Shinhan Financial Group Aktie

Good afternoon. This is Park Cheol, Head of IR or Investor Relations. Thank you for taking time to join Shinhan Financial Group's earnings presentation for the first quarter of 2026.

Joining us today are Group CFO, Jeong Hoon Jang; Group CSO, Go Suk-Hyun; Chief AI Data Officer, Hyuck Jae Choi, Group CRO, RA Hoon ; Shinhan Bank CFO, Kan Yeong Hong; Shinhan Card, CFO, Lee Jeong-bin; Shinhan Securities CFO, Lee Jaesung; and Shinhan Life CFO, JOO Sung-hwan.

We look forward to your active interest and participation. Today's session will begin with a presentation on the group's first quarter 2026 financial results by our Group CFO, followed by a Q&A session.

With that, let me invite Mr. Jang to begin his presentation.

Good afternoon. This is Jang Jeong Hoon, CFO of Shinhan Financial Group. Thank you for joining our earnings presentation for the first quarter of 2026. On Pages 2 and 3 of the presentation, I will walk you through our newly announced corporate value-Up plan, which was disclosed earlier today. In July 2024, we introduced our value-Up plan with three key targets referred to as 10-50-50 and have been executing various initiatives with strong momentum to achieve these goals.

As a result, we achieved our 50% shareholder return target ahead of schedule while also delivering meaningful improvement in PBR, demonstrating both the effectiveness of our strategy and the strength of our execution. In addition, with ongoing tax reforms related to dividend income and continued government effort to revitalize the capital market, we thought it is now an appropriate time to comprehensively review our existing plan.

Accordingly, under the leadership of our Board of Directors, we have upgraded our existing value plan now branded as Shinhan Value Up Triple+, incorporating the current market environment and our strategic direction. Previously announced Value-Up plans by financial holding companies largely focused on setting absolute target at specific points in time to address undervaluation driven by low shareholder returns or maximizing shareholders' return by opting for full return in case of excess of target.

However, we believe it's now time to transition to a new value creation framework that includes not only predictable shareholder return policies, but also a sustainable growth story. Rather than simply returning excess capital or targeting specific numerical threshold, our goal is to establish a sustainable value enhancement framework where shareholder returns and corporate growth are organically aligned, supported by a strong capital base.

Based on this, we have established three new key strategic objectives. First is achieving an ROE of 10% plus. We are targeting an ROE that exceeds our cost of equity with a focus on delivering faster improvement. Given our current business portfolio, we expect this to improve at a notable rapid pace. Building on the bank's strong recurring earnings base, we will strengthen our non-banking competitiveness in phased manner, focusing capital markets through 2026 and on credit finance business thereafter and manage our ROE within the 10 to 12 percentage range through 2028.

In particular, based on Shinhan's proprietary PBR ROC logic free detailed in our value of materials, we will enhance capital efficiency by simultaneously managing capital ratios, improving profitability across our subsidiaries through a set of granular action plans. Second, a total shareholder return ratio of 50% plus. We have removed our upper cap on shareholder return rate while introducing an intuitive formula takes into account both ROE rate and based on principles of capital based on our required return rate.

Through this approach, we believe investors will be able to more easily anticipate both direction and level of shareholders' return policy alongside the company's growth. However, in periods such as present where ROE remains below COE, we will adhere to a principle of gradually increasing shareholder return ratio on a year-on-year basis. We also refined the composition of shareholder returns, taking into full account recent tax reforms related to dividend and investor preferences.

While maintaining our current equal quarterly dividend policy and a gradual increase in both EPS and total dividend amount, we plan to prioritize the use of tax-exempt dividend resources secured through approval at the March Annual General Meeting this year. For your reference, DPS for the next 3 years will continue to grow by more than 10%. And the outlook between dividend and shareholder buyback will be determined based on a rational framework rather than current returns, and we'll continue to communicate transparently with the market regarding progress toward our previously announced target of reducing 50 million treasury shares.

Third is maintaining a CET1 ratio of 13 percentage plus. We will secure a sufficient capital buffer to account for macroeconomic volatility and maintain stable capital ratio under all conditions. In addition, any excess capital generated through improvement in capital efficiency, including RWA optimization will be returned to shareholders in principle. Furthermore, under the oversight of the Board of Directors, we will annually analyze and review gaps against our target, continue to update our 3-year guidance and communicate the results to the market.

Let me now turn to our financial results for the first Q of 2026. Turning to Page 4 is the business highlights. As of end of first Q 2026, the group's CET1 ratio preliminary is stable level estimated at 13.19% despite many uncertainties surrounding us. So the Group Board of Directors resolved to declare a cash dividend of KRW 741 per share for the first quarter of 2026. For reference the record date, this cash dividend is April 30, shares must be purchased by April 28 to be eligible. Dividend schedule is to be paid by May 29.

In addition, out of KRW 700 billion share buyback program scheduled through July 2026 with completion of KRW 404.3 billion and shares will be retired immediately upon the purchase.

Net income for the first quarter of 2026 amounted to KRW 1,622.6 billion, representing a year-on-year increase of 9%, driven primarily by top line growth centered on noninterest income. Supported by the group's strong financial fundamentals and disciplined capital adequacy management, both ROE and ROTCE improved reaching 11.9% and 13.4%, up by 0.5 percentage points, respectively. Please refer to the key indicators that measure the group's shareholder value.

Turning to Page 6 on capital. The group's CET1 ratio declined by a total of 68 basis points due to RWA growth and also shareholder returns. However, it was managed at a more stable level, reflecting a decline of just 16 basis points relative to the end of last year. Group RWA increased by KRW 7.3 trillion due to asset growth and KRW 3.1 trillion due to foreign exchange movement, but remained well within our planned range. Going forward, we will continue to ensure stable capital ratios through efficient internal optimization and strategic resource allocation while fulfilling our role in providing necessary funding to the real economy.

Please refer to Page 7 for a breakdown of assets and liabilities. Now operating profit before expense for the first quarter increased by 11% year-on-year, supported by solid net interest income and significant growth in noninterest income, which I will now explain in greater detail. Group net interest income increased by 5.9% year-on-year as NIM improved and interest income from securities increased significantly.

Bank NIM improved by 2 basis points quarter-on-quarter as loan yields increased in line with rising market interest rates and funding costs were well managed. For loans in won, although we saw a decline in household loans due to regulations, overall Korean won loans increased by 1.4% year-to-date as we strengthened our role in providing productive financing to corporate borrowers.

