also see. But on the Korean won side, there was only a 0.2% growth in that area. In 2026, on the Korean won loans, in terms of the risk-weighted assets, we want to have it at around 0.5%. So that would be the business plan for this year. In addition, if we look at the nominal GDP growth rate and then also take into consideration the factor of the inclusive financing that we will have, we do think that there will be around 5% growth. And even in 2024 there was around 3% in terms of the plans that we had for the year. But on the corporate side, because there was asset rebalancing and other effects, in terms of the corporate loan growth as a whole, it was a bit more sluggish and retail was a bit more sluggish. So as a result of that, in 2026 as a whole, we want to secure growth potential. So on a Y-o-Y basis, we want to have around 5% growth in total for our assets. If we look at our margins, I think that the stance would be is that for 4 quarters consecutively, we will actually be able to see a NIM increase. And for the full year, it was around 2 basis points. So on the margin side, we do think that we have defended ourselves very adequately. And at the Research Institute side, if you look at the forecast that they have set out for this year, we do actually think that the BOK will cut rates at least this year. So that was one of the assumptions. And also in 2026, we think that our margins will, on a Y-o-Y basis, be slightly weaker in terms of the business plan assumptions. However, then thereafter, if you look at the recent side, market rates are being maintained at a high level. The BOK also might cut rates in the second half rather than the first half. So it's going to be pushed back in terms of the timing. And there's also, I think, that conflicting views about rate cut possibilities going forward. So if market rates were not to fall, then we do believe that on a Y-o-Y basis, that NIM will be maintained at, at least this year's level. And in terms of our profitability and asset rebalancing that we're taking, also increasing our core deposits, if this all comes into play, then we do think that there is a possibility that there could be a slight upside to what we're planning and seeing today. In terms of our noninterest income, this is an area that we were very focused on. There was a lot of growth that we had achieved. And we do think that this year, the growth will be similar so that on the noninterest income side, we think that we will be able to see around 20% growth. The insurance company being acquired also. On the security side, we have a final license, and we started business in March of 2025. So we do think that we will actually have a higher contribution coming from the nonbank side. So going forward, in 2026, we think that we can actually see an increase at around 18% on the noninterest income side also. On the SG&A side, in 2025, this was an area in which I do think that we left a bit. However, SG&A, as mentioned before, is also reflecting the insurance acquisition and also the securities firm, we did beef up the IT investments and also increase the headcount there. So on the nonbanking side, there was some concentration of cost increase factors that did take into play. So for this year, again, this is another factor that we will have to take in consideration. So we do think a dramatic decrease on a Y-o-Y basis will not be possible. However, if we look at the other areas outside of these business areas, we are going to be more prudent in terms of management, whether it be the number of branches, the headcount and also other SG&A-related items. I do think that this year, again, not only for the 2026 business plan, but also according to our mid- to long-term plan. In formulating those plans, we will take a fundamental rereview. So in terms of our mid- to long-term target of reaching a CI ratio of 40%, we will try to look at initiatives to enable us to achieve that and actually execute that in 2026 so that at least in terms of the SG&A side that there could be a decrease on a Y-o-Y basis. In terms of our credit cost in 2026, in actuality for 2026, the target would be to maintain a normalized CCR of around 40%. And therefore, that would mean that around -- we have decreased the overall credit cost by around KRW 420 billion or around 20%. So this is the business cost that we will execute and also maintain our CI ratio at 40%. And in terms of the outlook, maybe that could be the overall answer to the question. And then I think that you talked about our capital adequacy ratio and capital policy. In '24 and '25, again, in terms of the total dividends, it did increase by a total of 10% year-over-year in terms of the total amount. And so for this year, if you look at the high-growth qualifications that the actual government has laid out, we would be qualified. However, because our dividends are nontaxable, there are more benefits that we give to our shareholders. But with regards to the DPS target, we do want to have 10% targets going forward. So this is something that we will apply for 2026 and also continuously target going forward. However, that have been said, in terms of the 10% DPS in order to reach that level, if we do a simulation about how we can achieve that, on the net income side, if we increase it by 10%, that itself would enable us to reach a 10% DPS target. So therefore, I think that for the target of having a DPS of 10%, it's not going to be a difficult target to achieve. And therefore, that's why we have set the target at that level. And in addition to that, if we look at our dividend policy, I think that when we talked about this before, we did say that in terms of the quarterly dividend, we would equally distribute it across the first, second, third quarter. And then for the year-end, we would look at our capital ratio and then set the year-end dividend. That's what we did this year. And then for 2026, I think that, that approach will remain the same. As of now, that would be our stance. And in terms of the year-end dividend, I do think that it will be KRW 1,361 per share. So if we look at the same situation, I think that for Q1, Q2 and Q3, you can expect in general, where the dividends will sit. And then in terms of the year-end dividends for 2026, again, we would look at whether the CET1 ratio is above 13% as our general target is. And assuming that is the situation, we would determine what the year-end dividends are. So in terms of our quarterly dividends and our year-end dividends in terms of the approach that we take, that will not in itself change. So for this year, if our CET1 ratio does maintain a level that is comfortably above 13%, then based upon that, then from 2027, I do think that we will be able to see equal contributions across the first to fourth quarter or each and every quarter, similar to our competitors. However, rather than splitting it out across all quarters, we don't necessarily believe that, that is the most efficient manner. We do believe it's more important to satisfy the commitments that we had made to the market. And in terms of the CET1 ratio that we have, being able to satisfy the needs that our customers have in light of where our capital ratios sit. So up until 2026, we're going to maintain the stance that we currently have.

And we'll move on to the next question from KIS, Baek Doosan.

I am Baek Doosan from KIS, and I also have a question regarding dividends. You talked about the nontaxable dividends and the relevant resources amount to KRW 6.3 trillion. Last year, we brought in around KRW 3 trillion. So I would like to know how the size of the resources increased.

Thank you for the question. I'm Kwak Seong-Min, CFO. And let me answer your question. In 2025, in our corporate value up plan at the shareholder meeting in 2025 March, we transferred KRW 3 trillion of capital surplus to retained earnings. So that is all publicly available information. But lesser known is that is another aspect of the shareholder meeting agenda. So 4 years ago, in 2021, we transferred KRW 4 trillion from capital surplus to retained earnings. And the reason we did that back then was because in 2019, the financial group was relaunched. And according to the IFRS accounting standards, we relaunched the financial group with share exchange. And so the separate and consolidated financial statements need to be integrated. And unlike the competitors, the capital structure of the separate and consolidated financial structure was there. But in reality, there was no reason for it to be different. It was only because of accounting standards. And as you know, the resources will come from the separate financial statements according to commercial code, not the consolidated financial statements. So in conclusion, so we had an unreasonable situation at that time where we needed to normalize the situation. So in 2021, KRW 4 trillion of capital surplus was transferred to retained earnings, and then we increased the payable resources. And then from 3 years ago, since we have been making efforts to increase the dividends. So out of the KRW 4 trillion, KRW 700 billion we already used. So we have about KRW 3.3 trillion as outstanding balance. So to make sure we satisfy all of the legal requirements and the tax requirements to ensure that we do not have any issues that pop up in the future, this we received legal interpretation and tax interpretation that we can use this resource for nontaxable dividends. So out of the KRW 4 trillion, we still have KRW 3.3 trillion. And then in 2025 March, we put in KRW 3 trillion. So total KRW 6.3 trillion is the available resources. So after KRW 5,580 dividends, we believe that around KRW 5.7 trillion will remain. In 2026, we will be using the KRW 5.7 trillion for the quarterly dividends and all of the dividends. So it will all be nontaxable. So in 2025, nontaxable dividend was only for the year-end dividend. So the impact would have been relatively small. But from 2026 onwards, the quarterly dividend will also be nontaxable. So the actual impact will increase in 2026.

Yes. The next question will come from Daishin Securities, Park Hye-jin.

This is Park Hye-jin from Daishin Securities. And I would like to ask about the KRW 189 billion nonoperating loss that you have, if you could break it down for this. And also in your corporate enhancement -- value enhancement plan, I do think that the nonbank side contribution is around 20%. What do you look about -- how do you see the outlook going forward? Because it does seem to be that on the brokerage side that there is a more favorable environment. So maybe in terms of your mid- to long-term plan, there could be an acceleration of the realization of that. So in general, if you look at the overall business outlook, including your nonbanking business, if you could discuss that, that would be appreciated.

Yes. Thank you for your question. If you give us some time, we will answer.

Yes, talking about the nonoperating income side and the overall line item there. So for the competitors, I do think that this was mentioned already. With regards to the bad bank, there was a KRW 50 billion contribution. And in addition to that, on the LTV fine, we have around KRW 52 billion, another minus or deducting side there. So in terms of the KRW 52 billion, this is fully provisioned against, and we do set aside at other provisions. So it's fully provisioned against already. And our competitors, we understand there could be various legal views. We didn't do a partial recognition. We fully provisioned. So I think that if we do take in consideration what their view would be in terms of the fines on this side and also according to how the litigation plays out, we actually believe that there could be a reversal. So we do think that there's a possibility that we would be able to see some upside from that taking place. And in addition to that, on the security side, to talk about any rights offerings, I do think that, that was something that was mentioned, and I did see the press reports. So if you look at the situation right now, the overall total capital base is around KRW 2.2 trillion. And so for the securities side, according -- different from the insurance business strategy, we do want to grow this business ourselves. So over the mid- to long term, to be a mega IB and also to be mega securities, we do think that it's inevitable that there will have to be capital increases that take place. For the license periods and taking all things into consideration, we do think that it is inevitable. So this is something that is under review. But for the company as a whole, we are going to look at the mid- to long-term capital management plan and then gradually implement any increases that are necessary. So over the mid- to long term to become a mega IB, we do understand that we will have to make more contributions. So in terms of the application, in terms of the licensing itself, this is all something that takes time. So again, it will be a gradual process. And according to that process, we will take gradual action. So we don't have any specific size or timing that we're thinking about as of now. But in terms of becoming a mega IB, according to that schedule, it is under review as of now. So on the securities side, if there is a capital increase, Then, of course, in light with the support for productive financing and also in terms of the future co-growth program, we do want to have more support for venture capital. So even if we do make capital increases; on the security side, it will not have an impact on our CET1 ratio. And we also believe that we have more room to put in more capital versus our competitors. There's no legal restrictions. So through doing so, we will try to pursue the top line growth of the securities firms so that we can have a contribution on our top line from the nonbank side. So over the midterm horizon, we will set a business plan forth to this aim and try to achieve it.

We will move on to the next question from NH Investment Securities, Jung Jun-Sup.

I am Jung Jun-Sup Jun from NH Securities. I have a question regarding CET1 ratio, and it improved significantly this year. 2026, you are working to achieve 13% ahead of schedule. So you talked about the shareholder buyback, and I think it's up to June. So I think you are looking to conduct the share buyback program in the second half. When do you think that will actually happen? When do you think you can actually achieve 13%? If you have the guidance for CET1 in the second half, I think I'll get a better idea of the size of the share buyback. And can you also give us more color on the different strategies that you have? For example, you'll be disposing the marketable securities? Or are there plans to have a paid-in capital increase and so on?

Thank you for the question. And just give us 1 minute while we prepare the answer.

I am CFO, Kwak Seong-Min. Regarding the CET1 ratio, we mentioned earlier today, as of 2025 year-end, it was 12.9%. Those are preliminary numbers. So we are close to 13% at the moment. So in 2026, we feel that like mentioned earlier, I think I was a little bit more cautious, but we do believe we can comfortably achieve 13% in 2026. In terms of the timing, probably we will be able to achieve that in the first half, and our financial business plan is based on that assumption. The government is improving the overall institutional framework to encourage productive finance. And I think that can contribute to our own efforts as well. On top of that, we have internal efforts that we are making. We are developing those plans for 2026. So it's a little bit too early to share that with you today, but we are currently developing the plans. For example, you have the idle real estate disposal that was included in the corporate value enhancement plan, but we are making multifaceted efforts to ensure that we can reach early 13%. And if we progress as expected, we are quite confident that we can reach and go over 13% in the first half. That is why, like you said, the KRW 200 billion that we announced is a 4-month trust contract. So it's from February to June, the purchasing will happen during that period. And by the end of June, we plan to cancel those shares. And the details are in the disclosure. Then if -- we mentioned that if we expect CET1 to go over 13%, we can review additional shareholder buyback in the second half. So I think that is quite a realistic plan that we have. So in Q1 or in first half earnings call, I think we may be able to share some positive news regarding that topic.

So the next question will be from HSBC, Won Jaewoong.

Thank you for your strong performance amidst a challenging environment. And with regards to TSR, also, it does seem that you have given a lot of thought about this and have come up with a detailed plan. So thank you for that. However, in terms of the news reports, because it's already out and also because there's a question, this is a question that inevitably, I think I have to ask. If you look at the news reports; on the security side, right now, there is talk about a KRW 1 trillion capital increase each and every year so that you would be able to fill in your capital base. So in terms of the CET1 ratio, you said that it would not have an impact there. However, if you do make a KRW 1 trillion contribution in terms of the CET1 ratio targets that you have, is it possible to do so without impacting your CET1? So how should we look at these 2 numbers because I think that we would need a bit more comfort about this issue? And second, I think that if you look at ABL, if you look at their core capital ratio, maybe it's around 30% or 40% right now. And in the case of Tongyang also, it's being maintained at around 53%. So for Tier 1, if this is something that is introduced, then I do think that you will actually have to take more additional action. So this also would it not have an impact on your CET1 ratio? If you could elaborate a bit more about that, that would also be appreciated.

Yes, thank you very much. And while we prepare, if you could just wait for a minute.

Yes. On the security side and the capital increases, I do understand that there was an article by a press outlet. So we did talk to them about that. But I do think that it was over exaggerated somewhat. So in terms of the article in itself, I think that you should just understand it's a news article. And in terms of our organic growth, we want to grow our overall securities firm. And according to that strategy, on a step-by-step basis, of course, there will be a capital increase. In terms of that, that's the principle that we have. So from this year, whether it will start this year or whether it will start next year is something that we're still reviewing. Once we have made a determination and according to the size, then it could be subject to disclosure, maybe not. But we will fluidly communicate with the market, so the market can recognize the situation and be aware of it. And as mentioned before, right now, it's not only being designated as a mega IB because, of course, that would be something that we would be pursuing under the process that we want. There is a preliminary license that is required. There's a 2-year grace period. So as mentioned before, it's KRW 1.2 trillion. So even if it goes to KRW 2 trillion, KRW 3 trillion, going step by step, there are time requirements that you need to fulfill. So according to that and according to the government's overall rules, we need to follow that process. So it's not a short-term situation. It's more of a midterm type of situation and the capital increases cannot help but take place in a gradual manner because of that. And therefore, once the capital increases are decided, then through our IR department or through other outlets, we will try to communicate as much as possible. And I did mention that it would not hit the CET1 ratio. And what that's making is that the action in itself does not have an impact on our CET1 ratio at the holding company level. However, if the securities company does engage in S&T businesses or investment banking businesses, as they utilize that capital, of course, there will be asset growth that will take place. And because the asset growth would increase our RWA, we do think that the impact of that from the capital increase that they do enjoy, we do think that they would be able to engage in activities that would offset the increase in the RWA from the profitability that they enjoy from doing so. So at the end of the day, we do think that there would not be an impact on the CET1 ratio in itself. And I think that if they are able to generate an ROE, then that should not be a situation that would be negative at the group level. And on the insurance side, it's not the K-ICS ratio, but there is going to be a core capital ratio or maybe Tier 1 ratio that's going to be introduced. In terms of the timing of that, it's not '26, but it's 2027. And at the government level also, they are trying to look into avenues that giving maybe a brief period until 2030, so that it would not impact the insurance company's operations. So because it's not a disclosure factor yet, I can't go into the details because the K-ICS ratio in itself is official while other numbers are not. But I think that internally, if you look at the situation, we are preparing for this. And at the insurance company level also, of course, from 2027, they will be managing their core capital ratio. So for the 50% ratio in itself, we do think that as of now, as of the end of '25, if we do our own calculations, we actually are comfortably above that in our insurance businesses. So in terms of this core capital ratio, as of now, I don't think that there would be any request that we would have to make for an exemption or a delay. Even with what we have right now in terms of the operations, both companies, we do believe we'll be able to maintain a ratio that would be above the required amount.

Thank you for that. We do not have any further questions at the moment. For this quarter, we have also received questions on our website, especially regarding shareholder return. But I think our presentation today regarding our corporate value enhancement plan and the Q&A session have supplied sufficient information on that topic. So we will not go through the individual questions right now. If there are no further questions, we will end the Q&A session here. This will conclude the annual earnings call for 2025 of Woori Financial Group. Thank you for your time today.

