Shinhan Financial Group Co Ltd (SHG) 2025 Q1 法說會逐字稿

Good afternoon. This is Cheol Woo Park, Head of IR at Shinhan Financial Group. Thank you very much for joining the 2025 Q1 earnings presentation of Shinhan Financial Group. Today we have our Group CFO, Sang Yung Chun; Group CSO, Seok Heon Goh; Group CRO, Dong-kwon Bang; Shinhan Bank CFO, Jeongbin Lee; Shinhan Card CFO, Haechang Park; Shinhan Investment Securities CFO, Jeonghoon Jang; and Shinhan Life CFO, Sunghwan Joo also attending.

午安.我是新韓金融集團投資者關係主管 Cheol Woo Park。非常感謝您參加新韓金融集團2025年第一季業績發表會。今天我們邀請了集團財務長 Sang Yung Chun；集團首席策略長 Seok Heon Goh；集團財務長 Dong-kwon Bang；新韓銀行財務長 Jeongbin Lee；新韓卡財務長 Haechwan Jang Park；新韓投資證券財務長 Jeonghoon Jang；新韓生命財務長 Sunghwan Joo 也出席了會議。

We will start with an update on the progress of the Value-Up Plan that we had announced in July and give you some details of what we have in plan this year before taking you through our Q1 business results. After the presentation, we will open the floor and receive your questions.

我們將首先介紹 7 月宣布的價值提升計劃的進展情況，然後向您介紹我們今年的計劃細節，最後向您介紹我們第一季的業務成果。演講結束後，我們將開放發言並接受您的提問。

From now, our Group CFO, Sang Yung Chun, will take you through the presentation.

從現在開始，我們的集團財務長 Sang Yung Chun 將帶領您完成示範。

Good afternoon. Thank you for joining the Shinhan Financial Group 2025 Q1 earnings presentation. Before looking at our Q1 results, I would like to start from Page 2 and explain the 2025 Value-Up Plan, which was publicly disclosed today.

午安.感謝您參加新韓金融集團2025年第一季財報會。在查看我們的第一季業績之前，我想從第 2 頁開始解釋一下今天公開披露的 2025 年價值提升計劃。

The 2025 Value-Up Plan is based on the results of '24 implementation assessment led by the BOD as well as diagnosis of the appropriateness of existing targets and newly established near-term targets and execution plans for 2025.

2025年增值計畫以董事會主導的2024年實施評估結果以及對現​​有目標和新制定的2025年近期目標及實施計畫的適當性診斷為基礎。

Looking back on 2024 performance, group ROE fell YoY due to decrease in nonbank affiliate earnings, but the CET1 ratio remained above 13% every quarter despite greater market volatility. That said, considering CET1 sensitivity to macro volatility and uncertainty, current management levels were found somewhat tight.

回顧2024年的業績，由於非銀行關聯企業獲利減少，集團ROE年減，但儘管市場波動加劇，CET1比率每季仍維持在13%以上。話雖如此，考慮到 CET1 對宏觀波動和不確定性的敏感性，當前的管理水平有些緊張。

In shareholder return, active share buyback last year reduced number of outstanding shares to less than 500 million shares as of end of last year, boosting our shareholder return ratio to 40.2%. Based on such performance review, we decided to maintain the original targets covering until 2027, while establishing the following plans for 2025, which will be the first year of proper implementation of our Value-Up Plan.

股東回報方面，去年積極回購股份，使流通股數減至去年底不足5億股，股東報酬率提升至40.2%。基於此績效評估，我們決定維持原定目標直至2027年，同時為2025年制定以下計劃，2025年將是我們的「價值提升計劃」正式實施的第一年。

First, we plan to improve ROE by more than 50 bp YoY through a stable bank earnings and structural improvement of non-bank businesses. Second, we plan to unlock additional capital capacity through efficient asset management.