On to noninterest income. Group noninterest income increased by 26.5% year-on-year with strong performance in fee income and broad-based improvement across other segments. Income performed well across most categories, excluding investment banking fees, which declined due to a high base effect from the prior year. In particular, brokerage fees increased by 215.2% year-on-year, driven by strong equity market activity leading overall growth.

Fees related to fund sales and bancassurance also increased by 54.7% Y-o-Y, continuing their upward trend in line with government policies to promote capital market development. Gains on securities declined in bond-related income due to the recent sharp rise in market interest rates, but was offset by valuation gains on other securities.

Insurance-related profit also increased by 8.7% year-on-year, and we expect to maintain stable earnings through disciplined management of CSM.

Next on to SG&A and credit costs. Group SG&A expenses increased by 10.4% year-on-year due to higher education tax despite ongoing cost efficiency efforts across our subsidiaries, including different business segments. However, with operating profit increasing significantly, the cost-income ratio declined slightly to 36.7%, remaining at a stable level. Credit costs for the first quarter increased by 17.5% year-on-year, driven mainly by higher recurring credit costs, including increased write-offs at the bank and some emergence of corporate nonperforming exposure.

It is somewhat encouraging that one-off credit costs related to real estate project financing has stabilized as a result of our preemptive and conservative provisioning in prior periods. Amid continued uncertainty driven by high interest rates and elevated FX levels and ongoing geopolitical risk, the credit cost ratio increased by 5 basis points year-on-year to 46 basis points. However, we will continue to manage credit costs rigorously with our full year target range of mid-40 basis points.

On to NPL, the group's NPL coverage ratio declined by 12.4 percentage points compared to year-end despite proactive write-off and NPL sale policies and conservative provisioning. This was mainly due to an increase in substandard and below exposures resulting from principal and interest payments related to project financing sites where trust-based construction completion guarantee obligations had expired. These impacts, however, have already been factored in, in prior year credit costs.

Delinquency ratios for both the bank and the card business, which has been gradually improving, increased slightly in the quarter. However, the bank recorded the lowest level of net new delinquency in the industry. And for card, the increase was driven by a reduction in total assets due to lending regulations and remains more than manageable. Given the continued economic slowdown, rising corporate credit risk and ongoing challenges faced by vulnerable customer segments, we believe it will be important to maintain conservative asset quality management while providing timely and appropriate funding support.

I refer to the slide for loss absorption capacity and charge-off activities, and we will move on to subsidiary performance. The securities business delivered strong earnings growth of 167.4% year-on-year, driven by increased brokerage commissions from higher trading volume, improved prop trading income among strong capital market dynamics. The bank recorded 2.6% year-on-year growth in earnings, supported by net interest income despite declines in security-related gains, higher credit costs and the impact of increased education tax.

The card business saw a decline of 14.9% Y-o-Y as improvements in operating revenue and credit costs were offset by one-off expenses related to voluntary retirement programs.

For Shinhan Capital, it recorded a significant improvement in earnings, driven by gains on securities, including dividend income, supported by favorable market conditions. The life insurance business experienced weaker performance Y-o-Y due to higher loss ratios leading to increased insurance variance loss and a decline in insurance finance income from rising market interest rates.

As mentioned earlier, beginning with this earnings release, we are providing additional disclosure of quarterly net income, RWA and return on capital by segment for your reference. Page 15, we have detailed information on our overseas business performance, which continue to demonstrate differentiated growth. Pages 16 and 17 provide updates on our digital initiatives and ESG. From Page 19, you will find detailed financial statements at the subsidiary level, funding and asset liability management as well.

This concludes our presentation. Thank you very much.

Thank you very much. Now we will begin Q&A session.[Operator Instructions]

We will accept first question. Can you hear me? From NH Securities, Mr. Jun-Sup Jung.

This is Jun-Sup Jung from NH Investment Securities. Actually, I have 2. First, regarding your corporate value enhancement program. Thank you very much for your thoughtful program. Now productive finance is being promoted by the government, and there were some announcements by the government to ease capital requirements. So if those eased requirements are applied, how much of an improvement will there be, say, in terms of your CET1?

And in terms of your -- the improvement, can it be -- is it available to fund shareholder returns? For example, the regulatory authorities, the point of easing, the requirement would be to direct more towards productive financing to 13.4%. So excess capital beyond 13%. So how can you use that excess capital? And the second question, you did mention your Value-Up plan. I think it's on Page 16 of your slides. there is an internal limit in terms of internal return. Cost of equity, PBR. So you said you're going to use the ROE, PBR logic. So what is your internal hurdle rate in terms of expected returns, your implied returns?

Yes. Thank you very much for the questions. Please hold for a moment as we prepare the answer.

So regarding the first question regarding the easing of capital requirements, our group CRO will take that first and then the remainder, I think I will be able to follow up on.

Yes, I'm the Group CRO. So you mentioned productive financing and rationalization of capital requirements by the authorities. So from a market risk perspective, so retained earnings and equity contribution, for example, will be included in the scope. So we are still in the process of seeking approval from the authorities. So it is pending. And so depending on the result, it may have an impact.

But 10 basis points or so improvement, we think is possible in terms of our CET1. And then operational risk, exemptions in terms of count, RWA. So things are quite fluid at the moment regarding approval at the Board level and the regulatory authorities position. But market and operational RWA combined, I think maybe we can see about 20 basis points or more in upside in our CET1.

So let me take the remainder of the questions. Like we have heard, 20 basis points or more, potentially, we can see that kind of improvement. But like you said, well, in terms of our Value-Up plan, we actually explained there. But we have been seeing some fluctuation quarter-on-quarter. So net max 36 basis points or so that variance actually was quite wide at about 36 basis points. So while we say 13% plus, so in the DBS model, our peers, maybe from 13.0% to 14.4%, maybe that we will not see additional returns within that range.

But toward the end of the year, we'll look at the balance between growth and shareholder return. So we will have to make some internal decision-making between the 2 sides. And perhaps at the end of this year, it will be factored into our growth plan as well as our shareholder return policy as well.

Regarding our internal hurdle, so for the first quarter, well, the closing of the accounts was done in February. And we mentioned at that conference call that 9.1% is our CET ROE, and we want to grow our net income by more than 10%. That was our guidance. In terms of our internal hurdle, this is about the additional incremental returns. CPR is 0.8% and COE and ROE -- well, our target ROE is 10%. That said, then our internal marginal return will mean it will be slightly higher than the inverse, which is 12.5%. That is our internal view anyway.