Good afternoon. I am Han Hong Sung, Head of IR at Woori Financial Group. Let me first begin by thanking everyone for taking time to participate in this earnings call for Woori Financial Group. On today's call, we have the group CFO, Lee Sung-Wook; Group CDO, Oak Il-Jin; and the group's Risk Management division, Senior General Manager, Park Jang-Geun on the call. On today's call, the group CFO, Lee Sung-Wook, will give a presentation on the earnings performance. After which, we will have a Q&A session. Please note that the earnings call is being conducted with simultaneous interpretation for our overseas investors. Now let us start our presentation on Woori Financial Group's Earnings for the Third Quarter of 2025.

Good afternoon. This is Lee Sung-Wook, the CFO of Woori Financial Group. Let me go over the third quarter performance for 2025. I do have a cold, so please understand if my voice is a bit rough, and please turn to Page 3 of the presentation material that has been disclosed on our website. First, let me discuss net income. Woori Financial Group's year-to-date net income as of the third quarter end was up by 5.1% to KRW 2,796.4 billion, which was a Y-o-Y increase, as mentioned before, of 5.1%. Net income in the third quarter alone was KRW 1,244.4 billion, representing a significant increase of KRW 300 billion quarter-on-quarter. Amid uncertain internal and external conditions, including the exchange rate and outcome of tariff negotiations, this net income was the result of balanced growth between our interest and noninterest income and the contribution from the insurance acquisition. In particular, due to continuous efforts to rebalance assets and optimize funding and investments, our NIM improved for the third consecutive quarter. Stronger marketing capabilities from key subsidiaries, such as the credit card and capital business, led to fee income for the quarter to reach an all-time high. And in addition, the newly acquired insurance business contributed, which further have diversified the group's profit structure. In the third quarter, we completed the revaluation of the fair value of Tongyang and ABL's assets and liabilities and included this in the group's performance. So the bargain purchase price and adjustments from consideration together is around KRW 550 billion, while the decline in the CET ratio was only approximately 5 basis points, which enabled us to reconfirm that from a financial standpoint, it was an optimal M&A with almost no negative impact to our capital ratio. Moreover, in addition to the continuous asset rebalancing and active capital ratio management efforts that we have been making, we are now focusing on strengthening the stability of our financial structure by preemptively provisioning reserves for the vulnerable portions of our nonbank business. Based on these stable fundamentals, the group is planning to expand productive financing to support future sustainable growth. Next, let me discuss the group's capital ratios. As of September 2025, the group's preliminary CET ratio is 12.92% showing a 12% basis point increase Q-o-Q and [ 80 point ] increase from the end of last year, far surpassing the 2025 year-end target of 12.5%. In addition to the insurance acquisition, the weaker won against the U.S. dollar led to a 7 basis point decline in the CET1 ratio, but the capital ratio actually increased, proving the sound capital management capabilities of the group. This is the result of concerted efforts to manage risk-weighted assets across all business areas of the group, such as being selective in asset growth and continuously decreasing exchange rate sensitive assets. Going forward, the group will continue this capital management stance and swiftly execute value of plans based on its CET1 ratio. For Woori Financial Group, we relaunched our securities arm last year and also completed the insurance acquisition this year, completing the creation of a comprehensive financial services group, thus focusing on the 3 main pillars of the bank, brokerage and insurance business, we are planning to maximize group synergies. For example, between the bank and securities business, after acquiring the securities license, the group was able to do a KRW 3.9 trillion deal through CIB joint underwriting. And in Wealth Management in just 3 months of acquiring the insurance business, Tongyang Life and ABL's percentage of sales from the Bancassurance channel has grown from 9.8% to 22.5%. Moving forward by balancing growth between bank and nonbank business lines and ranking up synergies across group companies, Woori Financial Group will further strengthen its competitiveness as a comprehensive financial services group and create a business for sustainable growth. Next, let me dive into more details about earnings by business area, and please turn to Page 4. First, let me go over the net operating revenue and NIM. The group's third quarter year-to-date net operating revenue totaled KRW 8,173.4 billion, up by 2.3% Y-o-Y. And in the third quarter alone, it was KRW 2,773.3 billion, which is similar to the previous quarter. As financial market volatility and other internal and external uncertainties continue, margin improvements and selective growth led to solid interest income. In addition, the contributions from the insurance business led to better noninterest income, which has further solidified the group's revenue base. In addition, if we look at Woori Bank's third quarter NIM, it was 1.48%, which is 3 basis points higher Q-o-Q and 8 basis points more than the end of last year. It is the third consecutive quarterly improvement this year. This is the result of active funding cost savings and asset rebalancing efforts where -- which consistently improved our profitability. In the fourth quarter, even if the base cut is -- base rate is cut further, the bank is planning to expand its core deposit base and systematically manage ALM to continue stable NIM trends and maintain a level of 1.5% for the year. Next, let me go over the loan book. As of the third quarter end, the bank's loans totaled KRW 331 trillion, slightly increasing versus the end of June. On the corporate loan side, growth strategy is focused on new growth areas and high-quality corporates, which led to the loan book to remain flat quarter-over-quarter at KRW 178 trillion. On the retail loan side, in light of the government's policy to control total loan growth, the bank was more selective in loan origination, which resulted in loans growing 150% (sic) [ 1.5% ] quarter-over-quarter to KRW 1.5 trillion (sic) [ KRW 150 trillion ]. Looking ahead, Woori Financial, in line with the government's policy direction, will manage total household loan growth within the target level, while also utilizing its corporate finance competitiveness via the Future Co-Growth Project, increasing the flow of capital to more productive areas within the economy. In particular, we will join in efforts by the financial authorities to make capital regulation more reasonable and continue efforts by the group to rebalance assets to secure more capacity on capital ratios. In addition, risk management across all processes, from underwriting to loan management will be strengthened to ensure future growth can continue with any impact on capital ratios and asset quality. Next is on the group's noninterest income. As of the third quarter, the group's cumulative noninterest income amounted to KRW 1,441.5 billion, up 4.6% year-on-year. And on a quarterly basis, it rose 5.3% from the previous quarter to KRW 555.2 billion. Despite a decline in foreign exchange-related gains due to the rise in exchange rates, the group continued to post solid growth in noninterest income, supported by robust fee income and the inclusion of the insurance subsidiaries performance starting this quarter. In particular, core fee income, driven by improvements across all business lines of both the banking and nonbanking segments, including the wealth management business, credit card and lease, was up 7.9% versus previous quarter to KRW 563.7 billion, reaching a record quarterly high. Going forward, Woori Financial Group, through expanding the retail customer base centered on the insurance business and strengthening collaboration between the bank and securities IB segments, will actively pursue new business opportunities to enhance the group's proportion of noninterest income and to achieve balanced growth between banking and nonbanking operations. Next, I will elaborate on expense. Please refer to Page 5. Turning to the group's SG&A expense. As of the third quarter of 2025, the group's cumulative SG&A expense amounted to KRW 3,690.3 billion while third quarter SG&A expense stood at KRW 1,211.2 billion, a slight increase of 3.2% from the previous quarter. Accordingly, the group's cost-to-income ratio was 43.1%. Looking ahead, while we will continue to invest in the group's AX initiatives, enhancing digital competitiveness and strengthening brand value, we will also maintain disciplined cost management at the group level through reducing recurring operating expenses, optimizing channels and workforce and leveraging AI to improve operational efficiency. Next, I will discuss the group's credit cost and asset quality. As of the third quarter of 2025, the group's cumulative credit cost amounted to KRW 1,517.6 billion. Third quarter credit costs totaled KRW 574.3 billion, an increase of 13.1% from the previous quarter. This amount, including KRW 98 billion in provisions associated with completion-guarantee projects booked as part of the group's proactive risk management efforts from the previous quarter, incorporates approximately KRW 150 billion in one-off items. With this, most of the provisioning issues related to completion-guarantee projects appear to have been largely resolved. Excluding these one-off factors, credit costs remain at a similar level to the previous quarter, and the group's credit cost ratio is well managed within the target range at 0.42%. Amid continued uncertainties, such as exchange rate volatility, trade negotiations and concerns over a slowdown in the real economy, the group, through active NPL sales and write-offs and proactive risk management in the nonbanking sector, is conducting more thorough risk management than ever before, maintaining the proportion of prime corporate loans at around 84%, and managing the ratio of loan loss reserves and regulatory reserves to total credit at 1.6%, thereby securing a stable loss absorption capacity. This year, Woori Financial Group will conduct a comprehensive review of the group's risk factors. And after securing sufficient risk management capabilities, will pursue sustainable growth grounded in solid asset quality. I will now move on to capital adequacy and shareholder return policy. Please refer to Page 6. As mentioned earlier, as of the end of September 2025, the group's common equity Tier 1 ratio is expected to be 12.92% on a preliminary basis. Despite factors, such as the insurance subsidiary acquisition and the impact of a stronger exchange rate, the group CET1 ratio improved significantly by approximately 80 basis points versus last year-end, demonstrating the group's strong capital management capability. Woori Financial Group will not remain complacent with this achievement, and aims not only to stably exceed a CET1 ratio of 12.5% by the end of 2025, but despite ongoing uncertainties home and abroad, such as exchange rate volatility and potential regulatory fines, we'll also pursue swift and proactive capital management with the goal of achieving a 13% CET1 ratio ahead of schedule in 2026. Meanwhile, the Board of Directors of Woori Financial Group at its meeting held on October 24, approved a quarterly cash dividend of KRW 200 per share with a record date set for November 10, as previously announced. In this quarter, Woori Financial Group successfully completed the acquisition of an insurance subsidiary, a process that has been underway for over a year. Through this acquisition, we have faithfully upheld our commitment to the market to minimize any negative impact on our capital ratio and to avoid overpaying for the transaction. Now with a diversified business portfolio and enhanced group synergy, we'll begin in earnest, our transition towards becoming a comprehensive financial services group. Furthermore, in connection with the Future Co-Growth Project announced last September, we intend to leverage our corporate finance expertise to support the real economy, focusing on new growth and advanced strategic industries. And through this, we will not only fulfill the essential role of finance, but also establish a sustainable foundation for the group's long-term growth. Since the announcement of the corporate value of initiative, Woori Financial Group has faithfully implemented most of the plans presented to the market. Discussions and deliberations led by the Board of Directors on how to enhance corporate value are ongoing and will continue in the future. Through these efforts, we will focus the group's capabilities on enhancing long-term shareholder value. This concludes Woori Financial Group's Third Quarter of 2025 earnings presentation. Thank you.

Yes. Thank you for the presentation. And now we will -- before starting the Q&A session, for this year, because there were some factors related to the presentation, including the insurance acquisition, there will be some additional comments related to the performance by the CFO.

Yes. So if we look at the third quarter this year, if you look at our performance, as you can see, there has been a lot of volatility. So overall, there were some one-off factors. And maybe I did believe that maybe touching upon these first would be appropriate. So of course, there was the inclusion of the insurance business, but also with regards to the preemptive provisioning, there were also some one-off factors there. So in the third quarter in total, if we look at the insurance business, of course, the profit increase is there. But in terms of risk management, there were a lot of efforts that we have made. So please take that into consideration and listen to what I have to say. So first on the insurance acquisition side, because of the bargain acquisition gains after we included the insurance business from July 1, we did the PPA. And as a result of that, there was a KRW 580 billion gain that we had recognized. And of course, for the past -- for the next 1 year, because of the accounting for that, there could be some adjustments to this. However, with regards to the adjustments for consolidation, there was a negative KRW 25 billion that was recognized. So at the end of the day, the bargain gain, in total, was around KRW 556 billion. So in addition to that, on the -- there was also a KRW 33 billion negative impact that was also reflect. And in the third quarter, for the completion-guarantee trust, there was also KRW 98 billion that we have recognized in terms of provisioning. So as a result of that, in total for this year, there was around KRW 200 billion that we have recognized. On the bank side, there are some areas in which there were collateral value decreases. And in light of that, there was some preemptive provisioning that we had did that was around KRW 54 billion. And recently -- there was some press reports about the situation. But with regards to KIKO there was a litigation in 2028, and the final results have came out, and there were some areas in which we lost. So there was a KRW 32 billion additional provision that we have set aside for that purpose. In addition, on the nonoperating side, related to the completion-guarantee trust, there was a significant provision that we have set aside. So therefore, for the goodwill, there were some impairment losses that we have also recognized of around KRW 39 billion. So in total, if you look at the overall impact of this, if you look at the bargain gains that we have enjoyed, and everything above that was on the operating business and others was on a nonoperating basis. So if we look at the net income basis, at the end of the day, there was one-off factors of around KRW 360 billion in total. So with regards to the completion-guarantee trust impact, there may be some small changes going forward, but we don't believe that there will be any significant provisioning that will be required. So I do believe that this is probably a question that you were very curious about. So I thought that it would be good to talk about this first before we went to the Q&A.

[Operator Instructions] So for the first question will be from NH Securities. It will be Jung Jun-Sup.

There are 2 questions that I would like to ask you. So first would be that in the third quarter, because you did the insurance acquisition was completed, and I would like to know what the next phase is. So in terms of more efficient capital management, rather than being 2 separate entities, we believe that having it together and then also making sure that it would be a full subsidiary of the group as a whole. So with regards to the information that you can share with us, any more details that you could share would be appreciated. Second is that after the acquisition, if you look at the capital ratios, it still looks like their capital ratios are very sound. So even if it's not in the immediate future, but going forward, are there any M&A opportunities that you would be looking at in terms of interest areas? So maybe not in the immediate future, but even down the road, are there any areas that you would be interested in, in terms of M&A opportunities?

So thank you for your questions and maybe we can answer your questions. Yes. This is the CFO, Lee Sung-Wook. So first, in terms of the insurance, in terms of the merger and also the follow-up after the acquisition, I do think that this is an area that a lot of the investors are interested in. And also in terms of the Tongyang Life shareholders, they're also very interested in that also. So as of now, we did the -- and completed the acquisition as of July 1 for Tongyang and ABL Life. And since then, for the mid- to long-term direction, this is something that we're doing a diagnosis about in terms of the overall business operations. So for Tongyang Life, making it a 100% subsidiary or merging the 2 entities, this is something that we are still reviewing, but we have not made any decisions yet. And in addition, we do believe that it will require a bit more time for us to come to a conclusion. And in addition to that, whether we should make a 100% subsidiary or whether we will merge the 2, if there's any major decisions that are made, of course, we will make sure to disclose to and share to you. And in addition to that, we will look at the laws and regulations to make sure that everything is done according to the due process. Secondly, about your question about the M&A side. I think that this is something that we continue to talk about. But after the brokerage company, insurance company being added on, in terms of our business portfolio, we think that it has been completed. So over the mid to long term, I think that if you look in terms of focusing on strengthening the competitiveness of the companies that we have and also maybe expanding our presence, M&A could be an option. But right now, on the security side and insurance side, because we have been newly added, and we do believe that our overall business portfolio is complete. Right now, if there are any M&As that require capital, I think that being interested in -- rather than being interested in that, I think that we're more interested in strengthening our market competitiveness in the areas in which we're doing business already, particularly on the noninterest income side. So with regards to the nonbank businesses of securities and insurance companies, we want to strengthen that further. So that would be one of the main focus. And in addition to that, we will also continue to conduct our value program and also manage our risk-weighted asset and also conduct and successfully complete our Future Co-Growth Projects. So in the middle, I did talk about this during the presentation, but achieving the CET1 ratio of 13%, this was -- the target year was 2027, but we have accelerated that to 2026. So this is something that we are discussing with our directors. So by doing this and doing -- putting against our best efforts, we think that we can efficiently manage our capital and still also achieve the best outcome for the business. Thank you.

The next question is by Baek Doosan from Korea Investment & Securities.

Yes. I am Baek Doosan from Korea Investment & Securities. I also have 2 questions. The very first question has to do with the completion-guarantee project. I can see that it has been largely resolved. But in addition to that, I can see that there were still quite hefty preemptive provisioning. So taking that into consideration, I'd like to understand if there's any guidance in terms of the improvement going forward in terms of credit cost? And second, the Future Co-Growth Project that was launched and with regard to the funding, the plans that you have for key industries, this project in itself is a massive project. And therefore, in terms of capital ratio or noninterest income or corporate loans, I think that it will have an impact on all of these numbers. So we'd like to understand what are the plans? What's the forecast you have going forward?

Yes. Thank you very much for the question. So please bear with us for just a moment as we get ready to answer your question.