一是計畫透過穩定銀行獲利、改善非銀行業務結構，使ROE年增50個基點以上。其次，我們計劃透過高效率的資產管理來釋放額外的資本能力。

We aim to maintain CET1 ratio at 13.1% or above, which is 10 bp higher than the existing target level and giving us greater flexibility. Third, given the current PBR levels, which are heavily undervalued, buyback and cancellation will be the focus for a faster pace shareholder return program to increase shareholder return ratio to 42% or above in 2025.

我們的目標是將普通一級資本充足率維持在 13.1% 或以上，這比現有目標水準高出 10 個基點，並賦予我們更大的靈活性。第三，鑑於目前的市淨率水準被嚴重低估，回購和註銷將成為加快股東回報計畫的重點，以在2025年將股東回報率提高到42%或以上。

To achieve this Value-Up Plan in 2025, with better execution, we will operate key action initiatives, including structural improvement of non-bank businesses, efficient asset management, and stronger links between evaluation and compensation. For details, please refer to the publicly disclosed materials.

為更好地實現2025年增值計劃，我們將實施非銀行業務結構性改善、資產管理高效化、考核與薪酬掛鉤等重點行動計劃。詳情請參閱公開揭露資料。

Pages 3 through 5 shows the Value-Up Plan progress as of end of Q1 this year, and we plan to keep you updated each quarter using the same format.

第 3 頁至第 5 頁顯示了截至今年第一季末的增值計畫進度，我們計劃每季使用相同的格式向您通報最新情況。

Now to turn to Page 6 for our Q1 business results, starting from the business highlights. 2025 Q1 tentative group CET1 is 13.27%, which is 21 bp improvement YTD. Despite the effects of Basel III group-wide RWA reduction efforts and solid earnings growth from the banking business contributed to the healthy CET1, and based on this, the BOD today resolved on Q1 cash dividend of KRW570, which is a 31% increase QoQ.

現在翻到第 6 頁，查看我們的第一季業務業績，首先介紹業務亮點。2025 年第一季暫定集團 CET1 為 13.27%，年初至今已提高了 21 個基點。儘管受到巴塞爾協議 III 集團範圍內風險加權資產削減措施的影響，銀行業務的穩健盈利增長仍對健康的 CET1 做出了貢獻，基於此，董事會今天決定第一季度派發 5.7 億韓元的現金股息，比上一季增長 31%。

Regarding share buyback out of the KRW650 billion plan for the first half, buyback of KRW285.7 billion has been completed as of end of March, and among this, KRW150 billion announced last year is scheduled for cancellation late April and the rest is scheduled for cancellation by end of June. Q1 group net income was KRW1,488.3 billion, which is a 12.6% YoY increase, thanks to absence of non-operating one-offs and solid growth of interest income.

關於上半年6,500億韓元的股票回購計劃，截至3月底已完成2,857億韓元的回購，其中去年宣布的1,500億韓元計劃於4月底取消，其餘計劃於6月底取消。第一季集團淨收入為14,883億韓元，較去年同期成長12.6%，這得益於沒有非經營性一次性支出以及利息收入的穩定成長。

Page 7 looks at capital. Despite a larger buyback program than previous year through CET1 improved 21 bp YTD based on well-managed RWA and stable net income. Despite the RWA increasing effect of KRW5.4 trillion YTD due to regulation including Basel III, appropriate Korean won loan growth combined with group level RWA control efforts including portfolio rebalancing, limited RWA increased to KRW3.1 trillion YTD. We will continue to focus on maintaining stable capital ratio through internal efficiency and strategic management while sufficiently supplying necessary funds to the right places.

第 7 頁介紹資本。儘管透過 CET1 實施的回購計畫比上年規模更大，但基於管理良好的 RWA 和穩定的淨收入，年初至今仍改善了 21 個基點。儘管受巴塞爾協議III等監管影響，今年迄今風險加權資產增加了5.4兆韓元，但適當的韓元貸款成長，加上集團層級包括投資組合再平衡在內的風險加權資產控制措施，導致今年迄今風險加權資產僅增加3.1兆韓元。我們將繼續致力於透過內部效率和策略管理來維持穩定的資本比率，同時將必要的資金充分供應到正確的地方。

Page 8 looks at assets and liabilities. And we move on to Page 9, which looks at group P&L. Group net income increased 12.6% YoY, thanks to absence of non-operating one-offs and growth of interest income. Based on this ROE and ROTCE key metrics of the Value-Up Plan increased by 1 percentage point YoY, respectively, to 11.4% and 12.9% each. And I will break down the details starting from the next page.

