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Good afternoon. My name is Hong Sung Han, Head of IR at Woori Financial Group. Thank you for joining today for Q3 2026 Woori Financial Group's Earning Results. We will begin with the presentation delivered by our Group CFO, Kwak Seong-Min, followed by a Q&A session. Also be advised that for today's call, we are providing simultaneous interpretation for overseas investors. With that, let us begin Woori Financial Group's Q3 2026 earnings presentation.

Good afternoon. I am Kwak Seong-Min, Woori Financial Group's CFO. I will go over the group's earnings results for Q3 2026. Please refer to page two of the earnings presentation documents available on our website. First, our net income. For Q3 2026, Woori Financial Group recorded net income of KRW 1,049,200,000,000 up 4.4% QoQ, exceeding KRW 1 trillion for the second consecutive quarter.

The group's quarterly earnings capacity has stabilized around KRW 1 trillion. As a result, YTD net income through Q3 reached KRW 2,658,100,000,000. This is an improvement from the same period last year, when we recognized about KRW 550 billion in bargain purchase gains from the acquisitions of Tongyang Life and ABL Life. Excluding this one-off factor, it's an increase of 19% YoY. Supported by this enhanced earnings capacity, the group's common equity ROE stood at 9.9%, continuing its clear improvement. This reflects our progress over the past several years through disciplined management of RWAs and strategic capital initiatives, including asset reevaluation. We have strengthened our capital position and deployed this into productive finance and high growth non-banking subsidiaries, laying the foundation for the group's medium to long-term earnings growth.

As a result, both interest income and non-interest income reached record highs, with non-interest income accounting for nearly 20% of total income. At the same time, group-wide cost efficiency initiatives helped stabilize cost to income ratio and credit cost ratio at progressively lower levels. With revenue growth and cost stabilization, YTD operating profit increased by nearly KRW 570 billion YoY, further enhancing our sustainable earnings generation capacity. Next, capital adequacy and shareholder returns. As of September end 2026, our preliminary CET1 ratio stood at 13.8%, maintaining the industry-leading position. This is a meaningful improvement, nearly 90 bps this year alone, and 170 bps over the past two years. This year, as part of productive finance, we significantly expanded corporate lending guarantees and capital markets investments.

However, our capital capacity against external uncertainties has strengthened further, supported by solid fundamentals, disciplined asset rebalancing, and the impact of a decline in exchange rates. Based on this, our BOD today approved a Q3 dividend of KRW 221 per share, fully non-taxable. The record date is November 10th, and the payment is scheduled for November 30th. With this, our quarterly dividends for the year have been completed, leaving only the year-end dividend. For us, the year-end dividend accounts for more than 50% of the total annual dividend. The current dividend yield stands at about 2.2%, but given our dividend structure and the non-taxable benefits, shareholders' effective annual dividend yield for 2026 should be significantly higher. With the additional KRW 150 billion share buyback approved in July for the second half, we are confident that our total shareholder return for 2026 will be significantly higher than last year.

In addition, the board resolved to cancel 57,369 shares we acquired and held for specific purposes, including comprehensive share exchanges in accordance with the amended Commercial Act. Now let me go over the group's financial performance by business segment in page three. First, net operating revenue and NIM. YTD net operating revenue through Q3 came in at a record KRW 8,680,300,000,000, up 6.2% YoY, on the back of balanced growth in both interest and non-interest income. YTD interest income reached KRW 7,035,900,000,000, up 4.5% YoY, maintaining solid growth. The main drivers were 25% increase YoY in large corporate lending, as well as the improvements in group's NIM compared with the same period last year. However, the bank's NIM for Q3 stood at 1.43%, down 7 bps QoQ.