I am Park Jang-Geun, Senior General Manager from the Risk Management division. First, let me talk about credit cost. The third quarter credit cost increased by 3 bps to 52 bps. And that was already mentioned. In second quarter, KRW 86 billion for the trust and this quarter, KRW 98 billion, that was the provisioning in terms of managing our assets. And due to the sluggish economy in the sluggish construction sector, with regard to collateral loans at the banking sector, that was a total of KRW 54 billion of provisioning and one-off items amounted to KRW 152 billion. And therefore, the coverage rate also increased to 130%. So if we exclude these one-off items, the credit cost ratio is 42 bp. However, considering that there has been a delay in the rates -- the rate cuts, we believe that the cost -- the normalized credit cost will still be quite high. But we -- as mentioned, the completion-guarantee projects has been mostly resolved. So therefore, there wouldn't be any significant provisioning to follow going forward. And with regard to prime assets, especially in the banks, if we look at the corporate loans, we've been seeing a downturn in terms of new defaults in terms of corporate loans. Ever since 2024, we believe that there will be -- the impact of rate cuts is something that we are continuously monitoring at the Risk Management division. And in the future, with the economic boost, stimulus package with the government and with regards to the rate policy going forward, we believe that in the fourth quarter, credit costs will stabilize. So that is all for me.

Yes, this is the CFO, Lee Sung-Wook. And so with regards to the Future Co-Growth Projects, this is a very big project. I do think that with regards to capital and also in terms of the capital ratios, there may be some concern about such a situation. But with regards to this, maybe just elaborating a bit will help you out. So from us, we do want to transfer into providing more productive financing. So as of the end of September, we announced our future core growth project, and across the group for the next 5 years, there will be around KRW 80 trillion that we will be supplying and supporting. And so according to this project right now, in terms of the asset growth and the impact of this, this was all taken into consideration before we made the announcement to the market. So for the KRW 80 trillion across the 5 years, if you look at the impact on our risk-weighted assets, it will be around half. And on this, of course, how we can offset it against the capital ratio is probably an issue that you will be focusing on. And this year, if you look at the overall asset rebalancing efforts that we have made for the next 5 years, due to that, this is an effort that we will continue for the next 5 years. And in addition to that, because regulations are being eased at the financial authority side. And in addition to that, we also have a CET1 ratio target of 13%. So the trends that we see in our capital ratio was all taken into consideration before we formulated this plan. In addition to that, on the corporate loan side, we -- during the financial crisis, we have accumulated a loss. There's a very strong underwriting standards and price. So as a result of that, we do think that we can manage our capital ratio properly and still continue growth in this area. So within the year, I think that if you look at the capital ratio trends that we have seen, there has been an 80 basis point increase versus the end of last year. And this is even after the acquisition of the insurance arm. So we do think that we do have a credible trend that we are creating, and this is something that we have fully discussed with the BOD, and we will come up with our business plan accordingly. In addition, going forward, we will continue to also manage our loan balance through asset rebalancing and also manage the retail balancing side. So we're also planning to make other efforts. So for the shareholder value programs, this is something that we will continue to implement without issue and continue to provide total -- better total shareholder return.

The next question is -- will be by Kim Do Ha from Hanwha Investment & Securities.

I have a question with regard to the acquisition. So when we had the acquisition ahead of us, you talked about the purchase -- market purchase gains is going to be utilized for a total shareholder return. And I believe that within a limit of 10% -- if it's within that, I've heard that the gains would be utilized for shareholder returns. So right now, we have around KRW 580 billion or so of gains and I would like to understand, would this be included in the shareholder return plan of this year? And I understand that the TSR will be maintained as such because rather than providing a dividend at year-end, after November, it could be in the treasury stock related plans that you may have? Or would it be something that would be utilizing next year? So if you can give us some more information on that, that would be great. And the second question is, around the world, these days, we've been witnessing security issues, hacking issues. So with regard to that, are there any investments being made right now to prevent or any cybersecurity-related prevention methods or plans that you have in place.

Yes. Thank you very much for those questions. Please wait before we answer your questions.

Yes. With regard to the bargain purchase gains, it's a total of KRW 580 billion and it's included in the net income. So in the first half, IR last year, based on our corporate value plan, in terms of our TSR, we've mentioned that we're putting our best efforts to have that included. And with regard to the insurance acquisition, the impact it has on the capital ratio, it was quite limited and minimized. But with regard to TSR, year-end, we have -- we want to see the CET1 and the overall financial volatility, and the TSR will be decided as such. And in the market, there are expectations, and we will try to cater to the expectations as much as possible, and we'll do our best to make sure that we can cater to those expectations. Thank you.

I am Oak Il-Jin, CDO. So recently, there were major security-related issues at telcos and financial firms. And that's why there was a company to review across all subsidiaries, and there were no issues identified. Recently, there was, let's say, multi-authentication and security patches, terminal-related security issues. These were the shortcomings and we were able to understand that we were following all of the internal policy when it comes to security. And in addition to that, with regard to personal information and IT security, let's say, accidents. To prevent all this, what we've done was, in August until year-end, with security firm and the company, we will make sure to understand whether there are any loopholes. And for the recent 3 years, the government's investment into security is 11% when it comes to total IT investments. And it's 8.8% for financial funds and insurance firms. In the case of the U.S., it's 10.5% and it's higher than that at 11%. So with regard to information security investments, we will continue on to increase that portion in our investments.

Yes, the next question is from HSBC, Won Jaewoong.

Amid a challenging environment, thank you for your strong performance. And there are 2 questions that I would like to ask you. The first question is with regards to an early retirement. So if we look at last year, we actually reflected into the first quarter of this year. So for this year's early retirement, would it be fourth quarter or would it be first quarter of next year? So if there any plans, if you could share that with us, that would be appreciated. So in terms of the CET1 assumptions or in terms of the overall profitability, it would be easier to assume or make the estimates. So if you could share the plans on this, that would be appreciated. And second, with regards to portfolio diversification, you have successfully acquired 2 insurance companies. And I do believe that you will properly manage this business going forward. But as far as I understand, the 2 insurance companies, after being acquired, next year in terms of the profit contribution, it will be 1% of the ROE. So that means that the overall contribution would be about KRW 300 billion. But up into the third quarter, if you look at the net income, right now, it has been around KRW 150 billion. So for ABL, I don't know what the third quarter numbers is. So I'm not 100% accurate, but I do think that it would be around this level. So do you think that it could be larger next year? And in terms of the bargain gains this year, it was around KRW 550 billion. So for next year, in terms of these gains, how much contribution do you think will actually be made on the net income line? So your thoughts on this topic would be appreciated.

Yes, thank you for your questions. So maybe if you give us a few minutes, we'll answer your question. First, in terms of early retirement, in the case of last year, we actually did it in the first quarter of this year. And the reason why we did it that way is because it's based upon the agreement with the labor union. So therefore, there could be some difference of opinions. And as a result of that, that is why it was -- it took place in the first quarter. So right now, if you look at the discussions with the labor union that are ongoing right now, I think that it is something that we will have to see in terms of how it happens going forward. So it could be in December, it could be in January. But I think that because it needs an agreement, we will have to wait and see how it actually plays out. And with regards to insurance acquisition, as you have just mentioned, in 2025, if you look at most of the companies, their profits were very large. And then this year, also, there are some that are showing strong performance. But in terms of the K-ICS ratio or other product structures, I do think that with regards to the assumptions, there are some changes that are taking place. So this year, as we have continuously talked and mentioned, after the acquisition of the insurance business, the first thing that we have actually done is that we are doing a business investigation to look at how we can fundamentally change the competitiveness of the business in itself and it changes accordingly. So in 2026, we do think that, of course, there will be some profit contribution from the insurance side. But in terms of the K-ICS ratio, but on the capital side, we think that up and strengthening that up will be our top priority to make sure that the burden on the group from that would be minimal as small as possible. And also, we want to stabilize the organization. So in 2024, if you look at right now, there was around KRW 400 billion. And in terms of the percentage, it would be around KRW 300 billion in contribution that we would have seen. But for next year, we think that it would be difficult to reach that level in the net income side. So right now, in terms of priority, it will [ B2B ] the fixed ratio and the other sides. And then thereafter, I think that we could actually look at how we can expand our business going forward. So that have been said, so the ROE, 1%, is something that was based upon 2024. So though we will not go to that ratio, we do think that there will be a contribution that we will be able to see in full fledged manner from next year. Thank you.

Next question will be by Jeong Tae Joon of Mirae Investment Securities.

Yes. I'm Jeong Tae Joon from Mirae Asset. I also have a question with regard to the insurance arm. So with regard to the profitability and as well as the interest cost and the securities, I can see that this has been reflected all separately in separate items. But in terms of net income and profitability, I'd like to understand what was the contribution in total this quarter? And it's similar to the previous question, where the bargain purchase gain was quite significant, more than expected. So then based on consolidation, it means that it's not as high based on consolidation. And that in terms of the contribution, it may be a bit difficult to book in it's significant absolute terms. But of course, I do know that the management diagnosis is still underway. But I think that if you can please give us a ballpark figure, it would help us better our understanding.

Yes. Thank you for the question. Please wait. We will soon answer your question. Yes. So with regard to the income from the insurance arm, so we have investment income and insurance income. So all in all, if we combine the 2 companies, it is around KRW 70 billion to KRW 80 billion. And in terms of net income, it's around KRW 50 billion in terms of the contribution from these 2 firms. And in the future, with regard to adjustments from consolidation, that's how it would be booked. So in terms of insurance accounting, as was already mentioned, after the acquisition, within the insurance, there's an accounting that would follow, and there's also an accounting for the holding company because we went through the PPA process. So based on PPA, it will be a dual accounting, a dual booking. So in the future, we're going to run a simulation. And based on that, of course, it will all differ by year, but we believe that it will be around KRW 30 billion to KRW 40 billion annually, a positive, a plus KRW 30 billion to KRW 40 billion. So there could be some volatility or variances throughout the years. But based on our long-term simulation, we believe that there will be a plus KRW 30 billion to KRW 40 billion of contribution that can be booked.

Yes, next question. In terms of the next question will be from Daishin Securities, Park Hye-jin.

Yes. And the question that I would like to ask you is that with regards to the [ bargain ] gains, I do think that there cannot help be a lot of questions. So with regards to the preliminary announcement of the PPA, and you said that for the next 1 year, there could be adjustments. So related to that, in terms of the adjustments that could take place, what would that actually be? So if there is an adjustment to that, I would like to understand what it would be in more detail. And the second would be with regards to the margin. So because of the asset rebalancing, I do think that the margins are being well defended. But with regards to the joint growth, you did say that you would continue such a situation. So for next year, in terms of margin, what is the outlook? And also lastly, for the securities side, also, I do think that there is probably some capital gains that you would have to actually conduct. So for those capital increases, what would be the outlook of that?

Yes. Thank you very much. There are 3 questions that you have provided, and maybe we can answer your questions. Yes. With regards to the bargain gains, I do think that this is an accounting issue. So during the next 1 year, there is the room for adjustments to take place. So right now, for the first 3 years, there will be some refining. And then after that, that will be done. So if there -- we don't think that there will be a lot of fluctuation. But if there is any, then the main area is probably going to be and what we estimate, it would be with regards to some of the fines. So for example, that could be one of the items. But this accounting to the accounting standards, there is some that we have already reflected because we have made some assumptions there. So if that realizes, then we do think that, that would lead to some changes. But we don't think that there will be any big changes in itself. And secondly, with regards to the securities, this year, after being included into the group on August 1 and what we had actually invested into was manpower and also IT. And as a result of that, the SG&A had actually increased by KRW 50 billion. So in actuality, if you look at the net income as a result of that on a Y-o-Y basis, there was a slight increase, but not very significant. So this year, we do think that when we talk about productive financing, of course, we do think that securities arm will have a big role to play. And from next year in terms of the net income contribution also, we think that it will significantly contribute at a much higher level. So right now setting our targets, but we do think that on a Y-o-Y basis, it will be at a much higher level than what is contributing this year. So from next year, we do think that the overall growth level that we will be enjoying will be much larger. And then on the NIM, I think that for this year, there was a 3 basis point increase this year. And the biggest influence there was the asset rebalancing that we have done, some of the asset growth was more prudent. And in addition to that, the CET1 ratio was another area that we put a lot of attention to. So as a result of that, on the funding side, I think that we have a more favorable funding structure, and the funding cost also has gone down, which has led to the improvement in our net interest margin. So going forward, if you look at the NIM outlook, I think that, of course, we do believe that the benchmark rate will fall going forward. But for the NIM, if you look at the long-term rates, it's already something that is already priced into the market. So in the fourth quarter or whatever happens thereafter, even if rates are further cut, we don't think that, that will further decline the long-term rates. But this year was 1.45%. And then 2026, even if there are further rate cuts, we don't believe that the impact will be very large. And in general, we do believe that around 1.4% is something that we can maintain for NIM for the time being.

Yes. Thank you. I believe that there are no more questions. So let us now respond to the questions that were posted on the website this quarter. From the 13th to the 24th of October, we received questions via our website. And in addition to our performance, AI, TSR, there are many questions across a number of domains. And we will exclude the redundant questions, but -- and 2 questions that were not addressed as of yet. One has to do with the total return on the dividend-related policy and also with regard to AI services. So with regard to the nontaxable dividend, the CFO will respond, and the CDO will respond to the second question.

Yes. So first, with regard to the nontaxable dividends and during the AGR in March, we've talked about the KRW 3 trillion that has been written back. So from the '25 dividend or retained earnings, that's when we will start to provide the dividend. So based on our corporate value of plan, we will engage in buybacks, cancellations and actively engage in shareholder return. So within -- in 2025, improving the CET1 by 80 bps to improve the TSR was the planned action taken. So we have continued on to engage in buyback and cancellation of treasury stock, and we have put in our best efforts to enhance shareholder return. And going forward, we will continue on to improve the CET1 and engage in our corporate value of plan and putting our best efforts to maximize shareholder return. Thank you.

I'm Oak Il-Jin, CDO. So with regard to the AI services, Woori Financial Group, for our customer and for our employees, for the first time we've launched many services. And already, we -- based on Gen AI, we've actually launched our deposit-related products. And right now, we do have mortgage loans. And also, we have -- we will be expanding our AI advisory when it comes to real estate-related plans and loans. And at last year-end, we launched Woori TPT. And we actually see an accuracy rate of 90% plus for even complex jobs and work. And starting from the second half of this year, our focus, particularly would be on AI agent. So we want to enhance the productivity of our employees by utilizing the AI agent. Internally, when it comes to corporate loans and RM support, especially 5 domains that we have pinpointed in order to introduce the AI agent. It has been already been laid out. And starting from early next year and in the first half of next year, we are going to particularly engage in Phase 1 for work that can apply this immediately. And then moving forward, we're going to engage in a number of innovative product launches when it comes to Gen AI, especially for productive finance, especially for corporate loans, especially auto underwriting and in terms of reducing default amongst, let's say, high default rate borrowers, we are going to make sure that we can provide accurate and timely due diligence and underwriting utilizing AI. So basically, it's about utilizing AI agents to enhance productivity, and we're going to reengineer our work process so that we can make full use of this technology. Thank you.

Yes, I am the CFO. And with regard to the overall earnings, I would like to share with you the prospects, especially for 2026. But before that, in 2025, what we've done in terms of our business portfolio is the workforce IP system for the securities arm, acquisition of the insurance arm to complete our portfolio. So in terms of overall completeness of our business, we do have the nonbanking, including asset trust where it was about focusing on preemptive provisioning, completing all that. And then also, we have been able to significantly improve CET1 in 2025. So with regard to future growth and to enhance corporate value, I believe that this was a pivotal year in terms of making sure of putting in place the foundation. And we'll make sure to manage our asset quality in the remainder of the year. In terms of 2026 in the case of the nonbanking sector, as was already mentioned, the insurance acquisition impact will kick in, in earnest. In terms of the security side, we'll be seeing increased sales from that side. In the case of the existing nonbanking, it would be about preemptive risk management, which will lead to better performance and earnings. So in terms of the nonbanking operations, we will -- and we expect significant improvement in performance. And in terms of banking sector, this year, we've been getting an aggressive asset rebalancing, and a preemptive risk management foundation has been in place, which will enable a stable revenue. And in terms of the productive finance, we'll be expanding upon that to actively grow upon that. But when it comes to capital ratio as well as asset quality ratio, we're going to make sure that we maintain this stably, so that we achieve the ratio numbers. And with regard to our value of plan and our shareholder return plan, we'll do our best to make sure that we implement the plans that have been laid out. Thank you very much.

Yes. Thank you. And this brings us to the end of Woori Financial Group's Third Quarter of 2025 Earnings Presentation. If you do have any further questions, please call the IR department, and we'll make sure to entertain your questions. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good afternoon. I am Hong Sung Han, Head of IR at Woori Financial Group. Let me first begin by thanking everyone for taking time to participate in this earnings conference call for Woori Financial Group. On today's call, we have the group CFO, Sung-Wook Lee; Group CDO, Il-Jin Oak and Group CRO, Jang-Geun Park as participants. On today's call, the group CFO, Sung-Wook Lee Wu, will give a presentation on the earnings performance, after which we will have a Q&A session. Please note that the earnings call is being conducted with simultaneous interpretation for our overseas investors. Now let us start our presentation on Woori Financial Group's earnings for the first half of 2025.