第 8 頁介紹資產和負債。我們轉到第 9 頁，查看集團損益表。由於沒有非經營性一次性支出和利息收入的成長，集團淨收入較去年同期成長 12.6%。基於此，增值計畫的關鍵指標ROE和ROTCE分別較去年同期上升1個百分點至11.4%和12.9%。我將從下一頁開始詳細說明。

On to Page 10 for our interest income. Despite falling market interest rates, our group interest income increased by 1.4% year on year, driven by the average balance effect from growth in our income-producing assets. Bank loans in won increased by 0.4% versus end of last year, mostly driven by blue-chip SME loans. Please refer to Page 27 for details.

請參閱第 10 頁以了解我們的利息收入。儘管市場利率下跌，但受創收資產成長帶來的平均餘額效應推動，集團利息收入較去年同期成長 1.4%。韓元銀行貸款較去年年底增加 0.4%，主要由藍籌中小企業貸款推動。詳情請參閱第27頁。

For bank NIM, although the yield on interest-bearing assets including loans in won dropped 12 basis points QoQ, nonetheless, we saw alleviated funding pressure amid adequate asset growth under our broad profitability management stance and seasonal deposit inflows, on balance improving NIM by 3 basis points QoQ. Group NIM was also improved by 5 basis points QoQ, thanks to the increase in bank NIM.

對於銀行淨利差，雖然包括韓元貸款在內的生息資產收益率環比下降了 12 個基點，但在我們廣泛的盈利管理立場和季節性存款流入下，資產增長充足，資金壓力有所緩解，總體而言，淨息差環比提高了 3 個基點。由於銀行淨利差的增加，集團淨利差也較上季提高了 5 個基點。

Next on to non-interest income. Group non-interest income decreased 6.3% YoY from a decline in commission and insurance-related income. Credit card fee income were impacted by an increase in proactive customer acquisition marketing spend, while brokerage commissions were also down YoY as brokerage trading volume decreased amid market uncertainties.

接下來是非利息收入。由於佣金和保險相關收入下降，集團非利息收入較去年同期下降 6.3%。信用卡手續費收入受到主動客戶獲取行銷支出增加的影響，而經紀佣金也因市場不確定性導致經紀交易量下降而較去年同期下降。

However, we continue to achieve growth in interest fee income from fund and bancassurance sales centered around our bank business. Also, despite the challenging environment, quite encouragingly investment banking commissions recorded growth on both a YoY and QoQ basis.

然而，我們以銀行業務為中心的基金和銀保銷售的利息費收入持續成長。此外，儘管環境充滿挑戰，但令人鼓舞的是，投資銀行佣金年比和季比均實現成長。

In Q4, amid rising external internal uncertainties, income from marketable securities, FX, and derivatives was very poor, but has since recovered back to more recurring levels, reflecting lower market rates. Other insurance-related income showed a decline YoY. This was due to the high base effect from last year where insurance sales were quite brisk. Otherwise, it's being managed at a stable level.

第四季度，在外部內部不確定性上升的背景下，有價證券、外匯和衍生性商品的收入非常差，但此後已恢復到更經常性的水平，反映出較低的市場利率。其他保險相關收入較去年同期下降。這是由於去年保險銷售相當活躍的高基數效應。否則，它將被管理在穩定的水平。

Next, moving on to SG&A and credit costs. Group SG&A is stable with nothing notable versus last year. Cost-to-income ratio was up 1.4 percentage points YoY, recording 37.3%. For credit costs, even though additional provisioning for real estate PF loans fell, there was an increase in recurring provisioning, reflecting the economic cycle, resulting in a 15.4% increase YoY.