Market rates increased more sharply than lending rates and our proactive efforts to secure funding ahead of additional rate hikes placed pressure on funding costs. We expect NIM to recover as asset and liability reprice over time and the impact of higher funding costs gradually subsides. We will work to accelerate margin improvement by expanding high-quality new customer base, attracting low-cost deposits, and maintaining a profitability-focused loan book. Next, let me discuss the bank's loan portfolio. As of September end 2026, the bank's total KRW loans stood at KRW 313 trillion, up 1.52% from the end of June. Corporate loans increased by 1.42% QoQ to KRW 156 trillion due to the acceleration of productive finance. In particular, lending under the productive finance reached roughly KRW 27 trillion, 1.5 times our full-year target, which we achieved ahead of schedule.

Retail loans stood at KRW 154 trillion, up 1.4% QoQ, following the government's easing of household lending limits in August. Building on our strong competitive position in corporate banking, we will continue to pursue loan growth focused on high-quality assets. We will further enhance risk management by integrating AI across the entire lending process, from credit assessment to post-monitoring. By doing so, we will create a foundation for sustainable growth without compromising asset quality. Let me now turn to the group's non-interest income. Non-interest income for the first nine months reached a record KRW 1.6444 trillion. Core fee income rose 18.8% YoY to KRW 1.898 trillion, driving earnings growth. Our non-bank subsidiaries increased their earnings contributions by strengthening group synergies and enhancing the competitiveness of their core businesses. In particular, our securities subsidiary has expanded its IB business since its capital increase in May.

Collaboration with the bank has also continued to grow with the two jointly arranging deals. As a result, underwriting and advisory fees for the first nine months rose to 2.4 times the level recorded a year earlier, reaching KRW 151.4 billion. The securities subsidiary accounted for half of this total. Our insurance subsidiaries also contributed significantly to non-interest income growth, with insurance earnings increasing by approximately KRW 100 billion YoY. Stronger synergies with the bank helped increase the group's bancassurance earnings by approximately 10% from a year earlier. As a result, the non-bank share of non-interest income rose from 45% a year earlier to approximately 60% this year. Meanwhile, the group's Q3 non-interest income declined 7.6% QoQ to KRW 581.4 billion. This reflected higher securities valuation losses amid rising interest rates and stock market volatility, together with a sharp decline in capital market fees.

However, higher foreign exchange earnings as exchange rates stabilize, along a recovery in insurance earnings to first quarter levels, helped contain the decline. Woori Financial Group will continue to pursue business opportunities by harnessing synergies across its banking, securities, insurance, and capital market subsidiaries. By steadily increasing the contribution from non-interest businesses, we will move towards a more balanced earnings mix. We will turn to costs. Please refer to page four. This shows the group's SG&A expenses. Group SG&A expenses for the first nine months totaled KRW 3.8575 trillion. Q3 expenses stood at KRW 1.2246 trillion, broadly unchanged from the previous quarter. The group's cost-to-income ratio remains stable at 42.3%, in line with our full-year target. We will proactively make essential investments to strengthen the group's future competitiveness, including expanding infrastructure for our insurance and securities businesses and upgrading IT security systems to guard against cyberattacks.

At the same time, we will continue to improve cost efficiency across the group by optimizing our distribution channels and workforce and using AI to streamline operations. Next, credit costs and asset quality. Credit costs for the first nine months of 2026 totaled KRW 1.28 trillion, down sharply by 15.7% YoY. Q3 credit costs stood at KRW 314 billion, a substantial decline of 28.5% QoQ. The quality of our loan portfolio has improved as we have expanded lending to high-quality corporate borrowers and steadily rebalanced our assets over the past two years. As a result, our credit cost ratio for the first nine months declined to 42 basis points. Woori Financial Group will remain focused through year-end on achieving our full-year targets of reducing credit costs by 15% and bringing the credit cost ratio to the low 40 basis points range.

Our asset quality indicators also remain sound as of end of Q3. As of end September, high-quality loans continued to account for around 85% of the corporate loan portfolio. The NPL ratio also edged down QoQ, supported by a decline in new NPL formation, reflecting our rigorous asset quality management. To prepare for rising interest rates and macroeconomic volatility, we will further strengthen monitoring of vulnerable borrowers and proactively pursue NPL sales and write-offs to maintain sound asset quality across the group.