Good afternoon. This is Sung-Wook Lee, the CFO of Woori Financial Group. Let me go over the first half performance for 2025. Please turn to Page 3 of the presentation material that has been disclosed on our website. First, let me discuss net income. For the first half of 2025, Woori Financial Group's net income was KRW 1,551.3 billion, representing a Y-o-Y decrease of 11.6%. When excluding the one-off expenses related to the early retirement program conducted at the beginning of the year and preemptive provisions for a completion guarantee of Trust company, net income is similar to last year. In the first half, conservative loan loss management to address the slowdown in the economy and SG&A to expand the nonbank portfolio of the group did increase costs, but the net operating revenue, which shows the profit generation capability of the group, still maintain steady growth amid a challenging business environment. Bottom line growth based on asset rebalancing and better margins driven by funding optimization amid a falling market rate resulted in stable interest income while core fee income from the Wealth Management business and an increase in noninterest income, derived on capital market activities generated the top line performance. Second quarter net income was KRW 934.6 billion, which is KRW 300 billion higher than the first quarter. That did not beat market expectations. Next, let me discuss how we achieve the group's capital target -- capital ratio target. As of June 2025, the group's preliminary CET1 ratio is 12.76%, showing around 60 basis points increased from the end of last year and exceeding 12.5% for the first time in the history of the group. Amid a uncertain financial backdrop, the group was able to generate total profits, build an optimal portfolio based on RWA prudently managed asset sensitive to the FX rate and conduct performance assessments focused on RoRWA. These company-wide initiatives to improve the capital ratio has led to the significant improvement. The exchange rate also contributed. But even when excluding this factor, the CET1 ratio is still well above 12.5%. As we have mentioned many times, Woori Financial Group has earmarked 2025 as the year of capital ratio improvement and has been focusing all group efforts to achieve the CET1 ratio target. Based on the C2 ratio of 12.76% this quarter, the group is planning to outperform the year-end target of achieving a CET1 ratio of 12.5% and will be accelerating efforts to achieve the market expectation of 13%. Next, let me discuss our efforts to expand our business portfolio. One year after the group signed the SPA for Tongyang Life and ABL Life in August last year. As of July 1, we have included the 2 companies as affiliates of the Woori Financial Group. We are currently in the process of reevaluating all assets and liabilities held by the 2 companies at fair value. Once this is completed, we will finalize the financial impact of the acquisitions. Against a rate cycle environment, we understand the market is concerned about the capital adequacy and Insurance business outlook. However, we are planning to focus on sound capital adequacy management by maintaining a K-ICS ratio that comfortably exceeds the regulatory guideline and on profitable management focusing on financial stability to put priority on securing stable business fundamentals for both companies and ensuring the soft land as part of the group. For the securities arm, we continue to strengthen our competitiveness by acquiring the final approval for the investment trading business and launching the MTS platform. In addition, we will be fully utilizing the merchant bank license and bank corporate customer network to engage our full-fledged marketing activities. Woori Financial, with the acquisition of the Insurance and Securities businesses have completed its lineup as a comprehensive financial services group. We will strengthen the core competencies of each subsidiary and generate full synergies across the group to upgrade the fundamentals and actively satisfy the expectations of the market. Next, let me delve into more detail about earnings by area. Please turn to Page 4. First, let me go over the operating revenue and NIM. The group first half 2025 net operating revenue was KRW 5400.1 billion, up by 2.3% Y-o-Y. In the first quarter, it was KRW 2,789.2 billion, up by 6.8% quarter-over-quarter. The group faced affects in Korea and abroad, including [indiscernible] tariffs and a challenging business environment due to concerns about a slowdown in the economy. But it is still able to achieve profitable growth and defend its margin to generate sound interest income and improved noninterest income mostly core fee income to achieve stable top line growth. The bank's second quarter NIM was 1.45% and the group's NIM including the credit card business was 1.71%, which represents an increase of 1 basis point, respectively, quarter-over-quarter. In the first quarter, as there was a cut in the interest rates and even a amidst the falling interest environment due to active funding cost management and asset rebalancing, we were able to improve the loan yield. And as a result of that, for the second consecutive quarter had an increase in NIM, reaching 5 basis points for the first half in total. Although we do believe that the interest rates will continue to fall, we will continue to put in efforts to expand our core deposits and also defend the downward pressure on NIM. Let me now move on to our Loan portfolio. As of the end of June 2025, bank loans totaled KRW 329 trillion, remaining at a similar level to the end of March. In terms of corporate loans, while demand from large corporations remained solid, portfolio improvements centered on prime SME loans, brought the total to KRW 179 trillion. Retail loans increased by approximately KRW 3.7 trillion from the end of March, reaching KRW 148 trillion. Going forward, in line with the government's policy direction on household debt management, Woori Financial Group will continue to focus on managing volume of household loans. At the same time, we will strengthen financial support for future growth industries to ensure that market funds flow into more productive sectors thereby fulfilling our core role as a financial institution. In preparation for continued internal and external uncertainties, we will pursue sound and sustainable qualitative growth based on the asset rebalancing efforts that have been underway since last year. Next is on the group's noninterest income. The group's noninterest income for the first half of the year came in at KRW 886.3 billion, maintaining a similar level year-on-year. On a quarterly basis, however, it rose sharply by approximately 47% from the previous quarter, reaching KRW 527.3 million. As for core fee income growth in the Wealth Management segment was particularly notable, thanks to balanced growth between the bank and nonbank segments, the group achieved a stable quarterly level of around KRW 500 billion, resulting in cumulative first half performance exceeding KRW 1 trillion. Amid favorable market conditions such as falling interest rates and exchange rates, gains related to securities and FX valuation increased significantly. However, this was partially offset by a decline in gains from sale of loan receivables due to weakness in the NPL market. Looking ahead in an environment where interest rate cuts in capital market revitalization are expected, Woori Financial Group will work to uncover new business opportunities to expand related noninterest income. Also, as of early July, the group completed the insurance company acquisition and with a now diversified nonbank portfolio, we will aim to maximize synergies within the group and continue the growth of noninterest income. Next, I will speak about expenses and please refer to Page 5. Moving on to the group's SG&A expense. For the first half of 2025, the group's SG&A expense was KRW 2479.1 billion, representing an 18% increase Y-o-Y. The resulting cost-to-income ratio stands at 42.8%. This increase was mainly due to one-off factors such as early retirement costs at the bank earlier this year, investments to enhance the last year's newly launched securities business, expenses related to ordinary wage settlements finalized at the end of last year and expanded group-wide investment in digital and IT capabilities. Going forward, while we will continue investing in areas such as digital and IT competitiveness and enhancing the group's brand value for future growth, we will also actively pursue cost efficiency through workforce and channel optimization, process enhancement using IT and the reduction of unnecessary recurring expenses. Let's now move on to credit costs and asset quality. Credit costs for the group in the first half of 2025 stood at KRW 944.5 billion. In the second quarter, credit cost was KRW 509 billion, up 16.9% from the previous quarter, and this increase reflects a preemptive provision of KRW 86 billion related to the completion guarantee projects. During the first half, we recognized some one-off credit costs, including preemptive provisioning for completion guaranteed trust projects and additional provisions for borrowers such as [indiscernible], which have recently drawn market attention. Excluding these onetime factors, the group's credit cost ratio is being maintained at around 0.42%. Despite the downward trend in interest rates since second half of last year, concerns of an economic slowdown due to ongoing domestic and global uncertainties persist. As a result, delinquency and NPL ratios, especially in vulnerable industries continue to rise, Woori Financial Group is working to ensure a self-lending for high-risk assets and is thoroughly managing sectors of concerned and vulnerable borrowers. Through these more proactive risk management efforts than ever before, it is maintaining the proportion of prime corporate loans at around 85% and the proportion of loan loss reserves and regulatory reserves to total credit is also being managed at an elevated level of 1.6%, ensuring the group's ability to absorb potential losses in a stable manner. Furthermore, considering the government's strong commitment to economic stimulus, reflected in active supplementary budget planning and the likelihood that the low interest rate trend will continue for the time being, we expect credit cost to gradually stabilize from the third quarter onwards. Next is on capital adequacy and shareholder return policy. Please refer to Page 6 of the materials. As of the end of June 2025, the group's common equity Tier 1 ratio stood at as mentioned, at a preliminary 12.76%, showing a significant improvement of approximately 60 basis points from last year-end. This result reflects not only favorable external conditions such as weaker exchange rate, but also the group's continued group-wide efforts to rebalance assets and proactively manage risk-weighted assets along with solid earnings growth. Given the continued potential for volatility in interest exchange rates in the second half and the possibility of changes in regulatory capital requirements, the group will not be complacent and will do its utmost to achieve a stable CET1 ratio of over 12.5% for 2025 and reach the market expected level of 13% as early as possible. Through this enhancement and capital ratio, we aim to enhance our ability to absorb losses while also expanding shareholder returns based on the strengthened CET1 ratio. In line with our dividend policy to distribute 50% of the previous year's annual dividend evenly on a quarterly basis, the Board of Directors today approved a quarterly dividend of KRW 200 per share. As previously announced, the record date will be August 10. In the first half of 2025 despite rising domestic and global uncertainties, Woori Financial Group demonstrated strong profit generation and solid cost control capabilities. Notably, the significant improvement in our capital ratio boosted confidence in our ability to meet CET1 targets and expand shareholder returns, thereby strengthening market trust. With the completion of the insurance company acquisition, the group's portfolio is fully established, we will now take concrete steps toward becoming an integrated financial services company by pursuing balanced growth between banking and nonbanking businesses and maximizing synergies across affiliates. Furthermore, the group will continue to increase financial support for productive setters and actively promote inclusive finance for small business owners and financially vulnerable groups. This concludes with Woori Financial Group's earnings for the first half of 2025. Thank you.

[Operator Instructions] The first question today will be from NH Securities, Jun-Sup Jung.

I am Jun-Sup Jung from NH Securities. So there are 2 questions that I would like to ask you. The first question is related to what you have talked about before, which would be the acquisition of the insurance arm. So in terms of your direction going forward and strategy, this is something that I am very curious about. So it might not be an urgent issue, but you have acquired 2 companies. And there are some interest about whether you will merge the 2 entities or maybe delist the listed entity. So with regards to these issues, have you made any decisions? Or are there any consideration or options that you are reviewing? In addition to that, if there are any capital gains from the acquisition, how much do you believe that, that would represent in terms of value? The second question that I would like to ask you is in terms of your capital ratio and also TSR. So your CET1 ratio has improved a lot. And also with regards to what you have said, you all have also said that you were trying to achieve 13% as early as possible. So does this mean that the year-end target would be 13%? Because according to what level of the CET1 ratio sits at, then the TSR could differ. So if you achieved 13% at the end of the year, then is there any possibility that we could look forward to additional TSR measures such as purchasing treasury shares?

So for the 2 questions that you have asked, thank you very much. Maybe we can prepare a second and then address your questions. Yes. Thank you for the question. So I think that with regards to the acquisition of the insurance arm, I do think that it's a very comprehensive question touching upon a lot of different issues. So maybe I can give you a brief question. I do think that this is a topic of interest for many. So maybe we can share what we're thinking about right now and also in terms of the direction going forward. So I do think that it might be a lengthy answer. So that have been said, with regards to the insurance acquisition right now, in August of last year, we did sign the FDA. And then of May this year from the FFC, we did receive the approval to include it as a subsidiary. So as of July 1, we have completed the inclusion. So, with regards to the strategy going forward for the insurance arm, I think that basically, what we can say is that we are going to focus on sound capital management to ensure that we are able to have a stable marketing fundamentals to ensure that we can have sustainable growth. So in the short term, we're currently doing a business assessment. And after this is completed, we will be actually looking at the K- ICS ratio and also the improvements that would be necessary for the capital adequacy and also the key agenda items to strengthen the fundamental competitiveness of the arms. So this is something that we are going to do to fundamentally improve the business. So right now, in terms of the K-ICS ratio and also in terms of securing the capabilities, that would be the short term. Over the longer term, we're looking at the customer channels, also asset management and operations to generate more profit generation and also with regards to the K-ICS ratio and the new CSM, to improve the competitive edge so that we can have group synergies in new business areas. So doing a business assessment, we are going to look at how much K-ICS ratio improvement is necessary and also looking at where our business expansion efforts will need to be made. In addition to that, if we look at the impact on the overall capital ratio, so July 1 was the date in which we included it. And right now, we're in the purchase price allocation process. So right now, the PPA process is in place. So as of now, it is difficult to estimate what the impact would be because there are various variables that are related to this issue. So as of the end of July -- June, rather, once we do have a definitive PPA, then we can talk about what the impact would be. And I do think that this would be something that would be available when we do our Q3 earnings conference call. So I do think that it is something that we would be able to announce there. So if you look at CET1 ratio as of the end of June, it's 12.7%. And of course, we do think that there will be some impact from the acquisition of the Insurance business. So taking this into consideration, we will try to make sure that it's managed at an appropriate level. And in addition to that, I think that whether we would merge it or have it as a full subsidiary, so in the news recently, I do think that there has been some discussion about this and July 1, we did include Tongyang and ABL as subsidiaries of the group. And since then, I do think that, as mentioned before, we're initially doing the business assessment first. So with regards to the merger of the 2 entities within the group right now, we haven't decided anything yet or have made any reviews of such a situation. So I think that going forward, whether it will be merged or whether we will have 100%-owned subsidiaries. These are all options that we will be looking at in the future. And as we decide, we will make sure to communicate with the market. So, with regards to the insurance side, I think that I've covered all of the topics. And then around the target of 13%. In the second half of the year, I do think that there are a lot of volatility. So, if we look at what areas there could be, there could be the FX volatility and also with regards to government regulations, there could be some changes. So in the end of 2025, if you look at the CET1 ratio, stably managing at 12.5% would be the target. So what we mean by stably managing 12.5% is meaning that we do want to overachieve this target. So that's how you should interpret it. And in the beginning, when we talked about 13%, what this is, is that by 2027, this was the target that we had, and this is something that we mentioned before. I think that after we acquired the insurance arm, this was something that was known and we are currently doing a lot of asset rebalancing and we're also looking at all of our risk-rated assets. So as of the current situation, because there are FX volatilities and other issues -- so versus our initial plans, we do think that there may be a possibility that we could achieve it earlier than expected. So we're trying to look at the measures that would enable us to do so. And if we do so in the second half, take into consideration the changes, we do think that at the end of 2025, during the conference call that we do in February, I do think that we can take a comprehensive assessment and then talk about the way going forward in terms of the more details to the areas that you would have interest in. Thank you very much.

Next question is Yong Jin Seol of SK Securities.

So, I do want to understand the MTS service, some updates on -- from the -- your brokerage business. I know that we have fierce competition in that domain. So that to understand what were the performance achievements and also what's the future time schedule as to -- are you looking into scaling or making inroads into specific markets?

I'm Il-Jin Oak the CTO. With regard to the MTS, it was launched at the end of June or rather it was the end of March. And for 3 months, we've opened 20 new accounts. And we are opening the services one by one. And in April, we had OTC funds and 1 RP and Universal Banking in June. Within one banking, we do have one bank -- we do have the MTS [indiscernible] banking, so for Wealth Management or AI-based investment insights, or user-based interfaces are some of the differentiators that we do offer. And in September, we do have a new integrated MTS and an ATS market to open. And in December, within Universal Banking, so for overseas stocks trading service that will also be embedded into the system. And within Universal Banking, MTS has been seeing some new climate clients coming in, so I can say that it is effective in terms of attracting clients. And also with regard to Woody Investment Securities, if I may share with you the strategy that we have for our brokerage arm. So, we have IB and digital capabilities, and we're actually focusing on enhancing our competitiveness. So we're putting together the system and we do have the human resources right now, and we're continuing to complement the systems and the facilities and we are continuing to expand on our sales organization. And we are, of course, actively managing risk assets. But with regard to securities and especially when it comes to risk assets, I do want to mention that we are actually engaging in a very aggressive allocation of assets, and we're trying to actively engage in deal structuring and referrals and moving on from corporate finance to asset management, basically providing a one-stop financial service is what we do want to offer. So compared to the first quarter, in the second quarter in terms of operating income, in terms of overall performance, of course, we're seeing SG&A going in. However, we're seeing the ratio improving going forward. So we are scaling and in the future, Woori Investment Securities, especially in the nonbanking business, we think that's going to play a pivotal role. And we consider the IT systems and so forth. Next year is going to be completely different. We do believe that it's going to be a different story going forward with more contributions coming from Woori Investment Securities.

The next question will come from KS, Doosan Baek.

This is Doosan Baek from KIS. So I would like to ask you a question about stable coins. So in July, or June, there was the framework act on digital assets. And I do think that there will be additional proposals that will be submitted next week. So in terms of the legalization, it does seem to be that it is gaining speed. So with regards to stable coins, what is your approach? What would be -- how are you going to address this opportunity?