接下來，討論銷售、一般及行政費用 (SG&A) 和信貸成本。集團銷售、一般及行政開支保持穩定，與去年相比沒有顯著變化。成本收入比年增1.4個百分點至37.3%。對於信貸成本，儘管房地產公積金貸款的額外撥備減少，但經常性撥備有所增加，反映了經濟週期，導致同比增長15.4%。

As a result, group nominal credit cost recorded 41 basis points, up 3 basis points YoY, while recurring CCR was 38 basis points, up 8 basis points YoY. As we move forward, while credit costs related to real estate PF is expected to stabilize gradually, corporates will likely face greater credit risk from delayed economic recovery and vulnerable customers may become increasingly challenged.

因此，集團名目信貸成本為 41 個基點，較去年同期上升 3 個基點，而經常性 CCR 為 38 個基點，較去年同期上升 8 個基點。展望未來，雖然預期與房地產金融相關的信貸成本將逐步穩定，但企業可能會因經濟復甦延遲而面臨更大的信貸風險，弱勢客戶可能會面臨越來越大的挑戰。

So overall credit cost in terms of size may be slightly greater than our initial expectations, while recovery may take longer. However, we have already built up sufficient loss-absorbing capacity and will enforce even closer monitoring and control for soundness and keep credit costs well under control within the limit of our established business plans. Please refer to Pages 13 and 14 for details on group asset quality and loss absorbing capacity.

因此，整體信貸成本從規模來看可能略高於我們最初的預期，而復甦可能需要更長的時間。然而，我們已經建立了足夠的損失吸收能力，並將實施更嚴格的穩健監控，並將信貸成本控制在既定業務計劃的限度內。有關集團資產品質及損失吸收能力的詳情，請參閱第13頁及第14頁。

Moving on to our group and overseas business earnings, Page 15. For bank, thanks to solid interest income and balanced portfolio, we saw improved fee and marketable security income driving overall performance for the broad group. For Shinhan Card and Capital, as profitability was impacted due to regulatory change and still high-interest rate environment, both continued sluggish performance with pressure on both the funding and credit cost side.

繼續介紹我們的集團和海外業務收益，第 15 頁。對於銀行而言，由於穩健的利息收入和均衡的投資組合，我們看到費用和可銷售證券收入的提高推動了整個集團的整體績效。對於新韓卡和資本而言，由於監管變化和高利率環境的影響，獲利能力受到影響，兩家公司的業績持續低迷，在融資和信貸成本方面都面臨壓力。

For investment securities, despite increased market uncertainty, we saw gradual recovery in recurring earning power, driven by top-line performance in IB fee income and marketable securities. Insurance continues to deliver consistent performance given last year, thanks to stable KICS ratio.

對於投資證券，儘管市場不確定性增加，但我們看到經常性獲利能力逐漸恢復，這得益於 IB 費用收入和有價證券的營收表現。由於 KICS 比率穩定，保險業務繼續保持與去年相同的穩定表現。

For Asset Trust business, which recorded a loss last year from large loan loss provisioning, with completion guarantee, real estate trust exposure has turned to profit. Overseas business, we're seeing solid performance trends from Vietnam, Japan this year as well.

資產信託業務去年因提列大額貸款損失準備而出現虧損，但在完成擔保下，房地產信託業務已扭虧為盈。海外業務方面，今年我們也看到越南、日本的業績表現穩健。

From Pages 16 to 18, we outlined the performance on digital and sustainability initiatives. Page 16 provides details on the main digital indicators that we have shared every quarter. Page 17 provides details on the Jeju Bank ERP banking initiative, which you may be interested in. Page 18 outlines our efforts in terms of greenhouse gas emissions reductions, also more on our inclusive and win-win financial initiative as well.

從第 16 頁到第 18 頁，我們概述了數位化和永續發展計畫的表現。第 16 頁詳細介紹了我們每季分享的主要數字指標。第 17 頁提供了有關濟州銀行 ERP 銀行計劃的詳細信息，您可能會感興趣。第 18 頁概述了我們在減少溫室氣體排放方面的努力，以及更多有關我們的包容性雙贏金融舉措的資訊。

From Page 19, we list the detailed financials and performance of the respective affiliates so please refer to the slides. Recently, the Korean economy faces structural issues as well as many internal and external challenges, which represent a complexity of challenging issues, including poor domestic and export demand, attraction on corporate investment in tranche loan growth.