In closing, the key transformation underway at Woori Financial Group is this: having strengthened our capital position, we are now entering a new phase of growth using that solid capital base to secure future growth opportunities, strengthen our earnings capacity, and increase shareholder returns. Our bank is reinforcing its earnings base by strengthening core businesses, including corporate banking and wealth management, while improving cost efficiency. Following the acquisition of full ownership of Tongyang Life in August, we are now moving forward with the integration of our two life insurers. Once completed, this integration will deliver cost synergies and economies of scale. Our securities subsidiary is steadily building its track record in IB. Obtaining the derivatives license currently being pursued will further strengthen the foundation for earnings growth.

Our credit card, capital finance, asset management, and key subsidiaries are also increasing their earnings contributions by enhancing their core competitiveness and group synergies. By delivering KRW 1 trillion in quarterly net profit for two consecutive quarters, we have demonstrated that the group's earnings capacity has reached a new level. Looking ahead, we will further strengthen the group's fundamentals through sustainable improvements in ROE and share the benefits with shareholders through differentiated capital returns, reinforcing our competitiveness as a comprehensive financial group. This concludes Woori Financial Group's Q3 2026 earnings presentation. Thank you.

Thank you. Now, we are going to begin our Q&A session. If you would like to submit your question, please press star and one. If you wish to cancel your submission, please press star and two. We are going to wait until the question comes. The first question comes from IB Securities, [audio distortion]. Please go ahead and ask your question.

Hello. Thank you for giving me the opportunity to ask questions. I have two questions. First of all, for the margin side, there was a slight significant decline this quarter. What was the impact on the asset management as well as the funding side? Also, starting from July, we have some impact that reflect in some extent, related to fixed margin payout. The second question is for the Tongyang Life. I understand that you ran it quite strongly.

Was the purpose of your merger to secure liquidity, or did you think that it was more profitable than the authorities were concerned about? I would like to ask you what you did. If possible, at the time of our return rate reached 10%, I would appreciate if you could explain what level of the hedging you are using.

Yes. We got the two questions. Could you repeat your second question again?

I have a question about the Tongyang Life. In September, it looks like you did a 700 release quite strongly. Was it because to obtain the liquidity, or did you think that it was okay for your profitability? Also the 100% reversal timing, when do you expect that that will be? Please give us a moment as we prepare our response.

My name is Kwak Seong-Min, CFO.

For the first question, it was about our margin. YTD basis, the margin is about 1.3 bps, so it is quite high YoY. I think what you are asking is based on QoQ basis, because on this quarter, there is a decline about 7 bps, and you probably want to know why. I would like to further explain about that. I think that I covered this before once, but Q3 this year, I think that there was a burden with the funding cost for all banks, and that was the same for us as well. There was an increase in the funding cost because of the increase in funding rate. But for Woori Bank, we have a CD-linked loan which accounts for 70%, which is quite high.

For Woori Bank, compared to our competitors, we had to endure the increase in funding rate, but we also had a bigger gap between long and short-term. To further explain on that, as you know, the market rate, the CD rate, as well as the funding rate. The CD rate, it went up about 41 bps by end of September. For one year, the funding, the bond, it actually increased about 132 bps. There was a difference between long- and short-term interest rate, and because of that spread, we had an impact on our Q3 earnings. From September and early October, the long-term rate actually increased more sharply than the short-term. There is the gap between long and short interest rates that had impact on our bank because the CD-linked loan that accounts for 70% of our total loans.

That had impact in Q3. By early next year, we have an expectation that the BOK will continue to increase the rate, but we do think that the rate might decrease afterwards. I think that over time, this risk or this factor will actually start to fade. To be more specific, there was a decline in core deposits, which actually led to 2 bps impact. The long and short interest rate spread that I just covered, that actually had about 5 bps impact. In Q2, we had a decline about 7 bps. For this quarter, we had a decline of about 7 bps. If you look at just the Q3 only, there is a decline of 7 bps as I covered. That may look like a significant drop.