Thank you very much, and let us address your question. So this is the CTO. So for stable coin, I do think that as of now in terms of the legal framework, it is something that is still in process. So we're looking at what's the overall trends are. So in terms of the qualifications for issuers, it's still a bit uncertain. So we're still something that we're monitoring very closely. And as of now, the bank level, of course, we are looking at the OBDIA. So we are looking at a joint issuance with the OBDIA other members. And related to that, in terms of our business model, infrastructure, establishing and also our business model is something that we are currently looking at. Thank you.

Next question from Do Ha Kim from Hanwa Investment & Securities.

I have a question with regard to Loan portfolio and margins. And could you provide us with the guidance with regard to the targets that you have for the second half? And the next question has to do with Insurance. As was already mentioned, I can see that you're currently reviewing the current status, and I know that it's a bit hasty to provide us with a detailed response. However, if we look at the Insurance, there are, of course, consider with regard to the capital ratio of the company. And so we would like to understand and rest assured that we don't have to go to the point of capital increase. So if you look at the total capital ratio, there is the basic ratio and there are regulations. So with regard to that, and we're seeing some stricter regulations on the basic capital ratio. So we would like to understand if you can maybe lay out some of the measures that you have that you can actually cover for that without a capital increase. So it could be a very rough plan, but if you can share that with us, I think that we would rest assured. So with regard to this, is there anything that you can add, please?

Yes, first on margin. The NIM of the second quarter was 1.4%, and it was increased by 1 bps -- 1 bp. And as mentioned, the market rates did go down the loan interest rates went down. However, with asset rebalancing as well as, increase of core fee income, we were able to see an increase of 1 bp in terms of NIM. But what this really has to do with our asset growth. And I will be giving you some more information on this. But this year, it was on managing risk assets -- risk-weighted assets. And it was about managing this below nominal GDP and we're very much focused on asset quality. So in the second half, it will be similar, more or less the same at 1.4%. Of course, there will be a further reduction in rates, but we don't think that it's going to be higher than the 1.4%. So it would be more or less in the early end of 1.4% in the second half as well, mid- to low level. And then in the case of assets, in terms of RoRWA, we've been actively managing the risk assets and especially in the second half, there are tariffs, there's also FX fluctuations. And at the end of June, it was dipping down and it's been slightly going up. So there are a lot of volatility right now. So with regard to assets because we're going to continue on to manage this. So we will be focusing on asset growth. But once again, we do have nominal growth in the case, some retail loans were household -- it's true that there is active government policy in place, and we're going to take that in mind in terms of our active management. In terms of corporate loans, in terms of risk assets. That's how we will manage, how we will be engaging in asset rebalancing so that we can focus on small business owners as well as future growth industries. And with regard to your last question, it has to do with the insurance firm on the possibility of a capital increase. So if you look at the K-ICS ratio at the end of June, there are no disclosures with regard to insurers. But based on what we know, there's 150% guidance and it has already exceeded this guidance of 150% and in the future in terms of understanding the management status and also in putting together the mid- to long-term plan, the premise and the critical factor would be on maintaining the K-ICS ratio. So in the second half, in the KPI for both companies, the basic K-ICS ratio and capital adequacy would be a key agenda item going forward to manage. So in many aspects, right now in the current state, the K-ICS ratio -- and if we look into other indicators, we do assess that a capital increase would not be required, and we would have to engage in mid- to long-term assessment, and we have to plan out going forward. But at this point in time, we do believe that a capital increase is not required. And in the future in the mid- to long run in order to minimize any burden on the group, that would be the focus in terms of how we do manage the subsidiaries. And once again, we will have to engage in an accurate management assessment, and it's going to take around 2 to 3 months. So in the mid- to long run, in terms of what kind of the effect it will have on the group, we will, of course, make sure that it is well minimized going forward. Thank you.

The next question will be from Daishin Securities, Hye-jin Park.

I would like to ask about credit costs. So if we look at the credit cost trend in the first half, it continues to be a wait on the operations. So of course, there were some one-off issues like the completion guarantee trust. But in terms of the normalized level, it does seem to be that there seems to be an increase. So for the full year for the CCR guidance, how -- what would the level be for our expectations? If you could share that number, that would be appreciated.

So this is the CRO, Jang-Geun Park. So if we look at the second quarter, it was 49 basis points. So it was a 3 basis point increase at the group level. And of course, if we -- there was KRW 86 billion in one-off preliminary provisions for the credit guarantee Trust. If we exclude that amount, it's actually at 42 basis points. So it's a very stable level. However, in terms of the normal level of credit cost, it is trending up. And going forward, right now, there are ongoing asset rebalancing. We're focusing on the lower risk prime assets. So right now, the portfolio transitions that we have made will come into effect in the second half. And also from June, we have an asset quality TFT that we are operating at the bank level and if all of those measures are put in place, then from the second half of the year, we do think that there will be improvements that we will be able to see. So as a result for our 2025, if we look at CCR, at the beginning of the year, we said it was around low to mid-40%, and we do think that we will be able to manage it at that level for the full year.

Currently, we do not have a queue right now. So we have received questions in advance via our website. So let us cover these questions. So before the earnings presentation, we have been receiving questions via our website. And with regard to frequently questions during the conference call, we did announce that we will be addressing them if and when possible. With regard to shareholder return and the insurer acquisition and for the first time, there are also questions that came in on the stable coin. And most of the questions have been covered. But one question also had to do with the scheduling of the treasury share cancellation. So we would like to ask the CFO to respond to this question.

Yes, I am Sung-Wook Lee. So with regard to the scheduling of the share cancellation, in 2023, ever since we became a holding company, we've engaged in cancellation of KRW 100 billion and KRW 136.7 billion and KRW 150 billion. So every year, we have been engaged in cancellation for the 3 years. So we have engaged in the share buyback and now in September 11, the trust contract is to be concluded. And then after that, we will be canceling the entire shares. And then with regard to share buyback and calculation, after the KRW 150 billion cancellation, we will take into consideration CET1 ratio as well as the financial environment and conditions and then decide on how we will go ahead with it. Thank you.

Yes. There does not seem to be any more questions. So we would like to wrap up the Q&A here. So if you do have any questions, please do not hesitate to contact the IR team. We will make sure to answer any questions you may have. So with this, we would like to wrap up the Q&A session and also the first half 2025 Earnings Conference Call for Woori Financial Group. Thank you for your attention.

Good afternoon. I am Hong Sung Han, Head of IR at Woori Financial Group. Let me first begin by thanking everyone for taking time to participate in this earnings call for Woori Financial Group. On today's call, we have Group CFO, Lee Sung-Wook; Group CDO, Ouk Il Jin; and Group CRO, Park Jang-Geun. On today's call, the Group CFO, Lee Sung-Wook, will give a presentation on the earnings performance, after which we will have a Q&A session. Please note that the earnings call is being conducted with simultaneous interpretation for our overseas investors. Now let us start our presentation on Woori Financial Group's earnings for the first quarter of 2025.

Good afternoon. This is Lee Sung-Wook, the CFO of Woori Financial Group. Let me go over the first quarter performance for 2025. Please turn to Page 3 of the presentation material that has been disclosed on our website. First, let me talk about net income. In the first quarter of 2025, Woori Financial Group's net income was KRW 615.6 billion. Amid uncertainties in Korea and abroad, leading to volatility in the financial markets, we were still able to prove our solid revenue-generating capabilities on the top line. However, on the cost side, due to conservative provisioning due to concerns about future downturns in the economy and non-regular items such as costs related to the ERP conducted at the beginning of the year and investments for future growth resulted in net income coming in below market expectations. When excluding these one-off costs, the group's fundamentals are still solid, and the group's ROE is 9.5%. Next, let me discuss the group's net operating revenue. First quarter net operating revenue increased 2.4% Y-o-Y and 6.6% quarter-over-quarter to KRW 2,609.5 billion. To optimize our portfolio, the group has been rebalancing assets and engaging in efforts to improving profitability from last year, which has resulted in solid interest income. Efforts to strengthen noninterest businesses and diversify revenue sources across all bank and nonbank affiliates within the group resulted in stable growth in noninterest income driven by core fee income. Next, let me go over the credit cost. Credit cost was KRW 435.5 billion, representing a Y-o-Y increase of 18.8%. Issues such as [Indiscernible] and uncertainties about the Korean economy created a challenging internal/external business environment, which has led to higher delinquency and NPL ratios. However, we are monitoring the market more closely and have been taking preemptive measures such as actively managing high risk and potential distressed assets to manage credit cost at a stable level. The credit cost ratio was 0.46% but when excluding one-off additional provisions of KRW 63 billion, the normal credit cost ratio is 0.39%. Next, let me discuss the capital ratios and also quarterly dividends. As of the March end, the group's preliminary CET1 ratio is 12.42%, which is a 30 basis point increase from the end of last year. Amid an unfavorable business environment such as a week 1, our company-wide efforts from last year to rebalance assets to actively manage our risk-weighted assets has improved our capital ratio. This is an example of the strong commitment that the group has to achieve a 12.5% CET1 ratio within the year, and we are focusing all group capabilities to achieve this goal. In addition, at the BOD today, the Board decided on a Q1 dividend of KRW 200 per share, which represents an 11% increase on a Y-o-Y basis. In addition, the dividend record date will be May 10 as notified during the group's quarterly dividend procedures adopted in the General Shareholders' Meeting. Next, let me delve into more detail about our earnings by area. Please turn to Page 4. First, let me go over our net operating revenue and NIM. The group's Q1 net operating revenue was KRW 2,609.5 billion, up by 6.6% quarter-over-quarter. Interest income was similar to that of the previous quarter at KRW 252 billion. The bank's quarter 1 NIM was 1.44% and the group's NIM, including the credit card business was 1.70%, which represents an increase of 4 basis points from the previous quarter. The BOK cut rates last February and market rate spread leading to a decrease in funding cost as cost on time deposits stabilized and core deposits grew. This improved our margins. In addition, we also believe that the U.S. reciprocal tariffs are expected to create trade disputes and a downturn in the economy, and we believe the current cut rate cycle will continue, and we are trying to have more asset management to put out an efforts to grow our core deposits to actively defend any downward pressure on NIM. Next, let me discuss the bank's loan portfolio. As of March end, Woori Banks totaled KRW 330 trillion, showing a slight 1% decrease versus the end of the year. For corporate loans, large corporates continue to have strong demand for credit and the portfolio improved, focused on high-quality SMEs resulting in a book of 183%. On the retail loans, the government's household debt management policy continued and retail loans totaled KRW 144 trillion, similar to the end of last year. Going forward, in line with the economic development, we will diligently fulfill its role and focus on new growth industries and secured loans backed by guaranteed certificates. In addition, for retail loans, we will focus on real demand with the scope within our business plan and achieve growth within nominal GDP growth. Recognizing uncertainties in Korea and abroad, we will put top priority on asset soundness and capital adequacy to achieve profitable growth. Next is the net interest income. Net interest income in first quarter was KRW 357.5 billion, an increase of 2% Y-o-Y. In particular, core fee income posted KRW 511.4 billion, driven by the growth of the bank's wealth management efforts and the efforts to diversify. Core fee income surpassed KRW 500 billion mark, again showing stable trends. As we expect volatility in the markets to continue, we will continue efforts to increase our noninterest income by diversifying our nonbank business and maximizing synergies between banks and nonbank operations. Next, let us move on to expenses. Please look at Page 5. This is the group's SG&A. In the first quarter, the SG&A was KRW 1,306.2 billion, which was an increase of 26.6% Y-o-Y and the cost-income ratio was 43.6%. The increase was driven by one-off factors, including Woori Bank's early retirement program cost of KRW 169 billion, which took place at the beginning of the year and costs related to increasing the sales capabilities of the securities arm launched last year and investments in digital and IT, such as UN Banking and Woori Securities Mobile Trading System. Going forward, the group will continue to actively support investments for future growth, such as strengthening digital and IT competitiveness and enhancing the brand value of the group. But at the same time, it will cut back on general expenses that are not related to sales and achieve cost efficiencies across the organization, such as optimizing resources and channel. Next is credit cost and asset quality. In the first quarter of 2025, the group's credit cost amounted to KRW 435.5 billion, down 5.8% Q-o-Q and up 18.8% year-on-year. This quarter, the group completed provisioning for the full exposure to issues currently in the spotlight, including those to debtors who have recently filed for corporate rehabilitation by allocating approximately KRW 39 billion in additional provisions, and we also booked preemptive provisions of KRW 24 billion during the review of completion guarantee trust projects, resulting in approximately KRW 63 billion in one-off credit costs. Excluding these one-off factors, the group's credit cost ratio is being stably managed at around 0.39%. Although market interest rates are on a downward trend, concerns over economic recession are intensifying due to various internal and external issues, so asset quality concerns are expected to persist for some time. Woori Financial Group is maintaining a strong ratio of prime corporate loan assets at 86% through enhanced risk management capabilities. Furthermore, the ratio of loan loss and regulatory reserves to total loans is also being managed at an elevated 1.6% level, ensuring sufficient loss absorption capacity. As for real estate PF exposure, it has decreased by approximately KRW 200 billion from the previous quarter to KRW 3.3 trillion excluding guarantees, it stands at approximately KRW 2 trillion, which is 0.5% of total loans and thanks to our preemptive management efforts, the additional provision burden remains limited. Woori Financial Group will remain fully prepared for potential impacts from prolonged high exchange rates and U.S. reciprocal tariff policies. We will proactively inspect risk factors across the group, focusing on managing vulnerable areas and closely monitor key market variables like interest rates and exchange rates responding actively to changes. Moving on, I will elaborate on the capital adequacy and shareholder return policies. Please refer to Page 6 of the materials. As of the end of March 2025, the group's preliminary CET1 ratio stands at 12.42%, improved by approximately 30 basis points from 12.13% at the end of the previous year. Despite the challenging financial environment, the group significantly improved its capital ratio through comprehensive measures, including solid profit growth, optimal portfolio composition, taking into account risk-weighted assets and thorough management of exchange rate-sensitive assets such as foreign currency holdings and currency derivatives. With this, Woori Financial Group is approaching its goal of achieving a 12.5% CET1 ratio ahead of schedule in 2025, making progress not only in enhancing the group's loss absorption capacity, but also in establishing a stable foundation for shareholder returns. Meanwhile, today, Woori Financial Group's Board of Directors resolved a quarterly dividend of KRW 200 per share in line with the company's quarterly dividend policy of paying out 50% of the previous year's annual dividend evenly across each quarter and the record date under our enhanced quarterly dividend procedure is set for May 10. The group also announced at the beginning of the year a share buyback and cancellation program totaling KRW 150 billion, an increase of 10% compared to the previous year and is currently in the process of executing the buyback. Going forward, the group will continue to faithfully implement its shareholder return policy based on its -- on the CET1 ratio and do its utmost to fulfill its commitments to the market. Let's move on to Page 7. To prepare for the large-scale and prolonged impact of macroeconomic uncertainty and market volatility arising from recent developments such as the imposition of reciprocal tariffs by the U.S., Woori Financial Group has formed a group-wide TFT. Through this task force, we aim to respond swiftly to market conditions and ensure thorough risk management. Please refer to the materials on Page 7. Woori Financial will conduct in depth analysis of tariff impacts by industry and sector as well as overall market conditions. And based on this, we'll continue to carry out asset rebalancing in response to changes in the financial environment. We will restructure our portfolio to focus on high-quality assets and emerging growth industries while reducing low margin or potentially distressed loans to improve both profitability and asset soundness. In addition, the group is operating a group level of reciprocal tariffs impact support TFT, providing customized support to companies affected by tariffs and preparing support measures for small businesses vulnerable to high exchange rates and economic downturns. By stabilizing the financial market and protecting customers, we aim to minimize the shocks from reciprocal tariffs. With the possibility of prolonged high exchange rates and market volatility in mind, we will strengthen our foreign currency liquidity management and enhance credit risk controls for affected industries and high-risk assets to actively respond to economic downturns. We will especially maintain constant monitoring of risk by country where the group operates to prevent overseas shocks from spilling over into domestic markets. Regarding capital ratios, we will focus on improving RWA vulnerabilities through asset rebalancing and strengthen our management of exchange rate sensitive assets by reducing exposure to currency derivatives and overseas FRMS. Alongside asset rebalancing and risk management to maintain a solid financial structure, Woori Financial Group also places great importance on business diversification to provide profit growth and improve stability. Woori Investment Securities obtained its official brokerage license in March and launched its MTS platform, completing preparations for full-scale operations. Furthermore, the relocation of all IB units within the group to Yeouido will further boost synergy. In terms of entering the insurance business, which has drawn significant investor attention, we submitted an application for subsidiary acquisition approval this past January, and it is currently under review by the Financial Services Commission. Upon completion of the acquisition, although the final financial impact may vary, we expect minimal effect on the group's capital ratio and anticipate annual profit increases of KRW 300 billion to KRW 400 billion and approximately a 1 percentage point improvement in ROE. Through these comprehensive response plans, Woori Financial Group will faithfully fulfill its core financial role, thereby contributing to market stabilization and ensuring strong customer protection. We will also continue to enhance our CET1 ratio to further strengthen the group's loss absorption capacity and establish a solid foundation for stable shareholder returns. This quarter, despite internal and external uncertainties, Woori Financial Group has demonstrated solid earnings capacity and stable risk management capabilities. We will actively respond to the challenging financial environment, including interest rates, exchange rates and the real economy by further focusing on the -- on managing our capital ratio and enhancing long-term corporate value and in addition, we will take the lead in supporting struggling businesses fulfilling our social responsibility as a financial group. And this concludes Woori Financial Group's 2025 Q1 earnings presentation.