從第 19 頁開始，我們列出了各個附屬公司的詳細財務狀況和業績，請參閱投影片。近期，韓國經濟面臨結構性問題以及許多內外挑戰，呈現出內需與出口需求不振、分期貸款成長對企業投資吸引力下降等一系列複雜挑戰。

Our core role as a financial group is as a financial intermediary that supports the real economy, working in coordination with the policy authorities. We want to go beyond just the passive intermediary, and we're looking to be more proactive across many fronts to provide preemptive liquidity to competitive corporates and allocate capital to productive sectors of the economy to support recovery of the real economy and help resolve the issues confronting Korea.

我們金融集團的核心角色是發揮金融中介作用，支持實體經濟，配合政策部門。我們希望超越被動中介的角色，尋求在多個方面更加積極主動，為有競爭力的企業提供優先流動性，並將資本配置到經濟的生產部門，以支持實體經濟的復甦，並幫助解決韓國面臨的問題。

Also as a value-up leader and as a major player in the capital markets, we will faithfully implement our corporate value-up commitments to the market, building on the customer trust and solid underlying fundamentals.

同時，作為價值提升的領導者和資本市場的主要參與者，我們將在客戶信任和堅實基本面的基礎上，忠實履行對市場的企業價值提升承諾。

Thank you very much for your attention.

非常感謝您的關注。

Thank you very much for the presentation. Now we will receive your questions. English questions will be consecutively interpreted into Korean. So please wait for a moment for that translation.

非常感謝您的演講。現在我們將接收您的提問。英語問題將連續翻譯成韓語。因此請稍等片刻以便進行翻譯。

Jaewoong Won, HSBC.

Jaewoong Won，匯豐銀行。

Well, despite the difficult situation, you've delivered good performance. And also, you've shown a lot of effort for shareholder value. Thank you very much. I have two questions. First is group NIM. Your full-year guidance was that NIM may drop by about 7 to 8 bp. But looking at Q1, actually, in Q1, your group NIM went up by 5 bp. So what about the full-year outlook? Do you see the need to change your full-year NIM outlook, or can you give us your expectations of how NIM would move throughout the year?

嗯，儘管情況很困難，但你仍然表現出色。而且，您為了股東價值付出了很多努力。非常感謝。我有兩個問題。首先是 NIM 集團。您的全年指引是，NIM 可能下降約 7 至 8 個基點。但看看第一季度，實際上，在第一季度，你們集團的淨利差上升了 5 個基點。那麼全年前景如何？您是否認為有必要改變全年 NIM 展望，或者您能否告訴我們您對全年 NIM 走勢的預期？

My second question is about asset quality. We do see signs of asset quality deterioration, not only at Shinhan, but across all banks. Your NPL coverage ratio has dropped from 143 to 129, a large drop. The current NPL coverage ratio, do you think there is additional downside room there? Or do you think that current levels you'll be able to keep? I would appreciate your thoughts on that.

我的第二個問題是關於資產品質。我們確實看到了資產品質惡化的跡象，不僅是新韓銀行，而是所有銀行都有這樣的情況。你們的不良貸款覆蓋率從143下降到了129，下降幅度很大。就目前的不良貸款撥備覆蓋率而言，您認為還有進一步下行的空間嗎？或者您認為您能夠保持目前的水平嗎？我將非常感激您對此的想法。

Thank you very much for those two questions. Please give us a moment to prepare our answer.

非常感謝您提出這兩個問題。請給我們一點時間準備答案。

Well, thank you very much for that question. Regarding the NIM outlook, and the second question was about asset quality. I think for NIM, it's best for our bank CFO to mention that. And regarding the asset quality, I myself and our group CRO will take the question.