But our company-wide ROE is still below COE slightly. So we are looking at things more cautiously. And until we see more of a normalized base, we are looking to gradually increase shareholder returns. So that is already incorporated in our Value-Up plan.

Yes. Usually, I don't comment about the finance part, but I'm in charge of strategy for the Shinhan Financial Group. Regarding productive finance, I do lead our initiatives. So the question by Mr. Jung -- the first question by Mr. Jung, you talked about shareholder return. If we could use that increase in CET1 towards shareholder return. But the purpose or the intention behind easing of the regulations was not for the purpose of returning more to shareholders. It was, in principle, meant to be directed more toward productive financing.

So in principle, we should be aligned to the purpose behind the easing. So it should be more toward growth so that it can be used to fund productive financing. We do believe that, that should -- that is consistent with the intention. But of course, it's not always very clean cut each time. So we will look at the overall situation from a more comprehensive view as was explained by our CFO. So I hope that was a sufficient answer.

We will move on to the next question, please. From HSBC, Mr. Jaewoong Won.

Regarding shareholder return, thank you for giving very careful thought and for providing a very refined program. I have a few questions about that. First, in the formula, what is the definition of growth? I'd like to know. Is it capital growth or RWA growth? So depending on which it is, it can actually mean a big difference in numbers for TSR. If ROE is 5.5%, RWA growth target is between 4% to 5% and capital growth target, I think on average, it's about 3%. So actually, the range is quite big. So between the two, what do you mean exactly when you say growth? So it will help us in our projections. Can you give us more color?

Now I'm thinking that perhaps in the fourth quarter, you might announce a decision about how to use the available amount. So for this year, what should we expect? So will we have to use a different formula at mid-year? So in terms of timing of actual application of this formula, could you give us more color when exactly it will start to be applied?

Thank you very much. We will ask you to hold as we prepare the answer.

So regarding the first question, so like you said, we are thinking hard about what you pointed out. If we deep dive a little bit, we came up with the formula because CET1, so one assumption was that we maintain the CET1 and then the capital growth in inverse, it comes out to the TSR. That's the formula. So maintaining CET1 means that relative to RWA growth, capital growth actually has to be bigger. And so capital growth then can be a main factor. But then temporarily, if RWA will it be 3% growth or 7% growth, it can depend.

So we want more stability and so probably we will find the more stable of the two. But you're concerned that the average growth of capital. We're not using that 2% or 3%. But within, there will be a capital adjustment. There are different buffers that will be removed. And so we're looking at pure capital growth. So something between 4% to 5%, we think that will be the level. That means that RWA growth, we will obviously try to maintain that growth within that range, 4% to 5%.

But we added plus alpha because if we have more upside available, then we can add on potentially, which is why we have that plus in the formula. But in a more -- the most typical example, target ROE and our target growth. By growth, we mean capital growth or RWA growth. So I use the word or, capital growth or RWA growth. But I think ultimately, both will converge within the 4% to 5% band. So within the next 3 years, TSR will likely be within the 50% to 60% range. And so that is what is incorporated in the plan.

Now in terms of the timing of application, like you said, possibly within the fourth quarter, we will probably share our consensus view with you. At that time, we will look at the growth, pricing, margin profile, CCR and we'll share. And I think this will also come up naturally in that context. But based on our business plan, as we have said, for this year anyway, we will -- if we apply this as is, CET1 is 9.1%. So CET ROE is lower than COE. That means CSR should be higher than last year. That's one.

And RWA growth and capital growth, when we did the calculation, as shown in the example, it's about 5.1% or so. But CET1, it has -- the plan was to lower the CET1 by about 8 basis points. So this converts to about a 4% impact in terms of the shareholder return ratio. So for this year, 50.2% plus alpha and the max 53%, I think likely it will be somewhere in between that range. So that is our internal calculation.

Well, I hope that answered your question. We will now go to the next question.[Operator Instructions]

Bae Seung Jun From LS Securities.

From LS Securities, Bae Seung Jun.Now one question I have is that I think you can become issuer in your securities company. So what is your anticipated return or profitability for issued notes?

So please hold while we prepare for your answer. So I think CFO Securities can answer your question.

So I'm Jeong Hoon, CFO of the Securities. Thank you very much for the question. At the year-end, we got license for as an issuer. So in February, we start the issuance and currently, about KRW 240 billion has been issued. For this year, I think to make it as a stable vehicle in terms of issuance size and volume, we would like to keep in control. So I target currently for year 1, about return rate of 100 bp is our plan.

Okay. I hope that answered your question. Now we will accept next question.[Operator Instructions]

The first number is on some numbers in terms of asset soundness. NPL coverage ratio is 110% for the holding company. So it is quite lower than before. Up to now, delinquencies don't appear to have entered the improvement cycle yet. So regarding your added NPL burden, do you need to do additional provisioning of that? So for example, petrochem companies, there might be some -- there are concerns about the lagging effect from that sector. So in terms of your asset quality and the burden in terms of additional provisioning, what is the view?

And the second question -- I also have 2 very simple questions as well. So for the next 3 years, tax exempt dividends will be a priority you said. You have KRW 9.9 trillion available for distribution, but it won't be used all at once. So are you going to leave some? And for AOCI, our capital appears a bit improved, but because of the rising interest rates, I thought that it would go down because of valuation losses. Maybe it's because of your Life business. Could you just explain the duration gap?

Thank you for the question. Please hold for a moment as we prepare the answer.

Yes. Regarding the first question regarding asset soundness, our group CRO will cover that. Regarding the tax distributions, I will explain. And number three, regarding the duration gap, we'll hear from the Shinhan Life side. So the group CRO will begin.

Yes. Thank you for the good question. So first, regarding the NPL coverage ratio, the 0.81% is substandard or below for the group. Now there has been an increase of KRW 468 billion in NPL. And so the NPL coverage ratio did go down about 12.4 percentage points from last year. It's about 113%. If you look at the overall trajectory, credit costs for the group in 2022, prior to that spike in interest rates, we went through a very low rate environment.