[Operator Instructions] The first question will be from SK Securities, Seol Yong Jin.

I would like to ask you some questions about your capital policy. So if you look at the situation right now, of course, you do have a license for the securities business, and you also said that you are going to continue to expand this business. So in terms of your RWA allocation and capital allocation, I actually do have some concerns. So on the bank side, I do think that there are continuous asset rebalancing efforts. And as a result of that, your capital ratio is declining. So between the banks and nonbanks, you do need to have balanced growth. But in terms of your capital allocation policy, what would be the details of that going forward in terms of strategy?

Yes. Thank you for your question. And if you let us prepare for a few seconds. Yes. Thank you for your question. Right now, as you have just mentioned, right now, the high exchange rate is continuously something that is continuing. So of course, across the bank and nonbanks, we continue to engage on asset rebalancing. So on the bank side, that means that for lower margin assets and also for possible distressed assets or if there is a downturn in the economy, any assets that could possibly become insolvent is something that we want to preemptively act upon to try to decrease. And going forward, we want to focus on growth potential -- high-growth potential company so that we can improve our overall capital ratio. So particularly on the nonbank side, on the capital company and also on the nonbank-related credit card business, right now on the RWA, we try to increase the areas in which there's more contribution and decrease on the ones that are less. Well, as a result of that, we are focusing on achieving our capital target. And for the securities arm, we actually started on August 1. And right now, we have received licenses for most business areas. So as a result of that, for the risk assets, we are investing. And of course, for the risk weight allocation that we have, we want to focus on the securities side. So whether it be on the bank side or the nonbank other securities arms, we want to decrease that, and we want to increase the securities presence, our market share and continue our marketing activities. So with regards to our capital, we are trying to focus it more on the securities side to grow that business. And between the bank and securities arm and other affiliates that we have, we want to across the board, reach the 12.5% CET1 ratio target that we have. So that would be the efforts there. We'll receive the next question. The next question is from Baek Doosan from Korea Investment & Securities.

Yes, I'm Baek Doosan from KIS. I do have a question with regard to the digital business. So starting from last year, you had UN Banking and Securities MTS and in various areas, you have been executing various investments. And with regard to that, I would like to understand the performance of these investments, whether it be MAU or transaction volume. So some information on that. And what is your goal and target going forward? If you can also share with us your plans?

Yes. Thank you very much for that question. Please bear with us for just a moment. Yes, I'm [Indiscernible]. Last year, we've launched the new loan banking, and we've opened our super app of the group. And as of the end of last year, the MAU was 8.5 million, and we want to bring this up to 9 million by this year. And also a key target that we have is that through the super app, we want to enable universal banking services across the group to increase the number of subscriber members. And currently, card and within the first half, the securities arm will also join the super app. And through this comprehensive platform, we want to continue on to attract new customers. And it's been just a couple of months since the kickoff, so we cannot say for sure. However, we can say that new customers have been coming in through this comprehensive platform. And not only in terms of client acquisition, but also through profitability, we are going to also launch financial products via this comprehensive platform within the year.

The next question will come from Mirae Asset Securities. It will be Jeong Tae Joon.

Hello from Mira Asset Securities. Can you hear me well? Yes. This is Jeong Tae Joon. I would like to ask some questions about your capital ratio. Before you talked about -- if you acquire the life insurers, then I do think that you try to minimize the impact on your capital ratio and increase your profits. If you look at the recent situation, it does seem to be that the capital ratios for the life insurance are decreasing. So I do think that the impact that you foresee may be larger than expected. So in terms of your impact on the capital ratio side, how much do you actually see from the acquisition of the life insurance arm?

So thank you for your question. And for the answer, if we can prepare for a second. Yes. On the capital ratio side and the impact that we see, if we look at as of now in terms of the acquisition timing and in terms of the asset and liability valuation has to be finalized for us to go through. So as of now, it would be difficult to give you an accurate decision, but we don't believe that there will be a large impact. Right now, if you look at the investment limits that we have, and look at other insurers disclosed financials, we don't believe that there will be a large impact. So we're basing this upon the financials that we have available already. And going forward, in terms of the discount rate decreasing or any other issues, of course, that could have some implications, but that has not been finalized yet. So as a result, to minimize the impact as much as possible in the past, we looked at the rate cuts that took place and the stronger regulations. So with regards to the capital adequacy and solvency management at the insurance company level, this is something that we are well aware of. And it's difficult because we're still in the approval process. But once it is included and acquired, then on both sides, of course, the capital ratios will be managed at a very prudent manner. So we are going to grow them on a very strong base. And on the K-ICS ratio and other financial soundness metrics, that would be our first priority to make it -- ensure that we grow on a stable footing. So whether it be at the group level or the company level, we try to minimize the capital burden that we will have, and that will be the overall direction in which we will pursue this business. We'll move on to the next question. The next question will be by Kim Do Ha from Hanwha Investment & Securities.

I have two questions. The first question has to do with the performance, the other RWA. So with regard to the holding company, the group, if we look at the credit cost ratio, although we do understand that the proportion of the bank is high, overall, in absolute amount, it's not -- in terms -- relatively, the level is quite higher than other peers and other banks. So in the late 2010 and during the COVID years, that wasn't the case. However, starting from 2 years back and last year, I can see that compared to your peers, the credit cost ratio seems to be higher. So with regard to the CCR, what is the awareness within the group? And based on that awareness, what kind of improvement plans or measures do you have in mind? And I think that, that would help us understand future performance. And with regard to RWA, you can see that by KRW 10 by [Indiscernible] or could be by increase of RWA. So could you give us an update with regard to any changes, especially considering ForEx fluctuations?

Yes. Thank you very much for the question. Please wait for a moment. Yes, with regard to RWA and sensitivity to exchange rates. So with regard to exchange rate sensitivity, there are 2 aspects. So in the case of risk assets, it, of course, will increase. And also in terms of the capital that's invested overseas, we do have some changes in the foreign translation. So it actually works the other way. And depending on the timing, it will differ. And as of the end of last year, we've seen 1.6 bp around when it comes to risk assets. And this 1.6 bps may change. It doesn't remain constant. So the current impact is about 1.6 bps by 10, and that is all.

I am the CRO, Park Jang-Geun. So if we exclude our one-off costs, credit cost is at 39 bps, and it's at a stable level. But as you've mentioned, compared to the past, it does seem higher than usual. And as was already mentioned, we have to do with the one-off factors. So we have debtors for corporate rehabilitation, including Home Plus and additional provisioning. And also, we've been -- and we haven't been active in the write-off sphere. So that's why that has had an impact. And in the case of the CCR for 2025, of course, it's before the interest rate impact is reflected, we believe that still there will be some continued insolvencies that will have an impact. And with regard to the completion guarantee projects and with the low growth situations, we believe that the CCR will be maintained at similar levels as what we see right now. But as I have already mentioned, asset rebalancing, in other words, focusing on low-risk prime assets, the virtuous cycle of asset rebalancing once we do complete that, we believe that in real estate PF, we have an abundant buffer in terms of provisioning. So with regard to this credit cost management with our active measures, we think that in the second half, it's going to improve. So the credit cost ratio of 2025 would probably be in the early mid-end of 40 bps.

So the next question will come from Daishin Securities. It will be Park Hye-jin.

I do have two questions about your securities business. One is for Woori's Investment Securities. You did receive a license for securities trading. And I do think that you might start your ID business. So I do think that your risk-weighted assets is something that you will have to look at. So in the case of your Woori Investment Securities, how are you going to engage upon your ID business? And if you want to be aggressive in that area, we do think that there will have to be some more strategies that you engage upon. So what would that be is the question?

Yes. Thank you for your question. And maybe let me have some time to answer. Yes, maybe I can answer your question. This is the CFO, Lee Sung-Wook. So for Woori Investment Securities right now and to talk about the strategy that we have for that business. So if you look at the current situation, this company is actually very balanced in terms of its IB presence and digital. So we do want to strengthen its fundamental competitiveness. So IB and sales trading is something that we want to create an organization for us and continue to expand going forward. So we are going to also utilize the bank retail network that we have to create more synergies with the group. And then by establishing MTS services, we are going to become a comprehensive securities firm. And in addition to that, on the retail side, of course, we do want to have customized channels and also more appropriate products that we can cater to. And in addition to that, on the trading side, we do want to create a stable foundation for trading. And on the IB business, we do think that we will try to focus our IB capabilities to gain a leading position. And also, we are going to look at the asset soundness and also the loan portfolio so that we can increase our portfolio. And on the DCM side and alternative asset side, that will be added on to increase the margins. So we are going to try to maximize the synergies at the group level as much as possible. And this is something that we are taking initiatives on. And so for the IB business, you talked about a capital increase. So at the end of last year, we actually did a KRW 500 billion capital increase already. So for the investment service business, right now, they do have a comprehensive securities license. So as a result of that, they are able to issue CPs and also other types of commercial paper. So through that business in itself, as a mid- to large-sized securities firm, we do think that it has its own funding capabilities. So over the mid- to long term, of course, there will be capital increases that will be required so that we can become to the size of a mid- to large-sized company. But as of now, we don't think that there will be any short-term requirements for any capital increases as of the current time. So again, we did do one in previously of around KRW 500 billion. And going forward, if there are more needs for capital increases, then we will try to do so.

Next question will be by Woo Do-hyung from Yuanta Securities.

I have two questions. So with regard to the annual process for NIM and the trending, your prospects. And second has to do with the Budget Telecom service. What is the expected results on the plans that you have for the Budget Telecom service?

Yes. Thank you very much for the question. Please bear with us for just a moment. Yes. With regard to NIM, in the first quarter, things was NIM 1.4%, increased by 4 bps Q-o-Q. And with the increase of core assets and funding costs have decreased, and that has had an impact on NIM. And all in all, managing risk assets and with our active asset rebalancing, we believe that there is a lot of room to spare for -- in the funding side. And we believe that, that actually covers our NIM front. And with the rate cut by 25 bps going forward, we believe that the rates will probably be on a downward trending. And if you look at the long rates, it has already been quite subdued and contracted. And based on our simulation, we believe that it will probably not be extremely lower than the simulation that we have for NIM. And in the second half, we will continue on with active asset rebalancing. So we believe that the burden or the stress with regard to funding would not be that significant. So we will be increasing, let's say, our core assets. And then if so, NIM would be 1.4% plus on an annual basis. And we -- even if the rate does go down, we'll do our best efforts to make sure that it's maintained at such level.

Yes, I'm in charge of digital. With regard to the budget telecom service, we opened this last week. And with regard to the service, what we are pursuing is the following. So through our noncontact channels or our digital channels, it's about bringing new customers on board and making them financial customers. So it has to do with customer acquisition, especially for these telecom service customers, 60% are those in their 20s and 30s. And we believe that this will help us strengthen our customer pipeline there. And also amongst our existing customers, it's about increasing the activation of these existing customers. And in order to achieve these goals, as a strategy within when banking, the Budget Telecom service with this added on, we will have existing customers actually use this in a seamless fashion. And it's also about increasing the activation of existing customers. And also in terms of telecom and finance, there will be various bundled services that would provide differentiation. And starting from May, we will have savings deposits that link with telecom services, and we think that this will help us differentiate ourselves in the market. And as a bank, we do have the brand power and high level of security and the trust coming from our customers. And under reasonable prices, we do believe that there's a lot that we can actually provide to our customers.

Yes. The next question will come from HSBC, Won Jaewoong.

There are two questions that I would like to ask you. First is that you did your ERP recently. And going forward in terms of the ERP costs, is it something that you will continue to recognize in the first quarter? Would that be appropriate to assume? So that is something that I wanted to ask. And then second is that for the CET1 ratio management, I do think that you are very successful this year and the yearly target is 12.5%. But in some manners, you did say that you think that you would be able to be much over that. So right now, you're looking at an increase of around 4% to 5% in growth. But this year, this quarter, it was minus growth. So by the end of the year, even if we do have 4% to 5%, do you think that you will still be able to overshoot the 12.5% target? Or if the loan growth is higher, then do you think that 12.5% would be the level at where you would be? So how do you think things will develop going forward?

Thank you for your question. And maybe if you give us some time. Well, first, on the ERP side, I think that it is something that we did recognize in the first quarter. And for the early retirement program, of course, we do need to take into consideration financial situations and also the discussions with the unions that we have to come to a conclusion. And at the end of the day, the decision was made in January. So that's why we reflected in Q1. And whether it will take place at the end of the year or the beginning of the year is not something that we would be able to determine as of now and finalize, but it would be dependent upon internal, external environments and also dependent upon the negotiations with the labor union. So that is how we will be able to finalize the timing. Secondly, if we look at the asset over growth going forward, I think that right now for our priority, it would be to reach the CET1 target of 12.5%. So to be above that is a top priority that we have. And therefore, around 4% to 5% asset growth is, of course, dependent upon exchange rate being very stable and also to be maybe managing it tightly more towards the first half of the year so that we would have maybe possible to have further growth in the second half of the year. However, if the current turbulence that we see in the FX rate continues, then we do think that for the full year, we might have to manage it at a more tighter level. So as a result of that, 4% to 5% asset growth is something that we want to maintain as our baseline so that we can reach the 12.5% for the CET1. This is, of course, CET1 would take priority. And if the exchange rate is more stable, then for growth, I think that we will put more emphasis on that in the second half of the year. Thank you. We have no further questions in the queue. And we do have also questions that came in via our website. So let me respond to that. Starting from this quarter, we have started receiving questions prior on our website. And through this earnings call, we did mention that we will respond to the frequently asked questions. So this was already announced. And there are basically questions with regard to 2 topics. One has to do with the acquisition of the insurance business, the progress of that. And the second is the CET1 ratio, the target of Woori Financial Group and how this is to be achieved. So with regard to these 2 topics, let me now respond. So the CFO, yes, you have the floor.

So with the Tongyang and ABL acquisition, I did already mention this in the presentation. So we have submitted our approval application in January and the FSC is currently reviewing this proposal, and it's very difficult, therefore, to provide you with any information on the progress. So after the announcement by the FSC, we will actively communicate the progress with the market in a timely fashion. And with regard to CET1 ratio and how to achieve, I know that everybody is interested in this very topic and some of the information was already offered. But in 2025, our target for CET1 in 2025 is 12.5%. And the group is engaging in company-wide efforts to achieve this and through active asset rebalancing and by supporting businesses, increasing prime -- prime assets. And there are, of course, exchange rate sensitive assets such as currency assets, and we're actively managing this as well. And we have actually included in our KPI, RWA management indicators to manage this quarterly -- on a quarterly basis and an RWA system is in place so that all employees can have access so that we do have a balance between risk and return. And this balanced type of culture is what we are trying to achieve and disseminate. And based on these efforts, as was already mentioned, as of the end of April, our CET1 preemptive -- our preliminary CET1 ratio is at 12.42%, which is an increase of 30 bps, and we will continue on to manage our asset soundness, and we have the target to achieve 12.5% earlier than the schedule and be as faithful as we can in terms of shareholder return.

Yes. Because there are no more questions, I would like to wrap up the Q&A session here. And with that, we would like to wrap up the Q&A session and also the conference call for Woori Financial Group's first quarter 2025. Thank you for your attendance, and thank you very much.

And Group CRO, Park Jang-Geun, and Compliance Officer, Jeong Kyu-Hwang on the call today. So let me discuss the agenda for today's call. First, on today's call, the group CFO, Lee Sung-Wook will give a presentation on the earnings performance. And then we will move on to the Corporate Value Enhancement Plan review report. Then finally, we will have a Q&A session. Please note that the earnings call is being conducted with simultaneous interpretation for our overseas investors. Now let us start our presentation on a Woori Financial Group's earnings for the full year of 2024.