嗯，非常感謝您的提問。關於淨利差前景，第二個問題是關於資產品質。我認為對於 NIM 來說，最好由我們的銀行 CFO 提及這一點。關於資產質量，我本人和我們集團的 CRO 將回答這個問題。

This is Jeong Bin Lee, the CFO of Shinhan Bank. You've asked about our NIM. First of all, I'll answer based on bank NIM, which increased by 3 bp QoQ. Group NIM increased by 5 bp QoQ. And the reason why it went up is that on the lending side, market rates did come down, so loan profitability is declining.

我是新韓銀行財務長 Jeong Bin Lee。您詢問了我們的 NIM。首先，我將根據銀行淨利差來回答，該淨利差環比增加了 3 個基點。集團淨利差較上季增加 5 個基點。而它上漲的原因是，在貸款方面，市場利率確實下降了，因此貸款獲利能力正在下降。

That said, we also have the growth lever that we can use. So by maintaining loan growth at appropriate level, we are able to somewhat defend or offset the decrease in loan yields. And then in Q1, the funding side -- the funding cost decreased because there were some core deposits that increased and overall finding scale was decreased. This decreased our funding cost and that resulted in the increase of our NIM in Q1.

也就是說，我們也有可以利用的成長槓桿。因此，透過將貸款成長維持在適當水平，我們能夠在一定程度上抵禦或抵消貸款收益率的下降。然後在第一季度，融資方面——融資成本下降，因為一些核心存款增加，整體發現規模減少。這降低了我們的融資成本，從而導致第一季的淨利差增加。

Now for the outlook on NIM going forward -- from Q2 going forward, in Q1, we were able to manage our NIM, but market rates do continue to decline. BOK rate is likely to go down further this year. And so we are expecting that the declining market rates will impact our NIM, and we are expecting our NIM to come down.

現在展望未來的 NIM——從第二季度開始，在第一季度，我們能夠管理我們的 NIM，但市場利率確實會繼續下降。韓國央行利率今年可能進一步下降。因此，我們預計市場利率下降將影響我們的淨利差，並且我們預計我們的淨利差將會下降。

That said, we still have the asset side, the loan profitability levers that we can use to defend. And also, we can try to collect more of the deposit-based low-cost funding to maintain our funding cost to defend our NIM as much as possible.

話雖如此，我們仍然擁有資產方面，可以利用貸款獲利槓桿來捍衛自身利益。此外，我們可以嘗試收集更多基於存款的低成本資金，以維持我們的融資成本，盡可能地捍衛我們的淨利差。

So that was the bank CFO that answered the first question on NIM outlook. And as he mentioned, we are entering a rate declining cycle this year. And we still expect our NIM to decrease throughout the year. Our NIM did improve in Q1, and that is a bit of a seasonality. Usually, Q1 has better margins in terms of NIM seasonally.

這位銀行財務長回答了有關 NIM 前景的第一個問題。正如他所提到的，今年我們正進入利率下降週期。我們仍然預計全年淨利差將會下降。我們的 NIM 在第一季確實有所改善，這有點季節性。通常，從季節性角度來看，Q1 的 NIM 利潤率會更高。

But looking at where the BOK rate is expected to go, our views have not changed. But about credit cost, as we mentioned in the presentation, we're expecting the credit cost to go up a little bit. But NIM, maybe the decline will be flatter than what we had originally expected, but that's very cautiously.

但從韓國央行利率預期走向來看，我們的觀點並沒有改變。但關於信貸成本，正如我們在演示中提到的，我們預計信貸成本會略有上升。但NIM，也許下降幅度會比我們原先預期的要平緩，但這是非常謹慎的。

Your second question is about the NPL coverage ratio. Our current coverage ratio number is probably the lowest in the past year or two. This coverage ratio is explained two ways.

您的第二個問題是關於不良貸款撥備覆蓋率的問題。我們目前的覆蓋率數字可能是過去一兩年來最低的。這種覆蓋率可以用兩種方式來解釋。

One, is not only Shinhan, but the overall market is in the lower part of the credit cycle. Recovery is being pushed back and so substandard and below is increasing faster than planned, and that seems to be happening throughout the market.