At that time, credit cost annually was below KRW 1 trillion. But with rising interest rates, starting in 2023, it started to exceed KRW 2 trillion. But more recently, with the delayed recovery of the economic slowdown, we are seeing more increase in delinquency. For the group overall, substandard or low or delinquency NPL, these indicators actually for the most part, are improving. And so our goal is NPL coverage ratio of 150% as the bottom line for the bank. And then we will engage in selective write-off and sales and to maintain asset quality.

In terms of our current provisioning against our total loan portfolio, NPL coverage ratio, we want to maintain at above 110%. For Tax expense dividends, at the time of planning, we said that we will provide a 3-year guidance. So for the next 3 years, that's what we mean by priority to tax expense dividend. So if we have left over resources, so potentially, we can -- yes, we can consider other options as well. And then after the duration gap answer, if I have anything to add, I will try.

So I'm the CFO of Life. As of -- compared to end of December, interest rates have gone up by more than 40 basis points. As of December, duration gap was 0.2%, so a slight plus. But as of the end of March, it's about 1% is what we expect. So the duration gap actually is improving. So just to explain a little bit, I think you're asking about the capital adjustment. So AOCI valuation loss, yes, there was some loss. But in the past, we had M&A and adjustment of consolidated entity. So it's a mix. And overall, there is an overall offsetting effect among those factors.

I think there's another question from JPMorgan Securities.

I would like to ask about the tax exempt dividends. I'm a little bit confused, so let me ask about that. So KRW 9 trillion or so have been transferred into retained earnings. And you said that with priority, they will be used for tax-exempt dividends. So do you mean that, that full amount will be provided as tax-exempt cash dividends? Or is that also a mix of the separate taxation dividend as well? So separate taxation with the amendment of the tax laws, every year, the cash dividend actually will have to be increased by 10% year-on-year to qualify. So for tax-exempt dividends, do you assume that cash dividends can increase by more than 10% year-on-year? So is that the plan?

The second question is, I think you said before that this year, the capital market will likely be promoted. So you want to grow the securities business and also you will work on improving the card business as well. What is your target ROE for securities and for your credit card business as well? When you think for the capital market, there have been a lot of activities among retail investors as well. So I can see why security business might grow. But merchant fees are increasing and household loans are decreasing. So how do you expect to improve profitability for the credit card business? So do you have a certain strategy in mind that you could share with us?

Yes. Thank you for the question. Please hold as we prepare to answer.

Yes. Regarding the first question, just to clarify, as you said, for this year anyway, as you know, we have the AGM in March to approve the capital reduced dividend. So we cannot do -- well, actually, we cannot do the tax exemption dividend yet. Only upon closing can we do that at the end of the year. So for this year, first and second, third quarter, we will be subject to separate taxation. And then next year, post account closing at the end of the year, we will then move on to tax exempt dividend.

And then three years going forward, we will do full tax exempt dividend. There is a 3-year grace period for separate taxation. So we gave some thought to what would happen after the grace period was finished, but there were high expectations among the investors for tax-exempt dividends. So as much as possible, we wanted to continue to provide that. Because this tax exempt, obviously, that means we don't necessarily have to increase cash dividends by 10% or more every year. That 10% threshold is on the size of the dividend, whereas what we are talking about now is EPS that we want to increase EPS by 10% year-on-year, which is more strongly perceived by the investors.

We think net income is likely to grow by more than 10% this year. Naturally, the DPS likely is also to grow by that much as well. And then on top of that, of course, we will continue to do share buybacks and cancellations. And so when that is considered, even if we increase EPS by 10% or more, as we do tax-exempt dividends, we will be able to -- we're very confident that we can increase EPS by 10% or more. We're very confident, which is why we included in our announcement.

Regarding the securities business, the brokerage business, you will know, but the brokerage business before maybe 10 years ago was always last. But now, as you know, the ROE has improved significantly for the security sector overall. For securities, usually it's about KRW 5.8 trillion in terms of capital base. But the ROE, I think, is likely going to exceed that this year. Now we are working to make sure that, that is sustainable.

Regarding highly specialized finance, you said that you're not convinced. When we talk about the credit card performance, we thought that this year, it's down by about KRW 20 billion year-on-year. But in the first quarter, we already had some impact from the voluntary retirement. We did mention nonrecurring earnings, if we see those earnings coming through, we're contemplating different options. And there are different stakeholder interest involved, so we are cautious, but we did think that we will look at making the composition between cost and earnings more efficient.

So as we do that throughout the year, while performance will not dramatically increase, but we think underlying foundation or the fundamentals can gradually improve. So our approach is that we will see gradual improvement of the performance. That was the full answer.

So from Mirae Asset, we have Mr. Tae Joon Jeong.

I'm Tae Joon Jeong from Mirae Asset Securities. I do have two questions. First is the rate is actually going up and this is resulting in different situation. So what's your guidance going forward on that point is my first question. And second question is, so 34% or above, you said you're going to return it immediately. So at year-end, if it's going to exceed the threshold, then for the exit, that bought back next year, that -- is that correct understanding?

So please hold while we prepare for your answer.

So on your first question, bank CFO can answer. And on the second question, I will answer that.

So good afternoon. I am [KANG Yeong Hong], CFO. So first, NIM, if I share with you, for the first Q NIM is 1.6 compared to previous quarter, it increased by 5 bp so its improvement by 2 bp because of the market situation improvement and favorable conditions formed in the market. And since the latter half of the last year, we focused profit orient growth. I think that also helps. So what will happen to market rate to give you some projections.

Now currently, the domestic economy is not really doing well, meaning there are some downward pressure for the rate, but if you consider inflation and FX rate, there's not much room to move further downward. That's our anticipation. So neutrally, we believe that market rate will continue as is and under that estimation, very profitable, high-quality asset-oriented productive finance can be expanded and that could also help increase our liquidity that were resulting in improvement in NIM, and we'll do our best to achieve that. So in summary, NIM will maintain the current level or we will try best even to improve that.

And in the beginning on the -- about the second question, from 13 points to 13.0%, 13.4% is the range that we'll be managing. But if it existed, is it going to be given out? Not really. If it goes beyond that range, if it's excess amount, of course, needs to return to our shareholders, except in planning any room for excess growth or as I said before, marginal internal return rate, we are very cautious, but ours is a bit higher than the market COE.

So by year-end or beginning of next year, how to utilize that, that decision will be, in other words, will be made at that time. BBS, our international peers, they don't because it exceeded 13.5%. So if it's like excess -- significant increase then the logic is to do it within a few years. So -- but basically, our philosophy as we keep repeating ourselves, the most important thing is ROE. If the ROE increases, then of course, return rate would naturally go up in terms of also size. But through the growth efficiency, we will also focus on maximizing shareholders' return, and we can commit to that.