If you look at the first half of this year compared to the end of last year, during the first half of this year, Woori Bank had a YTD of 1.46%, and the first quarter to second quarter, it was 1.51% respectively. YTD compared to the end of last year, it is an increase of 5 bps for NIM. You can compare the figures yourself. It was a slightly increase in NIMs compared to our competitors for the first half of this year. I think that you could also consider that fact, and as you know, we will also cover the loan growth later. The Korean won loan increased about KRW 12 trillion YTD, but KRW 8 trillion came from the corporate lending, and we also covered it in IR. Corporate lending growth is supported by our principle or the strategy, which is all-in margin.

We actually focused on the productive finance, and we increased the large corporation corporate lending. We not only looked at the rate, but we also tried to increase the non-interest income from those transactions. As we increased the corporate lending, we also tried to increase the fee or the FX-related fee income. The IB fee income went up significantly because of that. As you know, the IB, we mostly focus on large corporations. In this process, we have an opportunity to source the IB deal, which could increase the IB-related fee income. Under that strategy, we tried to capture not just the interest income, but also the non-interest income. That was our all-in margin strategy. However, there was a slight burden on the NIM for this quarter.

Overall, we increased the corporate lending to increase both interest and non-interest income, and that was part of our strategy. Starting from Q4, I believe that this downward trend will no longer be there. Q4, we will at least remain or have a slight increase. Starting from 2027, we are going to start the asset refreshing, which will improve the NIM. That is the answer for the first question about the NIM. For the second question, insurance-related question, you mentioned Tongyang Life. I think that it covers both Tongyang Life and ABL Life because we ended the insurance as of September. I am not sure if I am able to share the reason why here. As I know from the regulators, we were told to stop to sell this life insurance.

I think that this not only applies to us, but it also applies to other insurers as well. The whole life insurance that we stopped selling, it was more from the ABL Life rather than the Tongyang Life. There could be an impact for ABL Life. This started back in September. We had an internal meeting with our insurers, but this is coming from the regulators, so we need to obviously comply with this. We decided to create an alternative product which can replace this, and we will try to launch this as soon as possible within October. For us, it is a product mostly sold by ABL Life, so not so much impact for the Tongyang Life, but bigger impact for ABL Life.

The alternative products or other solutions, we are currently working on it to make sure that we do not lose the deposit.

Okay. From NH, we have [audio distortion], who has the next question. You have the floor.

Yes, sir. Hello, everyone. My name is [audio distortion] from NH Securities. Thank you for giving me the opportunity to ask a question. I will ask two questions. First, about the CET1 ratio. Of course, it went up, but not dramatically. Maybe because of the previous reason, and I do not know how to interpret this figure. Why did it go down? You talked about the bond and also the interest rate. Were those the sole causes or also because of securities? Also, going forward, if interest rate hike continues, and if the market continues to slow down, what is your expectations in terms of the outlook? Do you have a long-term plan? That is my question as well.

I have a question about the insurance. It was delisted, so it will be consolidated, and perhaps more contribution is underway. What would be the next plan? Do you have anything in mind? If we were to do this by next year, do you have any plans for further increase of capital or contribution?

Yes, sir. Thank you very much. We will now prepare for your question and entertain your question. Thank you very much for that question. The first one was about CET1 ratio change, and number two was about the insurance integration plan and anything that we have in mind in terms of contribution. About the CET1 ratio, as you can find it from the IR document, it was 12 point-ish to 13. So about 8 bps went up. As you can see from the material, we wanted to improve the operations risk. So 13 bps went up as the expenses went down by about KRW 202 billion. You may think that actually the increase is not that high. With that in context, I will give you my answer.