Good afternoon. This is Lee Sung-Wook, the CFO of Woori Financial Group. And let me go over the 2024 full year performance of our business. Please turn to Page 3 of the presentation material that has been disclosed on our website. First, let me discuss our net income. In 2024, Woori Financial Group net income was KRW 3,086 billion is a 23.1% increase year-over-year. Amid an uncertain environment in Korea and abroad, the group was able to profit -- improve its profit-generating capabilities and engage in active cost management to post a yearly net income exceeding KRW 3 trillion again. As a result of efforts to improve the group-wide capital allocation efficiency, the group ROE has increased 1 percentage point year-over-year. In terms of the cost/income ratio, due to efforts to improve cost efficiency, the cost/income ratio has continue improved and posted 42.8%. Next, let me discuss the net operating revenue. The net operating revenue in 2024 was -- grew 6.1% versus the previous year to record KRW 10,440.5 billion, though margins were falling due to the decline in market rates, we were able to rebalance our assets and drive solid loan growth focusing on high-quality corporates to achieve sound interest income. In addition, based on stronger marketing capabilities and synergy generation across group affiliates, our noninterest income also -- mostly driven by core fee income also posted significant growth. Next, let me go over the group's credit cost. Credit cost in 2024 was KRW 1,716. 3 billion representing a Y-o-Y decrease of 9.4%. In the fourth quarter, it was KRW 462.5 billion, posting a decline of 3.1% versus the previous quarter. Uncertainties in Korea and abroad led to downside economic risk and rates remaining higher for longer, but the company was still able to maintain the credit cost ratio at 0.45% through stable loan loss management. When excluding one-off factors, such as preemptive reserves set aside for real estate project finance and assumption changes for loan losses, the credit cost ratio is 0.41%. Across the past 2 to 3 years, the company has been very conservatively provisioning and engaged in active risk management, which has further strengthened our loan loss capabilities. And the group and bank's NPL coverage ratio has been 153% and 247%, respectively, representing the highest levels in the industry. Next, let me discuss capital ratios and dividends. As of the end of 2024, the group's preliminary CET1 ratio is 12.08%, which is a 13 basis point increase quarter-over-quarter. The Korean won rose around KRW 151 against in the U.S. dollar in the fourth quarter alone, which led to a 40 basis point decrease in the CET1 ratio, while based on solid profits and risk-weight asset management, including asset rebalancing, we achieved a slight improvement in our capital ratio. In addition to improving our capital ratio, the group is also strengthening efforts to enhance shareholder return. At the BOD today for Woori Financial Group, the Board reviewed the group's financial performance and plans to enhance corporate value and decided on a KRW 661 per share year-end dividend, when including the quarterly dividends of KRW 541, total dividends for the year was KRW 1,200, which represents a 20% DPS year-over-year. For your information, the cross date for 2024 dividends will be February 28, 2025. Next, let me delve into more detail about our earnings by specific area, and please turn to Page 4 of the presentation. First, let me go over net operating revenue and our NIM. The group's full year 2024 net operating revenue was KRW 10,440.5 billion, up by 6.1% year-over-year. Interest income was similar to that of last year at KRW 8,886. 3 billion. The bank's 2024 full year NIM was 1.44% and the group NIM, including the credit card business was 1.70%, which represents a decline of 12% -- 12 basis points versus last year. The 2 rate cuts by the Bank of Korea last year and the declining trend in market, which has reflected in asset repricing, thus leading to weaker margins. But in the fourth quarter, we engaged a more targeted loan execution based on asset rebalancing and actively managed our funding cost to maintain NIM at levels matching the third quarter. In 2025, uncertainties in Korea and abroad are leading to concerns about a weak recovery in domestic demand and slowdown in exports, which is expected to lead to larger rate cuts from the BOK. The group is planning to engage in active growth management in line with the changes in financial conditions such as the weakening won and continued efforts to rebalance the portfolio, focusing on prime assets, while lowering funding costs ultimately defending our margins. Next, let me discuss our asset growth and our loan portfolio. As of the end of 2024, Woori Bank's loans totaled KRW 333 trillion representing a 7.2% increase year-over-year, but a decrease of 2.1% quarter-over-quarter. For corporate loans, large corporate continues to have strong demand for credit and high-quality SME loan growth continued, leading to a total corporate book of KRW 186 trillion or 9.0% higher year-over-year. However, in the fourth quarter, specifically, the bank focused on risk asset management and asset rebalancing rather than growth, which led to a modest decrease versus the previous quarter. On the retail loan side, mortgage loans, including policy mortgage increased significantly, leading to a YTD growth of 6.5% in the third quarter. But in the fourth quarter, efforts to strengthen management on household loans led to a slowdown in asset growth resulting in 5.9% growth or KRW 144 trillion in retail assets for the year as a whole. This year the group will be focusing on supplying liquidity to new growth and advancing industries in line with the economic situation. However, there are still many uncertainties, and we are planning to target profitable growth, putting top priority on asset soundness and capital adequacy. Next is the group's noninterest income. Noninterest income in 2024 for the group was KRW 1,554 billion, a significant increase of 41.9% versus last year. As market rates fell during the year, marketable security-related gains increased. In particular, core fee income drove the growth by increasing 21.3% versus last year enabling the group to reach KRW 2 trillion per annum for the first time since establishing the financial holding company. This is the result of the group-wide synergies, including stronger asset management fees on the bank side coupled with active marketing for investment banking and trading by the HQ and efforts for the nonbanking business, including credit cards and capital. In 2025, uncertainty about financial conditions are expected to increase, which may make it challenging to grow noninterest income like this year. However, in line with the full-fledged operations of our securities brokerage arm, we will increase CIB cooperation between the bank and the securities arm, while also strengthening our wealth management marketing by increasing channels and product lineup. This type of diversified marketing across the group should maintain our noninterest income growth momentum. Next, let me move to our expenses and please look Page 5. This is the group's SG&A. And if you look at the SG&A in 2024, it was KRW 4,459 billion, down (sic) [up] by 0.6% year-over-year. The cost-income ratio was 42.8%. Due to the group-wide efforts to rationalize costs, the ratio has continued to decline during the past few years. This year, we launched the securities company and increased investments in digital IT, which drove expenses up, but we were still able to moderate by optimizing channels and engaging in cost savings. Going forward, the group will continue to invest in strengthening its brand value and strengthening its digital competitiveness, but we'll freeze any general costs not related to future core businesses and continue to rationalize channels and personnel as a means to continue our cost management efforts. Next is credit cost and asset quality. 2024, the group's credit cost amounted to KRW 1,716.3 billion, marking a 9.4% decrease compared to the previous year. On a quarterly basis, credit costs recorded KRW 462.5 billion, down 3.1% from the previous quarter. Due to factors such as the economic slowdown in real estate PF restructuring, credit cost slightly increased, particularly in the nonbanking business, but the base effect from the large-scale provisioning in 2023 executed to enhance future economic resilience did have a partial impact. In this quarter, the group set aside KRW 69 billion related to real estate project financing and the completion guaranteed land trust business and KRW 26 billion due to adjustments in loan loss calculation factors reflecting future economic outlook, bringing the total of additional provisions to KRW 95 billion. This and the KRW 210 billion in one-off provisions accumulated for 2024 has further strengthened the group's loss absorption capacity. While the group's credit cost ratio was 0.45%, when excluding the aforementioned one-off factors, the normalized credit cost ratio is being stably managed at around 0.41%. Regarding asset quality, the group continues to demonstrate top-tier management capabilities within the industry. NPL coverage ratio stands at 153% and 247%, respectively, for the group and the bank, while the percentage of loan loss provisions and reserves to total loans is at 1.5%, ensuring sufficient buffer against risks. Also, exposure to real estate PF, excluding the hub for HUG-guaranteed loans stands at 0.5% of total loans. And through proactive management, the need for additional provisioning remains limited. Given the continued uncertainty in markets both home and abroad and ongoing financial market volatility expected in 2025, Woori Financial Group will enhance its market monitoring efforts and systematically reassess risk factors across the group to further strengthen its risk management capabilities. Next, I will elaborate on capital adequacy and shareholder return policies. Please refer to Page 6 on the presentation materials. As of the end of 2024, the group's common equity Tier 1 or CET1 ratio is expected to be 12.08% despite a sharp KRW 151 increase in the USD-Korean won exchange rate during Q4, which led to a 40 basis point decline in the CET1 ratio, strong profit growth and proactive risk-weighted asset management through asset rebalancing resulted in an increase of 9 bps versus previous year and 13 bps compared to the previous quarter. Excluding the impact of the exchange rate increase in Q4, the company's CET1 ratio would have been in the mid-12% range. Woori Financial Group has repeatedly communicated its goal of achieving a 12.5% CET1 ratio ahead of schedule by 2025 despite an uncertain business environment, including increased financial market volatility, economic slowdown and regulatory tightening, the group remains committed to reaching this target of CET1 uplift. This year, the group will focus its efforts on improving the capital ratio. As way of taking a conservative approach to managing foreign currency assets and high-risk assets such as PI and equity investments, given their sensitivity to exchange rate fluctuations and to instill a RWA-centric operational culture across all business units, including the sales field and divisions, the group has refined its systems and improved key performance indicators. Meanwhile, the Board of Woori Financial Group fully taking into account the group's 2024 financial performance and shareholder return policy, decided on a year-end dividend of KRW 661 per share and a share buyback and cancellation program KRW 150 billion. Woori Financial Group in order to review the progress made and share the 2025 road map of its Corporate Value Enhancement Plan first announced last year as the industry-first banking holding company initiative, has released a disclosure on the progress of its Corporate Value Enhancement Plan. Allow me to go into the progress of the financial performance indicators on Page 4 of the presentation materials. Woori Financial Group achieved a 23.1% increase in net income in 2024, resulting in an ROE of 9.3%, up 1 percentage point from the previous year, the group to achieve a mid- to long-term ROE of and over 10% remains committed to efficiently utilizing capital. My apologies. As of the end of 2024, the group's provisional CET1 ratio is up 9 basis points versus previous year to 12.08%. In July, during the announcement of the Corporate Value Enhancement Plan, the group set an interim target of achieving a 12.2% CET1 ratio by year-end, assuming a KRW 1,300 exchange rate. However, due to rapidly changing internal and external conditions, the exchange rate serves by KRW 151 in Q4 and by approximately KRW 181 over the year, causing a 50 basis point drop in the CET1 ratio. Nevertheless, due to robust profitability and meticulous risk-weighted asset management, the group CET1 ratio increased slightly year-over-year. Based on the 2024 financial performance and capital ratio, the group has decided on a total dividend KRW 1,200 per share for 2024, marking a 20% increase versus previous year and the highest dividend payout to date. We expect that dividend yield is in the upper 7% range anticipated to be the highest level in the industry. Regarding share buybacks and cancellations, after the initial KRW 100 billion share buyback in 2023, the first since the group's establishment, the group as part of its full privatization process, bought back and canceled KRW 136.7 billion worth of treasury shares corresponding to the residual shares of KDIC bringing up the scale and size of this program by 37%. With the Board's recent announcement of an additional KRW 150 billion share buyback and cancellation plan for 2025, the group continues to gradually expand its share buyback program annually. Next is on the progress of nonfinancial performance indicators, please refer to Page 5 of the presentation materials. In August of last year, Woori Investment Bank and Foss Securities merged leading to the launch of Woori Investment Securities, making Woori Financial Group's return to the securities industry after a decade. Woori Investment Securities underwent a thorough preparation process last year and plans to fully commence business operations starting this year. Also, Woori Financial Group has signed an SPA with Tongyang Life and ABL Life laying the groundwork for its entry into the insurance business and is currently undergoing the necessary procedures to incorporate the entities as subsidiaries and as mentioned in the Corporate Value Enhancement Plan announcement in July, we have made every effort to pursue M&As without compromising our capital ratio. And in fact, the impact of these 2 cases on the group's overall capital ratio is minimal. Going forward, we will continue to strengthen our nonbanking business to diversify revenue source and maximize synergies within the group. This year, Woori Financial Group has prioritized climate risk management across the group, while strengthening ESG management in various areas. As a result, the group achieved a AAA rating in the MSCI ESG assessment for the second consecutive year -- My apologies, I do have a cold, and I do apologize for the coughing. So once again, securing a global top-tier ESG rating and earning recognition in the market as a sustainable global enterprise. Regarding corporate governance enhancements, we have also made several significant improvements such as establishing an ethics management office and submitting the group's responsibility map in advance. In terms of IR initiatives, we have worked to diversify IR channels of communication for various investors and expand the IR base by providing broader content that covers both financial and nonfinancial aspects, and we will continue these efforts to enhance our communication with the market going forward. Finally, I would like to present Woori Financial's Corporate Value Enhancement Plan for 2025. Please refer to Page 6 of the presentation materials. Woori Financial has designated 2025 as the inaugural year for capital ratio improvement and plans to focus the group's capabilities on achieving a common equity Tier 1 ratio or CET1 ratio of 12.5%. Despite a challenging business environment expected due to prolonged high exchange rates and a low growth trends caused by uncertainties, both home and abroad, we aim to manage risk-weighted asset growth or RWA growth within the nominal economic growth rate through systematic RWA management, quarterly growth allocation, proactive asset rebalancing centered on high-quality assets and promising future industries, along with the expansion of RoRWA oriented business culture, we are committed to achieving our capital ratio target. Next, we plan to introduce nontaxable dividends to expand tangible shareholder return. At the upcoming General Shareholders' Meeting, we intend to transfer a portion of capital surplus to retained earnings. If dividends are paid out from this fund in the future, individual shareholders will not be subject to the 15.4% dividend income withholding tax, effectively increasing the dividend income by 18.2% compared to the previous system. Furthermore, these dividends will also be exempt from comprehensive taxation on financial income. In addition, Woori Financial Group plans to gradually increase the scale of share buybacks and cancellations each year. And in accordance with the amendment of the Capital Markets Act at the end of last year and to enable investors to make more rational investment decisions, we will improve the quality dividend process at the upcoming General Shareholders' Meeting so that the dividend amount is determined -- the first before setting the dividend record date. Woori Financial Group has set its 2025 management goal as a trusted Woori Financial by ensuring that all subsidiaries across the group drive substantial performance by establishing competitiveness in their core businesses based on trust, which is the fundamental essence of finance, we aim to take a significant leap forward as an integrated financial group. We will ensure that all sales and business operations and tasks are carried out within a sound corporate culture and an effective internal control framework. Even amid uncertainties, both home and abroad and a rapidly changing financial environment, we will continue to strengthen our exceptional risk management capabilities. From a financial perspective, our top priority is fulfilling our commitment to improving our capital ratio, thereby laying the foundation for the group's sustainable growth. Additionally, we will actively engage in core cooperative finance programs such as supporting small business owners and assisting vulnerable groups and also embrace marginalized communities to practice the value of coexistence. Through these efforts, we will strive to become a financial institution trusted by customers, the market and society as a whole. This concludes Woori Financial Group's 2024 annual earnings presentation. Thank you very much.

Thank you very much For the presentation. And before we begin Q&A session, I would like to make a brief announcement. As part of the group's Corporate Value Enhancement Plan, we have reinforced market communication by prescheduling the 2025 earnings release dates in advance and the schedule is disclose to investors via public announcement and our website on the 4th of this month. Furthermore, starting from the first quarter 2025 earnings release, we plan to encourage participation from all investors, including retail investors. Through the group's website, investors will be able to submit inquiries regarding financial performance and key issues and we will address major concerns during the earnings conference call. Further details will be provided through a follow-up public disclosure. And now we will begin Q&A session regarding Woori Financial's 2024 annual earnings results.

[Operator Instructions] For the first question, it will come from Daishin Securities. Park Hye-jin from Daishin Securities would be the first question.

Yes. I am Park Hye-jin from Daishin Securities. And right now, it's a very challenging environment, but you have showed very strong performance. And I also believe that there's also been a lot of very good and solid management. So I have 1 question that I would like to ask you. At the end of last year and since then, some of the majority shareholders within the market, have actually showed signs of selling some of their stake. So related to that, in terms of any overhang issues? Or is there any concern that we should have about such a situation? So if you could please elaborate about that, that would be appreciated.

Thank you for your question. And I think if you could give us a few moments to prepare, we will answer your question. Yes, this is the CFO, Lee Sung-Wook. Sorry for the coughing, but I would like to address your question. So if you look at the March situation of last year, there was around 2.4% that we had from the KDIC. And if we look at the acquisition of that and then we did a retirement of that. So on the KDIC side, the overhang issue has been solved. However, if we look at last year, in the case of IMM PE, there were some shares that they had sold. So they initially had a 6% ownership. But as of January 2024, the remaining stake that they have as of the end of last year, they sold around 0.14%. And I think that they have completely sold out of their position. So in the case of IMM PE, I don't think that there will be any additional sales that will be coming from that party. And the reason for the sale that they have actually had is that for IMM PE, the fund in itself was coming to an end, and they had hold ownership for a very long period of time. But because they were closing their fund, I understand that was the reason for it. And if you look at the other controlling shareholders that we have, we do not foresee any -- or expect any additional sales from them. So as a result of that, we do -- we believe that any overhang issues with regards to our share have completely been addressed. So therefore, we don't believe that any overhang issues should be impacting our equity price going forward.

The next question is from Hanwha Investment & Securities, Kim Do Ha.