And Sinyoung Park from Goldman Sachs.

This is Sinyoung Park from Goldman Sachs Securities. Regarding ROE, I had some additional questions for you. So ultimately, as you said, ROE has to grow in order for the shareholder return ratio and the total size of shareholder returns to grow. In the materials, I think you're saying 10% to 12% is your target range for ROE over the next 3 years. And then bank versus nonbank or bank will be maintaining status quo, nonbank based on ROCE is targeting an improvement by about 3 to 4 percentage points, which is actually quite a sizable improvement, I would say.

So what would be the main drivers that allow you to improve it by that much? So will it be about improving the asset quality? Or what kind of improvement in profitability do you expect? Or are you planning?

Thank you. Please hold as we prepare the answer.

So as you've seen in the materials for nonbank, so nonbanking has been a strength of our group for many years. I think we're past the rough patch where it was challenged. The nonbank ROCE, why do we expect it to improve? Well, of course, there will be some impact on the market. So brokerage, of course, is very active for the groups with security arms. In that case, the ROCE, ROE, obviously, will improve. Well, to what extent will it improve?

I talked about how we expect fast improvement because the security firms of other peer groups are already at a high level. And so while they can grow the overall size of their net they're already at a higher level, whereas we start from a lower end. So for securities, ROCE, we're not thinking about just 10%, but we think that we will be able to achieve quite a significant jump in terms of absolute ROCE. So bank and securities will be the two leading pillars. And that said, of course, top line plus profitability, given current conditions, of course, it's not very easy. But for us, the two big directions are like this.

I mentioned how we want a phasing gradual approach. But for this year, we will focus on acquiring more customers because ultimately, they translate into the bottom line for our business. So internally, we are preparing for that customer acquisition. And then in a more direct sense, it's ultimately about cost efficiency. As I said, it's about fundamentally changing the structure to make the cost structure more efficient, to strengthen our fundamentals. So our funding costs going down and provisioning improving, we can't just blankly expect that to happen because the situation is more challenging. It will not happen just on its own. We have to make the cost structure more efficient.

And when there are one-offs in terms of the top line, when there is upside, we will direct that to improve our underlying fundamentals. And EPS allowing then we can contemplate potentially M&A if that is not required, then we can actually do bold consolidation of our business portfolio as well. So we are looking at various options in a broad sense. I hope that was a sufficient answer for you.

Yes, I think we have from White Oak Capital, a question from Mr. Shane Matthews.

Congratulations on the results. Just one question. I wanted to confirm the group level NPL coverage. Is it targeted at 110% now and if that's the case, when we look at pre-2019 levels, the coverage levels are maybe 20, 30 percentage points at least higher. So why consider operating at a lower coverage level now versus before? What is the change in thinking at this point in time? [Foreign Language]

Thank you for the question. Please hold as we prepare the answer.

Yes, this should be answered by the Group CRO, and I will add if required at the end.

I'm the Group CRO. Regarding credit cost, when I was explaining about that, from a long perspective, I talked about credit cost trends. In 2022, after we saw that spike in interest rates, the real estate market was not good and credit cost among all financial growth actually was quite elevated and poor. So NPL in the write-off and sale market -- there's a lot of supply recently, so pricing actually is not good.

So write-offs and sales, it's not very active at the moment either. And real estate market in order for it to recover until that time, we need some time to sort out the exposure. So until then, we do believe that the NPL coverage ratio is likely to be a bit lower than in the past. But given -- depending on how fast the market stabilizes and market interest rates, if we're able to push the write-off and sales more, that can have the effect of improving our NPL coverage ratio.

Let me just add a little bit. For us, 110%, it is lower for us at the group level. But the bank, it's about 150%. We expect to continue to maintain 150% for the bank. But why 110%? We have Shinhan Asset Trust. That was the main reason through litigation or trust we incorporated onto our books. We have already recognized the necessary provisions though. Until the assets are liquidated and sold off, it will be captured and booked as NPL.

So the absolute number is quite substantial, which is the main factor why our group NPL coverage is down to 110%. We will have to see how the real estate property market develops going forward. Even if we have to sell at a certain discount, we want to -- as we recover NPL, it will take a year or 2 years maybe, which is why in the short term, our target is set lower at 110%. Thank you very much. I hope that was a sufficient answer.

So time has passed quite a lot. So if you have any additional -- I mean, it seems to be -- there seems to be no more questions. So with this, we would like to conclude Shinhan Financial Group's earnings call for the Q1 2026. Replay of today's presentation will be available on our website and Shinhan Financial Group IR YouTube channel. If you have any further questions regarding to today's result or new Value-Up plan, it's all disclosed on our website. So please you can reference that. And of course, if you have any additional questions, please contact our IR team.

And with that, we would like to -- we will see you at the next earnings call. Thank you.

[Statements in English on this transcript were

spoken by an interpreter present on the live call.]

Good afternoon. This is Cheol Woo Park, in charge of IR. I thank everyone for joining us at the 2025 third quarter earnings release by Shinhan Financial Group despite your busy schedule.

Today, we have here with us Group CFO, Sang Yung Chun; Group CSO, SeogHeon Koh; Group CRO, Dong-kwon Bang; Shinhan Bank CFO, Jeongbin Lee; Shinhan Card CFO, Haechang Park; Shinhan Securities CFO, Jeonghoon Jang; and Shinhan Life CFO, Sunghwan Joo.

We will start out with the CFO's presentation on business performance of Q3 2025, followed by a Q&A session with the executives present here with us.

Let me now go to CFO Chun to start the presentation.

Good afternoon. Thank you for joining us for the third quarter 2025 earnings release. I will begin from Page 2, business performance highlights. As of the end of September 2025, the group's CET1 ratio was preliminarily estimated at 13.56%, maintaining a stable level. It results from our unending RWA management effort combined with robust profit generation despite the won depreciation and growth in loan assets for future preparedness.

Based on this, Board today resolved on cash dividend of KRW 570 per share for the third quarter. Shareholder return in 2025 is expected to be around KRW 2.35 trillion with KRW 1.1 trillion in cash dividend plus KRW 1.25 trillion in share buyback.

The shareholder return policy is expected to remain unchanged in the foreseeable future given the stable CET1 ratio and financial soundness.