It was KRW 12.6 trillion, and the group, when it comes to recurring asset growth, it is about KRW 8 trillion in terms of the growth. As you know, we have FX, and 183 went down in Q2, so KRW 7.4 trillion declined. We had the FX impact as well as the asset impact as well. In terms of net asset growth, it was about KRW 600 billion, and that is equivalent to a decline of 3 bps. As I have mentioned, we want to increase the risk of operation, and 13 bps went up. So we had, in total, 10 bps impact. We can see that as a contribution. Then we have a 7 bps and then 4 bps in dividends and so on. We also had the FX effects. FX fluctuation also had an impact.

It actually had an impact on RWA as well as the assets. The RWA impact is also factored in. When it comes to other bond loss, for us, unlike other companies, the impact is not that high. Based on what I have mentioned, when RWA was concluded on track

It would be about 13.9, but now we have 15 bps difference because of a specific reason. I cannot specify this company's name, but you have to look at the semiconductor. We have some vendors that we work with, and end of September is the month of corporate tax submission or payment. This is quite technical, but it actually had an impact on the RWA in the payment process. It is about KRW 900 billion. It was not cash. Corporate tax actually increased the amount by KRW 4 trillion, but RWA-wise, it was only KRW 900 billion, but this is temporary. The asset grew because of that corporate tax issue. We plan to resolve that in October. This was temporary, once again. About the overseas, we have some businesses without control.

They actually took out some loan, and we had that loan in end of September and early October it was repaid. This was something unexpected. As of end of September, about KRW 600 billion was the amount. As of end of September, we had some temporary factors. We had some transactions with businesses, and RWA actually went up by KRW 1 trillion, and it impacted 15 bps. As of end of September, it is down 15 bps. If you look at effective number, we have almost resolved the issue as of October. End of September, it is about 13.95. As we sustain this and maintain this by Q4, 50% will be the year-end dividend out of all dividends, and we plan to use the capital ratio that will go up in that manner. About Q1, that is my answer to your question.

Also about your second question about the integration of the insurers, and any concerns about the additional contribution. This is my answer to you. As I have been saying, the integration of the two companies has been officially announced, and we are now on track. Integration of the two insurers requires a lot of tasks and works. Not just finance consolidation, but HR and IT integration. Three tracks mainly. In terms of IT integration, we need more than that. We need to integrate the financial system and also HR at the end of the day. We have the schedule in place, and we are now on track. We believe that October 1st is the deadline for integration, and so far we are progressing on track. We are on schedule.

As I have mentioned, now the life insurance, in that community, we plan to become number five. As of integration period, we are focusing on cost synergy. We wanted to maximize cost synergy towards that destination. Now the integrated entity, we want it to be financially most effective, and that is how we are working on this. How are we going to maximize CSM and also K-ICS view, how are we going to work on that number is something that we are looking at. We are working to maximize the numbers. To talk about the technical ideas, it is about how we are going to work with the subsidiaries or the underwriting companies. Based on that, we want to integrate and relieve your concerns.

What we can say for now is that after integration, while we do not want the holding company to actually inject capital to this insurance because of financial issues, that is something that we want to refrain from. We have not only legal integration, but also HR integration that we have in mind, and we will do our best to stay on track. With the integration, the IT investment shift for the insurers, that also includes investment for AI. Be it sales or the entire business process, especially underwriting. End-to-end value chain will be monitored. We plan to embed AI to the legacy system, and that is what we are doing right now as we work for IT integration. Once we complete the process, we will be efficient and

The entity, the integrated entity will be effective, so no further capital injection.

Thank you. Next question is from UBS Securities. Please go ahead and ask your question.

Hello, good afternoon. My name is [audio distortion] from UBS Securities. I do have a question about the asset quality. The card delinquency rate increased a lot in this quarter, so I want to know the reason behind that. Also, the group, the CCR, it is maintained at a very low level. After the Q4, how do you actually foresee the asset quality, including the CCR?

Thank you for your question. Let us go ahead and answer that question. My name is Kwak Seong-Min, the CFO. For the card, I think you have a question about the soundness of the Woori Card. The delinquency rate, yes, it went up, as you can see in the figures.