Thank much for the presentation on the sound policies. I'm currently referring to Page 6 on the Corporate Value Enhancement Plan, and it has to do with the dividend. And I can see that you haven't yet to transfer the capital surplus, but it's to take place in March. And within this year, you will be transferring the portion of the surplus. And I can see that starting from year-end dividend of 2025, that would be applicable, but I want to understand it would the quarterly dividend also be applicable? And then also, I do believe that you had also mentioned about an equal dividend payout for the 3 quarters, but with the fourth quarter not be applicable. And also with regard to M&A, you did provide some information on the any impact on the capital ratio with the merger or the acquisition of the insurance arm. So I'd like to ask for you to elaborate further. And in the case of the 2 candidates, the insurance firms, I do know that if you apply the related guidelines and regulations, I believe that we do need some source of defense line in order to push this ahead. So I would like to understand, are there any specific plans in place?

Yes. Thank you very much. So I can see that basically 2 questions. And please bear with that for just a moment as we prepare to answer your questions.

Yes. So let me respond to the questions in the order that you have posed. So as was announced, with regard to retained earnings and the transfer, it has to be approved at the General Shareholders' Meeting in March. And only then can we proceed with this. So once it's approved at the AGM, then we can utilize this as a funding for dividends. And based on the Commercial Act, it would -- the amount will be set forth before the record date. So based on the Commercial Act, it would be on the dividend for the next year and the legal review also indicated that this will be possible setting for the dividend payout of 2026. Therefore, with regard to the transfers that would take place, it would start off with the year-end dividend of 2025 and onwards. And next was on quarterly dividends and some financial groups do provide an equal dividend payout every quarter. However, our quarterly dividend policy, as was mentioned last time around, it's about 50% of the typical dividend payout, and we will be providing the dividend equally up to 50%. So we will look into the market condition and the situations, and it will be the same level as what was announced in the past. So depending on the situation and the group situation, the dividend policy may differ. But in terms of how it would be paid out rather than just being important, it's basically about increasing the annual DPS. We believe that, that's the critical aspect here. Therefore, the quarterly dividend policy right now would be 50% of the previous year's dividend so that we can enhance the predictability of dividend payout and also it was -- we will review any additional equal quarterly dividends payout like any other financial groups in the future. And lastly, with regards to the insurance side that you asked. First of all, what I can say is that's something that we have continuously said is that recently there are some changes that are taking place, so maybe we can add on to that and what we talk about. So when we acquire the insurance companies, of course, there will be some impact in terms of our capital equity. However, if we look at the profitability, we do think that it will be helpful in terms of rebalancing our portfolio, being too focused on the bank side. We also believe that we can enhance our overall shareholder value. So for Woori Financial Group, right now, we have around 90% contribution coming from our bank side. But once we acquire the insurance arms, then we can decrease that contribution to 85%. So we do believe that it will diversify our profit portfolio and we do believe it's the best way to do so. So as a result of that, follow -- we believe that this is a situation on how we can actually address this issue and it's a very large issue in itself. So in addition to that, it does not hurt our group's capital adequacy. So we do believe it will enhance the portfolio going forward. So right now, even if we acquired Tongyang and ABL, since the asset -- the overall price that we were able to negotiate was sufficiently low. We do believe that the effects on the application on a risk weight of 250% of the group's limit on key investments and the benefits of the low price will offset each other. So that if you compare the group CET1 ratio as of the end of 2025, there will be no difference between ratio before and after the acquisition. And the reason for that is because when we talked about this last time, we mentioned 8 basis points. But if you look at it as of the end of September, it's actually softened to around 6 basis point. And since the end of the fourth quarter, our CET1 ratio has continued to improve. So as a result of that, because this continues to increase, if we look at the actual recognition of capital out of our overall capital acquisition gains, that's why at the end of the day, because of the total effect, there will be no impact as of 2025. And lastly, in terms of the question, I do believe that as we acquire these entities, what is the plan for their capital management going forward? So maybe to address that question. I think that if you look at the recent trends in terms of interest rates going down or insurance regulations being strengthened, there's a lot of attention given to insurance centers that you are well aware of. So if these 2 companies actually are included in Woori Financial, then we will have a very conservative business plan and a focus on capital ratios and also the solvency ratio. So following the acquisition, we are planning to put top priority on financial soundness, including the K-ICS ratio for our business targets to ensure we establish a stable business profile. The 2 companies in light of current rate cuts and changes to insurance liability regulations going forward or adjusting the placeability of a lower K-ICS ratio currently by issuing hybrid securities or subdebt and also seed coinsurance to strengthen their K-ICS ratio. Following the acquisition, of course, the highest priority will be on strengthening capital and secure long-term profitability to improve the fundamentals of the business. So we will engage in asset rebalancing to decrease the risk-weighted assets, optimize the duration gap and dispose of real estate assets to ensure we can maintain the K-ICS ratio at an appropriate level without any capital increases by the group. So this is something that we will put our best efforts against. Thank you.

The next question is from KIS, Mr. Baek Doosan.

I am Baek Doosan from Korea Investment & Securities. I do -- would like to ask a question with regards to the completed guarantee land trust. You've mentioned that within the fourth quarter, you have provision KRW 69 billion. And as of Q4, if we include all of the trust accounts, what would be the exposure and also in terms of asset quality, how are you classifying these businesses? And recently, if you refer to the press release by FSS, you can see that the bank financial holding companies with regard to such land trust has actually recognized or underestimated the recognition of their RWA. So I would like to understand whether this can actually impact the capital ratio and bring it downwards.

Thank you very much for that question. Yes, let us -- me respond. I am, Park Jang-Geun, the CRO. If I may respond. So with regard to the completed guarantee land trust businesses. We only have 18 remaining. So versus previous quarter, you can see that we've actually got rid of 7. And for the sites that have yet to complete construction in '25. So with regard to this completed guaranteed trust businesses, it's going down, so it's being well managed. And then also with regard to the trust account as well as the provisioning, if you look at the gap, it's about 50%. So it's around KRW 210 billion at the end of December that has been provisioned. So we do have sufficient provisioning with regard to these assets. And next year, if we do well manage and prudently manage, these assets and the businesses, we do not believe additional provisioning will be required. So we will make sure to prudently manage on these businesses. And also in terms of the matters pointed out by FSS, if you look at the real estate companies with regard to this completed guarantee trust businesses. And this will -- guarantee basically is about extending credit. So it's about having an off-balance account on this where the risk-weighted assets would have to be applied here as well. But for us, in June, we've engaged in the calculation and at the end of December, there are only 7 cases that are applicable right now to what was pointed out by the FSS. So it's basically brought down in terms of the numbers. So in December, it has been all completed in terms of the construction. So for those that would have to go off balance, so it would be quite minimal. So therefore, I want to mention that the number has been brought down to a minimum. So at the end of December, we have applied and I calculated the RWA accordingly. Thank you. And if I may just add some additional details to the response. So the last question had to do with the completed guaranteed trust and whether that would impact the capital ratio. And the FSS, their examination, well there are, of course, certain recommendations not only on this trust, but in other assets. So with regard to this type of business or assets, at the end of September and at the end of December, when we were putting together the capital -- calculate the capital ratio is already reflected. So we believe that there will basically be no negative impact to the ratio. So as was already mentioned, the 12.5% CET1 ratio, that uplift is something that we will really push your head with, and we will measure to achieve that in the year.

The next question will be coming from NH Securities, Jung Jun-Sup.

Yes. This is Jung Jun-Sup from NH Securities. There are 2 questions that I would like to ask you. The first would be that if we look at the CET1 ratio right now, 12.5% would be the overall target that you want to achieve as early as possible. However, if we look at this year in terms of this target, if we do have 1 on a quarterly basis, what do you think the pace would be to reach this 12.5%? If you do have a time line for that, if you could share with us, that would be very useful. And the second is with regards to the nontaxable dividend, this policy in itself, I do believe there is very good direction for the group. However, in terms of how much you can actually convert into this form is probably limited. So right now, as of now, how much are you actually thinking of converting?

Yes, thank you for your question. And if you could just give us a couple of minutes, we would appreciate that.

Yes. So if I could ask, in terms of our quarterly targets that we would have on the CET1 for this year, on a per quarter basis, in terms of our risk-weighted assets for the full year, of course, we do want to balance out the growth quarter-over-quarter. And as mentioned before, on a total basis, we do want to be within the nominal growth rate, so that would be right now, nominal growth we see to be around 4% because the growth rate is now at a lower level. So within 4% would be the RWA growth that we want to see. And we do on a per quarter basis, have a balance growth taking place. So as a result of that, we also believe that our capital ratio will, on a per quarter basis, probably equally increase. That would probably be the best assumption. And then in terms of the retained earnings and transfer to that, we do have a bit more room. However, what we are thinking of as of the current time would be is to do around maybe KRW 3 trillion in total. So this is on the February 28, we would have a BOD resolution on this. And then at the GSM, we would have to have final approval. So the overall process would go accordingly. So in terms of the total amount, it would probably be around KRW 3 trillion. And if we do have KRW 3 trillion, then that means that for the past -- next 3, 4 years, that we would have sufficient room to dividend.

Next question is by Kang Seung-Gun from KB Securities.

My first question has to do with shareholder returns. So the 12.5% early achievement. And if you look at early in the year and now, it seems that we will see how this will unfold in the latter part of the year. So then the shareholder return policy that was announced, if it's below 12.5%, for instance, then is that the TSR would be below 35%? And then in 2025 year-end, if you believe 12.5%, then in the year-end dividend, there could be some well changes or adjustments made. So would we be able to expect that? So I would like to understand the shareholder return rate, what would that be? Could you give us some guidance on that on the TSR? And then within this CET1, we do have an impact of excluding the foreign currency denominated from the RWA. So I would like to understand what the impact was, what the magnitude was of the impact? And then in 2025, the NIM CCR, loan growth, any guidelines that you can share for 2025?

Thank you very much for the question. Please bear with us for just a moment as we prepare to answer your questions.

With regard to the shareholder return policy, last time around, you mentioned that 12.5% plus, it would be more than 35% to 40%. So that was the range that we have set forth for Woori Financial, and the shareholder return policy and our will to expand that has been reflected in the numbers. So 12.5% at year-end. Of course, if we do achieve and which we will achieve that would mean that the TSR would be 35%. And KRW 150 billion of share buyback and cancellation was done for that purpose. So once again, it was our aspiration and our will is to be 35% plus. And also with regard to the structural positioning, so this is something that has to be approved by the FSS. So at the banks at the January end, we had to submit a preapproval application and we're awaiting their approval. So with regard to the structural positioning, we have non-hedged overseas entities liabilities, and we believe that the size and scale may be different depending on what is approved by FSS. And the last question had to do with the growth rate, NIM, CCR, basically 3. So if I may just provide you with a brief update on the case of the growth rate, as was mentioned, it would be within the nominal economic growth rate. And if you look at the overall structure and organization, our ROE, if it's 9%, then the growth rate would be within 4%. And then on the capital ratio would increase by about 30 to 40 bps. So there is an impact. So internally, it's about managing this within 4% and this year's business plan is also well aligned with that. In the case of NIM, excluding this year's growth, there is an overall rebalancing of not just banks, but for all affiliated subsidiaries. So we'll be focusing on rebalancing to achieve profitability. Therefore, with regard to NIM, if we do see further rate cuts 2x to 3x, it has to actually go down by 3 to 4 bps. So through rebalancing, what we want to do is defend NIM as much as possible. And it would be in the upper range of 1.3 -- 1.3% to 1.4%. So that's the prospects that we have in terms of how that will be managed. And last but not least on credit cost ratio or CCR. This year CCR was quite high. The normalized CCR was a bit high. We had the provisioning for the nonbanking business and also the banks have added provisioning, and that's why that has led to a credit cost ratio of mid 0.4% and for normally 0.4%. And for this year, we believe that it can be managed within 0.4%.

The next question would be from BNK Securities, Kim In.

Yes. Can you hear me well?

Yes, we can hear you very well.

Yes. Thank you for your good performance amidst a difficult challenging environment. I think that they have a lot of questions that have been now answered. But if you look into next year, one of the things that I do believe it's challenging is because I think that some of the early retirement expenses have been transferred or pushed over to the first quarter. So I do think that, that would have an impact on our cost-income ratio and maybe you need to do cost savings by saving in other areas. So I think that if we look at the weaker NIM and also the higher credit cost ratio for this year, I think that we have covered it by higher growth. But next year, I think that if we are at the nominal growth rate, are we going to be able to grow NIM is something that I would think about? And secondly, is that on the nonbank, we are a bit weak. So if the interest income continues to go down then on the nonbank side for the noninterest income, can you make up for this? Because our nonbank business is weaker. So how much of an increase do you think you can see? And in addition to that, if you look at the overall credit cost in 2025, I also believe that there continues to be talking about provisioning and the need for it to do so. So I don't think that it's going to decline a lot versus 2024. So for 2024, you profitably increased a lot, however, in 2025, I think that across the board, there are very many challenges that you have. So from the senior management side, what is your view about such a situation is something that I would like to ask.

Thank you for your question. And if you could some time to reorganize. That would be appreciated.

As you have just mentioned, I think that in 2025, if we look at the overall growth rate, we do think that it's going to go from 2% this year to 1% for next year. And in addition to that, other challenges also are in the market. So I think that overall that if the base rate does go down, then of course, our NIM also slight -- even slightly will go down. And also on the bank side, our interest income decrease. But if we look at the nonbank side, of course, the overall funding costs will decrease on that side. So as a result of that, in terms of the overall interest income, we do foresee it to be stronger. So though it will not be a large increase, we do think that it will be better. On the noninterest income side, we do think that 2024 was actually a very strong year. So because we have had a high base, we think that next year, it would be to difficult to achieve and repeat this. So we think that the current growth that we are seeing will continue. So as a result, on the security side, we launched this in August, and we think that by the end of this year, it will be in a position to start to contribute to the group as a whole. And in addition to that, as you have just mentioned, on the credit cost side for the group as a whole on a Y-o-Y basis, it did not go down a lot. However, if we look at the overall picture on credit cost, we do think that for next year, it is an area that we actually foresee a decline to take place, especially on the bank side. This year, we did see a slight decrease versus 2023. But we think that on the bank side for 2025, it will go down again. And then on the nonbank side, continuously, there was a very conservative provision that we did. We did also around KRW 200 billion cleaning up and KRW 100 billion this year again. So on the nonbank side, we do think that the credit cost will actually also go down going forward. So all in all, we think that in 2025, that as you have just mentioned, though it will be a challenging environment, we do think on a Y-o-Y basis, we -- there are various areas, in which we can improve ourselves, and we will continue to focus on that from the business perspective.

Next question would be by Won Jaewoong from HSBC Securities.

In a very difficult environment, well, thank you very much for that sound performance regardless and thank you also for your efforts for shareholder return. And the question was already posed, but I do want to mention, in terms of the change in OCI in the capital ratio, I would like to ask how that works. So my understanding is that last December, FSS has indicated that for the overseas branches, for instance, in terms of the RWA provision, they were -- those entities were exempt. So even if that was correct, or was that right, it's true that the improvement was quite extensive versus other banks. So I'd like to understand the improvements. Is there a reason why Woori was able to improve up to that acceptance. Is there a special reason behind that? And also with regard to asset rebalancing, there was an improvement of 33 bps. So what kind of measures have enabled that as well? If you can give us a breakdown, that would be great.

Thank you For the question. Please hold for just a moment.

Regarding the asset balancing and OCI. So with regard to asset rebalancing, the group would look into, let's say, low-margin, reverse margin or low-quality assets. And in Q4, there was replacement, reduction of such assets, and we minimize the scale. And in nonbanking business, there were specific assets that were managed, but there were adjustments made to lower-risk assets. And you can see that if you look at won-denominated loans, there was a decrease of around KRW 8 trillion Q-o-Q. So all in all, the group has been focused on, well, reducing risk assets and basically rebalancing the risks and assets. And as mentioned, for assets with high risk-weighted, there was that replacement or shift to move on to lower-risk assets. So that was done in the fourth quarter of last year, and there was an impact of around 0.33%. And in terms of the OCI, so if you look at other consolidated profitability with the exchange rate soaring, this, of course, leads to increased risky assets. But in addition to that, you can see that in terms of the translation to overseas assets, there was an increase by around KRW 300 billion. So that was the impact. And there were some other factors that did impact which has led to an increase of 0.21%.

Yes. Thank you. I do think that there has been a lot of questions that were asked and answered, and it was a very fruitful discussion. Right now, there is no one that is asking for a question. So I would like to wrap up the Q&A session here. For those of you, if you have any additional questions, please do not hesitate to contact our IR team. And with this, we would like to wrap up the Q&A session and also the earnings conference call for the full year of 2024. Thank you for your attendance. [Statements in English on this transcript were spoken by an interpreter present on the live call.]