In Q3, the group's net income was KRW 1.4235 trillion despite the decrease in securities-related profits as credit costs were well under control. The cost/income ratio also remained stable. Credit cost ratio stood at 46 bp, up 2 basis points year-on-year, but has generally improved, decreasing Q-o-Q. But whether the asset quality will turn around to decreasing trend, we will have to wait and see due to current combination of factors such as uncertainties in the macro environment and domestic economy.

Next is Page 3, capital. As explained earlier, the group's CET1 ratio was kept at 6 bp lower Q-o-Q, thanks to stable net income despite the numerous factors driving up RWA. The group's RWA increased by KRW 8 trillion Q-o-Q, driven by growth in foreign currency-denominated RWA due to won depreciation and loan-driven asset growth. We will keep our utmost focus on maintaining a stable capital adequacy ratio by supplying sufficient funds where and when needed, while improving internal efficiency and strategic resource allocation.

Please refer to the slide for details on assets and liabilities on Page 4.

Page 5, group's profit and loss. The group's Q3 net income was managed at 8.1% decline Q-o-Q. There was a decline in securities-related profits, reflecting market rate movements, but credit cost was well controlled. ROE and ROTCE, key indicators in corporate value enhancement plan, rose by 0.7 percentage points, respectively Y-o-Y to 11.1% and 12.5%. I will go into more details by item from the next page.

Page 6, interest income. Group interest income rose by 2.9% Q-o-Q, thanks to profitability-based asset growth and active margin control. The bank's loan in won increased by 2.7% Q-o-Q. The retail sector grew by 3.1%, primarily driven by policy funds on the back of growing market demand, while the corporate segment grew by 2.3% through proactive funding, also thanks to the active growth strategy from July. Please refer to Page 26 for further details.

The bank's NIM rose to 1.56%, up 1 bp Q-o-Q. Although the interest-bearing asset yield fell by 12 bps Q-o-Q, reflecting market rates, including won-denominated loans, it was more than offset by the improvement in funding cost.

Next page, noninterest income. The group's noninterest income decreased Q-o-Q, reflecting market conditions. Gains on securities, FX and derivatives declined, while fees remained stable. Credit card fees decreased Q-o-Q due to increased promotional expenses in response to seasonal factors like the Chuseok holidays, but brokerage fees, IB-related fees and product sales fees, including funds, surged Q-o-Q on the back of recent capital market activities. Insurance-related profits decreased by 2.4% Q-o-Q, but profitability remained stable, thanks to scaled up CSM management.

Moving on Page 8, group's SG&A expense and credit costs. Group's SG&A increased by 2.2% Q-on-Q due to recognition of voluntary retirement costs at Shinhan Card. However, CIR on a cumulative basis remained stable at 37.3%, maintaining a sound level.

Credit cost decreased by 30.1% quarter-on-quarter, reflecting the expiration of corporate credit rating impacts recognized in the previous quarter and the group's continued efforts to manage asset quality.

Additional provisions arising from the government-led real estate PF workout plan also decreased significantly Q-on-Q, remaining within our anticipated range. Credit risk among corporate has risen due to delayed economic recovery and challenges persist among vulnerable customer segments. Along with timely funding, more prudent asset quality management will be needed.

Turning to Page 9, here are the group's asset quality indicators. Group's NPL coverage ratio declined by 2.9 percentage points quarter-on-quarter as the balance of substandard and below loans in the nonbank sector increased. However, the bank's NPL coverage ratio improved by 12.17 percentage points quarter-on-quarter, supported by the NPL sales and strengthened asset quality management. Delinquency ratio at both the bank and card are also gradually improving. Detailed information on the group's loss absorption capacity NPL sales provided on the following page.

Page 11 is profit and loss of our subsidiaries and overseas businesses. Shinhan Bank's earnings declined slightly from the previous quarter, impacted by noninterest income factors, including marketable securities. For details, please refer to Page 21.

Shinhan Card posted higher earnings over previous quarter despite the decrease in merchant fee income and recognition of voluntary retirement cost, thanks to reduced credit cost supported by improved asset quality.

Shinhan Securities earnings decreased Q-on-Q due to lower product management income. However, the company continues to restore its structural earnings capacity year-on-year through enhanced competitiveness in its core business areas.

Shinhan Capital continued to face pressure on funding and credit cost showing a subdued performance.

Specialty credit subsidiaries, including card and capital, are steadily improving fundamentals through asset rebalancing and various self-help measures and are expected to gradually recover profitability.

Overseas services delivered differentiated results in Q3, particularly in Japan and Vietnam despite ongoing domestic and global uncertainties.

Page 12 through 13 summarize our performance in digital initiatives and sustainable management activities.

From Page 15 to 18 are the progress of our corporate value-up plan.

Overall, the group has achieved solid results in terms of execution, speed and outcomes compared with the plans announced last year and early this year. Please refer to the materials for detailed information.

From Page 18 onward, we will find details on the financial status, P&L and funding and investment operations of each subsidiary.

Korean financial industry faces challenge, a productive financial transformation to support Korea's economic recovery and sustainable growth. Forward, Shinhan Financial Group will continue its consistent approach of allocating resources to corporate finance while providing timing and efficient funding. We will lead in fulfilling the financial industry's core role in intermediating capital management, managing risk and supporting growth.

This concludes our presentation. Thank you very much for your attention.

Thank you very much. And now we will take your questions. [Operator Instructions] And now we will take your questions.

The first question will be delivered by Mr. Jung Jun-Sup from NH Securities.

I am Jung Jun-Sup from NH Securities. So I have 2. Now first is about the capital policy. So the government recently is talking about the dividend payout, the separation taxation and then also the similar in other industries as well. So now then in terms of the dividend tax, then I wonder whether related to the dividend tax, have there been any discussions about changes in the group's dividend policy?

And then second is about the loan. So the government continues to control the household loans. And I believe that there has been a bit of an excess in the quota that has been given. Then also more recently, now the deposits are also appearing to decline. So it seems as if both the loans and deposits are unlikely to grow much in the future. Then looking ahead to the fourth quarter and beyond, then what would be the outlook for the group's loans and deposits? And also, how does the group intend to respond to these changes?

Thank you very much for the questions. And please wait a moment for us to prepare our response.

Thank you very much. So there were 2 questions. Now first, about the capital policy, I will respond to that. And then now with regards to the loan and deposit outlook for the longer term, then that will be responded to by the bank's CFO.