There are no specific reasons behind this, though. Compared to first and second quarter, the disposal as the write-off fee cost went up. That is why the NPL went up and the delinquency also went up. As you know, we are right now in the higher rate cycle. The card, the investment banks, these are the subsidiaries that are more accessible by the vulnerable customers. We continue to monitor these transactions and loans to make sure that we do not see higher increase for delinquency rate. As I covered, the disposal, the size actually went up from last quarter. That is why we are seeing this change. In Q4, we are going to actually stabilize at the same level as our competitors. Delinquency rate and NPL ratio in Q4 for card will go down.

For the credit cost, I think you had a question about the outlook. In Q3, the NPL rate, it all went down. Because the NPL for banks and other subsidiaries actually went down significantly, and that has been reflected. We have been managing the risks proactively to make sure that we do not have any new NPLs. I think that our effort actually was reflected in this decline in the figures. As you know, the one-off items such as the ones that we had in Q1 and Q2, we do not have that anymore. We increased the corporate lending, which also helped reducing the new NPLs. Q4 and 2027, we are going to continue this effort. As for asset quality compared to our competitors, we are going to continue our leading position, and we are going to maintain that position going forward.

The 2026 CCR, I think it will stay well within the early 40 bps range. We also promised that we are going to actually decrease by 15%, and this is a goal we believe that we can achieve this year. Before we had a real estate trust and the investment banking, we actually eliminated those in 2025, so we do not have any risks associated with that anymore. Going forward, the credit cost, the CCR management, I think we can actually maintain the same level. Thank you.

Next question. From HSBC, we have Mr. Won Je-Yong, who has this question. You have the floor.

Okay, thank you very much for the opportunity to ask questions. I will ask two. First, about insurance. Number two, about shareholder returns. Two weeks ago, there was this article that came out, and ABL Yeouido Tower sell-off is accelerating. That is what the news is saying, and according to the news, it is about KRW 300 billion. The price could change and Woori has been selected as a preferred bidder. I believe that the process is faster than expected. When do you think the earnings will be reflected, and what about GT One? When will this be reflected? Can I have a rough number? Number two, about shareholder returns. In fact, when it comes to shareholder capital, you are managing this quite well. From October, it is about 13.9, and that is what you mentioned before.

ABL Tower, once it is sold, then CET1 will also go up and improve. As for shareholder returns, it will be much higher than last year, and that is thanks to your dedication. According to the estimate, your target is about mid-40 bps, and that is my expectation. This is my question, it is about the following year, because CET1 is improving and then earnings go up, then other companies, they are exceeding 50%. Exceeding 50% maybe should be our next goal or target. What about next year's shareholder returns? Do you have any plans for that or any ideas? Do you have any plans to introduce new frameworks for next year? That is my question.

Okay. About the insurance, the asset sales, and also shareholder returns. Two questions. Yes, we will now give you the answers in a moment.

Okay, about the first question about the property sales. ABL Life, yes, you said that you saw the news and it is out. While most of the data and information is correct, I cannot represent it fully. Yes, the building is up for sale, and I believe that you want to know the timeline. What we have for now and what the newspaper is saying, while we are actually talking with a preferred buyer, and if everything goes as scheduled, then the ABL Tower, we believe, for now, will be sold by the end of this year. If we were to look at the schedule-wise, we are now on track to complete it by the end of this year.

The price, well, it's the preferred buyer, and once it's selected, it will be a real estate agent and not M&A, but still, we have to do auditing. That will determine the price. I am being prudent here. I do not want to disclose any specific numbers today because we have the counterpart, and maybe we are not in a position to disclose the numbers for now. What I can say for sure is that the negotiation, if it goes as planned, then by the end of this year, it is highly likely that the sales will be completed. So that's how much I can tell you. As you know, now insurers, well, let's say that if it was a bank's property, it's RWA 100%, so it does help.

But then for insurers, it's a CET1 ratio, and the calculation is different from that of the bank. Given that into account, CET1 ratio should be looked at differently because you have property out and then cash in. So it will not impact the net asset, but the CET1 calculation of the insurers, well, you know better than us how to calculate the number. So it's not bad, but then once we reach sales profit, then it will be retained, and it will be contributing to CET1. That's how much I can tell you for now because it is now in progress. Also, moving on to your second question about CET1 ratio and also shareholder returns, you wanted to know some outlook or expectations. As I've mentioned in Q3, it's about 13.8. That was an estimate.

We have some specific factors with the companies that we are working on, and there was an asset increase because of that. Now the precondition is that we resolve all of that. In Q3, it will go above 13.9. But then year-end dividend accounts for 50% of total dividend payout. So now once we decide on the year-end dividend, we will actually reflect that towards the end of the year. I cannot disclose the number now, but then it will be a great contributor. So it will cause some decline. As for capital ratio, yes, so we are at the level of our peers as well. So now there were at times, last Q4, where we had to stop in terms of capital ratio, but then that's no longer the case this next quarter.

Given that growth potential, then we believe that CET1, we will maintain 13.6-13.7 range. So that's what I can tell you. With that as an assumption, as you've mentioned, now our total shareholder return, or TSR, could be mid-40 range. We believe this is very possible. Then 50%, well, if it was tax-exempt, and if we were to reflect that, then TSR 18.4% is added. So tax-exempt wise, it's above 50%. Please keep that in mind. Next year, as you've mentioned, now the nominal TSR, of course, we will have to look at the financial statements of next year. But now, as CFO, we want to relook at the TSR. Nominal wise, yes, my idea is that it has to exceed 50%, but then as we plan for the next year's financial statement, we need to work on the details.

And as we make it more concrete, as you have mentioned, we have this Value-Up Plan, and there are some elements that we plan to upgrade. With that, as we discuss that within the board and reach a decision, then at the end of the year, when we do earnings presentation, perhaps we could discuss the number. What is certain is that the capital ratio went up, and we want to make sure that it contributes to growth and shareholder returns. So capital ratio goes up, and from 2027, we want to fully take advantage of that. Now the plan is to kick that off starting 2027. That is what I want the market to understand it as well. Thank you.

There are no more questions.

Out of the questions that we addressed today, we also had questions that came in in advance through our website. They were mostly from retail investors. Most of questions was about the dividend for 2027 and how long we are going to do the non-taxable dividend. We were not able to cover that today during the Q&A session, so we will ask CFO to answer that.

For dividend, for DPS, as of now, based on our Value-Up Plan, our aim is to continue to increase this on an annual basis more than 10%, and we are going to continue with this going forward. As we do the shares buyback, we are going to continue to increase DPS, and of course, ROE will have to be improved.

Through the increasing ROE from the non-banking sector, we can also increase the net income, and we can downsize the outstanding shares, thereby maintain the 10% level for DDPS. So we are going to continue to achieve this goal. As you know, the non-taxable dividend, we are the very first one to do this, and we are the only financial holding company who are giving the non-taxable dividend. For the non-taxable, the total amount is KRW 6,300,000,000,000. After Q3 dividends, the remaining amount will be KRW 5.2 trillion. So we are going to maintain our quarterly dividend principle, which will cover at least three or four years going forward. About the dividend, maybe not right away. It is not something that we can decide either this year or next year.

But in long-term basis, because we do have enough funds to cover three or four years, I think about 2028, maybe, we can have another discussion, and we can reassess the amount that we can pay the non-taxable dividend. So maybe we can secure the amount additionally for non-taxable dividend that time. This is something more we have to look at in the long term basis. Before we use all the amount, we will review whether we can secure additional funds for non-taxable dividend. But this is a midterm target. Maybe it may be too early for me to comment on this, but this is a possibility, and this is something that we are reviewing right now. That is all.

Thank you. I think that is all the questions for today, and we are going to conclude today's presentation today.

Again, thank you for joining the Woori Financial Group earnings conference call for Q3. Thank you.

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.]