Now first, about the capital policy. So you talked about the dividend payout separate taxation and then the non-tax dividend payout. And then first, regarding this, we have had some discussions at the BOD. So through the workshop, we have discussed the shareholder return policy. But given the fact that we have yet to come up with the business plan for next year, we have not made any decisions.

But of course, having said that, now with the dividend payment separate taxation then now also to broaden the individual shareholders, now in order to be in alignment with the taxation policy, then we also intend to slightly increase the dividend payout.

Having said that, now there's a number of indicators for our shareholder return policies. So for example, shareholder -- the share buyback and cancellation. So even if we do that, then this will not be undermining each of our policies. So we would also look into that.

And next is about the tax-exempt dividend payout. And yes, we have also discussed this several times. And yes, we do have some profit available for dividend payout. But then now, looking at the industry trends then, now yes, there is also this kind of a dividend payout that is [indiscernible]. So we would have to wait and see, but we would also be positive about the changes as well.

With regards to these overall changes, I do believe that we will be coming to some kind of decisions as the Board has to come up with the business plan for next year. But then overall, I can say that we are positive about both aspects.

Thank you very much. And now this is the CFO of the bank. So the question was about the deposits and loans. So now first, about the loans, then now in the first half, now given the fact that we have grown in the previous year, so we were conservative in terms of our loan growth outlook. So that was for the corporate loan.

And then now for also loan, then -- now there was also some increase. And then also, yes, in terms of the banks, then we are a bit over the guidance that was given by the government. But then for the fourth quarter, I do believe that we will be in line with that.

And then now for the corporate loan, as I have mentioned earlier, now there was some conservative growth in the first half. But then now in the third quarter, then there was over KRW 1 trillion growth in the corporate loan. And then now for the year, then we were actually planning for about KRW 9 trillion growth. But then now so the actual utilization will be about KRW 7 trillion to KRW 8 trillion. Then also the loan is in won so we were planning for about 5% growth. But then now for the year 2025, we will be growing by about high [indiscernible] so not too different from the plan. Then we're looking ahead to next year for the [indiscernible] loans growth.

Now for the household loan, obviously, there are a number of regulations [indiscernible] specific environment for this. So it is not likely for the household loan to grow very [indiscernible] But then yes, there would also be some policy funds to be provided by the government.

Then now for the corporate loans, then now compared to this year, so to be in line with the government's policy like the productive finance, I do believe that there will be more growth than this year. But having said that, next year, it is likely to be around 5% to 6% next year.

And then about the [indiscernible]. And for this series, there were also some discussions about the deposit. And this is, of course, funding is very important. And also the cost management is also very important. So now then for this year, so we have also focused on the funding control to also defend the NIM. But then also, on the other hand, we also need to ensure funding stability. So yes, we also have a funding management strategy.

Now in the fourth quarter, yes, there are -- for the traditionally, now this is the funding maturity period for the bank. So we are also making preparation. And also, the question was some concerns about the expected difficulties for the deposit. And yes, for the individuals and for example, the time deposit, it is being reduced, but then now we also are managing the interest rate quite tightly. So next year, next year perhaps, you can have more appropriate management of the interest rates so that we will be able to have stable funding.

And then also last part of the question, so about funding moving to the capital market and how the group is making the decision for this. Now as the bank's CFO has mentioned, so it seems as if there is a little change in terms of the capital flow in and outside of the bank. But then now, we can see that now for the money flow, so we see that it continues to be stable. But now in terms of the resource allocation, now for the next year and rather than the resource allocation in the bank, we would also allocate more resources to the capital market, and we intend to be flexible depending on the market circumstances.

I hope that answered your question. We will move to the next question. [Operator Instructions]

HSBC's Won Jaewoong, you have a question. Please go ahead.

Thank you for good results. Now looking at Page 9, the bank delinquency rate seems to be staying stable. So I was fairly encouraged by that. Now then such trend in fourth Q do you think will continue also for the next year also? That's my first question.

The next question is that card delinquency rate in the third Q, it dropped significantly. So the public will [indiscernible] support coupon, may that happen? Or on the card side, do you think there is also signs of stabilization?

And the next question is about the credit cost. Now this year, the guideline was about mid 40 bp. I do believe that was your target range. Then in the third Q, you managed quite well, given that in the fourth Q, seasonality makes that we need more provisioning. So I think it could creep up. And does that mean that the credit cost needs to be expected higher than anticipated and fourth Q one-off provision, it's not going to be that high. That's my question.

Well, thank you for your question. While we prepare for the answer, please bear with us.

Yes. Thank you for that question. Now in terms of the asset quality prospects and second was related to credit costs. About credit cost, I will answer first. And about the asset quality on the overall situation, Group CRO, will respond to that. And Banks and Card CFO will talk about banks and cards asset quality related and respectively.

Now in terms of guidance on credit costs, if I may give you the conclusion first. As I said, the mid-40 bp in the first half earnings call, I think it's going to hold for the coming period also. Of course, seasonality require more provisioning. But if our simulation shows that within this range, the mid-40 bp range would cover everything. Of course, in the future, on a short-term basis, there could be some unforeseen circumstances, but in the current position, I believe the mid-40 bp range still stands going forward.

And I'm CRO. Let me give you overall response to the asset quality. So bank delinquency rate, yes, you said it was stabilizing. So on a group level, not only bank, but for all of our subsidiaries, including nonbank side. In terms of asset quality, I think we are seeing signs of flattening. But as you know, there's a lot of uncertainties in terms of economic outlook and also there's also other external uncertain factors, including tariff situation.

So in terms of now the prices and the current policies again are all uncertain. So the flattening, whether it will go down further, I think it's only to make any judgment. So fourth Q up to the first Q of next year, we just have to wait and see. So we will maintain the current trend up to that time, then I think the result will be positive. That's our anticipation. And as you know, on the banking side, on the banking sector, in Korea, we are one of the relatively best in terms of asset quality. So we will try best to maintain that.

Yes, I'm CFO of the Bank. So if I may add on a response to the CRO. So for Shinhan Bank, when it comes to asset quality, up to a few years ago, among the top 4 banks in Korea, we were actually falling a bit short. So asset quality, of course, is very important, while continuing growth is also important.

So we have made various efforts for asset quality, like credit risk system, the management, the portfolio level. And as a result, among the top 4 banks, delinquency and other things are very much staying positively. But as the CRO stated, asset quality or delinquency rate, whether it has become stable, it's too early to say.

But flattening, it seems to be continuing, but I think we need to keep our guards up. So within first half of next year up to that period, we have to keep close tab on the asset quality and manage it tightly. Additionally, on the banking side, the credit cost, we are managing on the bank level also. So on the fourth Q, when it comes to credit cards, we will implement more prudent policies. That's my opinion. Thank you very much.

So my -- I'm Card CFO. So the card delinquency ratio, we look at on a monthly basis and keeping close tabs on it. So we also look at the new loans that become delinquent. So it peaked in 0.45%, but it improved to 0.41% in September because of the public relief fund that you talked about that increased small merchant sales, thereby improving the overall finances of the small merchants.

But going forward, the government will continue to support small merchants and self-employed. So we have to keep a close watch on that. For example, in the past, for a small merchant, low interest rate lending, they said they will put about KRW 10 trillion toward that. So if the policy continues, in the pandemic era, that also improved the situation. So we think that will be something we will also see here also. Thank you.

Thank you very much. I hope that has answered your questions, and we will take the next question. [Operator Instructions]

So there are -- yes. Yes, there is a question. From Hanwha Securities, we have Kim Do Ha.

I'm not sure whether it is a question that would have a specific answer, but I would just like to get your thinking about these topics.

So now look at the slides, for the first time in a while, I could see that the interest spread. So it was rising by 3 bp. So from last May to this year, then we see that the interest rate was falling, but then it seems as if considering the circumstances, you were able to really defend the margin. Now then for next year, then if this is the trend, then we need to think about a higher margin next year?

And also it seems as if the securities performance is also very good. So then in terms of the resource allocation for next year, then I wonder whether the shareholder return increasing, whether that will be the end all? But then for example, if the margin is going to be better or if the securities profitability is better, then perhaps you can allocate more for growth? So yes, I know that this is a question that defies an easy answer, but then I was just wondering what the group is thinking. So that is all.

Thank you very much for the questions. And yes, please give us a moment to prepare our response.

Thank you very much for the question. And yes, the question that you have raised is actually what we have been thinking for quite some time. So first of all, about the interest spread. Now this is what I would think. So first of all, the policy rate was cut twice this year and then also for the year, then we believe that there is going to be one more cut. And then now we see that, yes, gradually, the interest rate is falling. But then when we look at the market rate, then looking at the usage and also in Korea and then also the FX, so considering other circumstances, then the interest rate taking a clear fall is not really for certain. So that is something that we needed to consider. So yes, the margin perhaps compared to what we have thought last year, the margin did not fall as much as we had expected.

Now that is for the short term, but then now for the longer term then both in the U.S. and Korea, then at least 50 bps or even more than 70 bps. So the prevalent view is that it is going to fall by over 70 bps. So then for the longer term, the interest rate is likely to come down. So then looking at the profit and loss for the end of September, then we can see that the interest rate increase was much lower than the overall revenue increase. So right now, we are just defending the interest income, but then over the long term, we believe that the interest income is likely to fall. So we need to be more conservative about this outlook.

On the other hand, what we are more positive about is now on one hand, yes, there is the capital market and also the noninterest income, which is doing much better. So for example, brokerage and also the IB, so the noninterest income is actually quite sturdy. So those are also the areas, the businesses where we must have in order to keep growing. So we will continue to encourage that.

But then in terms of the resource allocation, as I have mentioned earlier, basically, in terms of the allocation for growth, now compared to this year for next year, then rather than in the bank, the allocation would be heavier for the capital market is the direction for next year. But then again, in terms of the allocation for the growth then, now in terms of the shareholder return policy, so we have already stated the target for the shareholder return. So we will keep to this commitment. But then now the ROE continues to improve, but then also compared to the COE that we have, then it is still lower. So again, we will be flexible about this. But again, overall, the direction is to follow the plan for corporate value enhancement.

And then also for the asset growth because the nominal growth is very low. So I mean there is a limit to how much we can pull this up. So in terms of the resource allocation, we will remain with the current framework. But then now in terms of the specific allocation, there could be more -- a bit more allocation to the capital market to be in line with the market circumstances. That is all. Thank you.

Thank you. I hope that has answered your question, and we will take the next question.

So next is Kim Jiwon from DAOL.

So CET1 ratio is my -- about -- my question. So it seems the lending side has grown. So as you said, RWA, it's relative though on the household lending, and you said that will be in alignment with government policy. But as being higher on the corporate side, you said that there will be more growth. And for us, RWA overall management strategy, how is going to see that going forward? And is there any factors where you could grow CET1 ratio further -- CET1 ratio further going forward?

Please wait as we prepare an answer to your question.

So RWA and also the future directionality of the -- that. So RWA, we have grown slightly in the Q3. So it looks -- it's higher than the first half. But if you look at the ratio of the growth compared to the previous year, it's still on the lower side. So on the third Q, RWA has grown slightly, but on a yearly basis, compared to the initial expectation of its growth, I think it will be lower than the expected. And going forward, the RWA growth rate, the recurring growth rate would stay on the path of the [ current ] year.

And internally, if you take a deep dive for the household lending for the second and third Q because there was high market demand. However, due to regulatory environment now, household lending, I do not think, can grow further. Then on the corporate side, there will be the growth driver for us. But as you know, relatively speaking, corporate side, we have also allocated resources a lot in this area. So the corporate loan in terms of the share will grow, but it will be managed with the overall framework that we have.

And in terms of CET1 ratio, compared to last year, this year, the level is a bit higher. So due to various variabilities that is anticipated, we increased it a bit. CET1 ratio, it's not always high being the better. So in terms of capital efficiency, the current mid-13% range is the adequate level. But by Q4 seasonality, there will be less earnings given so it will dip a bit from the current level. But on a yearly basis, we said the base will be 13.1%, but it will be managed in a higher level than that. Anyway, the CET1 ratio be it in the asset growth or it's a key in the shareholder return policy. So we maintain the base, but would also give a lot of buffer so they can be managed on a stable level.

Thank you very much for the response, and we will take the next question. [Operator Instructions]

So there are currently no questions requested. So it seems as if there are no further questions. And then with that, we will conclude the 2025 third quarter earnings release conference call by Shinhan Financial Group. You can find today's presentation at our web page as well as the Shinhan Financial Group IR YouTube channel. If you have any further questions, then please contact the IR team. And we will see you again in February next year for earnings release for the year of 2025. Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]