一是，不僅是新韓銀行，整個市場都處於信貸週期的低谷。復甦正在被推遲，因此不合格和低於標準的情況的增長速度比計劃的要快，而且這種情況似乎正在整個市場發生。

And as you can see on Page 14 of our presentation, when we do provisioning at the end of each year, we do sales. But recently, the NPL sales conditions are not favorable. That's why in end of March, Shinhan Bank sold less NPL than usual, strategically, that was a strategic choice. And that is the reason that decreased the coverage ratio.

正如您在我們簡報的第 14 頁所看到的，我們在每年年底進行撥備時，都會進行銷售。但近期不良資產出售情況並不樂觀。這就是為什麼三月底新韓銀行出售的不良貸款比平時少，從戰略上講，這是一個戰略選擇。這就是覆蓋率下降的原因。

What we have been emphasizing at Shinhan Financial Group level, we always prepare preemptively the loss absorption capacity, and we think that as the coverage ratio at the end of Q1 is most likely our bottom, and so that in Q2 and Q3, our coverage ratio is expected to improve.

我們在新韓金融集團層面一直強調的是，我們始終提前準備損失吸收能力，我們認為，由於第一季末的覆蓋率很可能是我們的底部，因此在第二季度和第三季度，我們的覆蓋率有望提高。

This is the group CRO. If I may add on that answer, the coverage ratio -- when we calculate the coverage ratio, usually, what we do is we -- had we done similar level of NPL sales, our actually, coverage ratio would have been 180%. And so we think that we'll be able to come -- bring it up to 190% at Q3 and 200% NPL coverage ratio by end of this year. That is our management target, and we will follow that plan.

這是集團 CRO。如果我可以補充這個答案，覆蓋率——當我們計算覆蓋率時，通常我們所做的是——如果我們進行了類似水平的不良貸款銷售，那麼我們的實際覆蓋率將是 180%。因此，我們認為我們能夠實現這一目標——到第三季度，不良貸款覆蓋率將達到 190%，到今年年底，不良貸款覆蓋率將達到 200%。這是我們的管理目標，我們將遵循該計劃。

We'll take the next question. Mr. Jung Jun-Sup, NH Investment & Securities.

我們將回答下一個問題。NH Investment & Securities 的 Jung Jun-Sup 先生。

Thank you for the opportunity to ask two questions. First, I think it was addressed before. But in terms of your 42% or more shareholder return target, well, it is in line with your previous targets, the guidance.

感謝您給我這個機會兩個問題。首先，我認為之前已經解決過這個問題。但就您 42% 或更高的股東回報目標而言，這與您先前的目標和指導是一致的。

But given the share prices and the level of shareholder return by other companies, it does appear to be a little bit on the low side, and your capital ratio actually is improving by more than expected. So in terms of managing the pace, as you work towards your 2027 targets, do you have any intention to speed things up a little bit?

但考慮到其他公司的股價和股東回報水平，它確實顯得有點偏低，而且你們的資本比率實際上比預期的有所提高。那麼，在管理速度方面，當您努力實現 2027 年目標時，您是否有意加快一點速度？

And then there were some discussions about different forms of reduced dividends. Could you elaborate more?

然後就不同形式的減少股利進行了一些討論。能詳細說明一下嗎？

Please bear with us as we prepare the answer.

請耐心等待我們準備答案。

In terms of the total shareholder return level and also the pace, 42% was our target. But actually, it's a minimal line. We're talking about 42% or more. As we mentioned during the presentation, regarding our corporate Value-Up program, we are approaching with speed, but the market valuation is quite low in terms of reduction in shares outstanding, whatnot. We are moving a little bit faster than planned.

就股東總回報水準和速度而言，我們的目標是42%。但實際上，這是一條最簡線。我們談論的是 42% 或更多。正如我們在演示中提到的，關於我們的企業價值提升計劃，我們正在快速推進，但從流通股減少等​​方面來看，市場估值相當低。我們的進展比計劃的快一點。

So as we mentioned, regarding our Value-Up program, we do want to speed up our shareholder return program. We will look at overall earnings this year and the market conditions as well. And so a share buyback and cancellation, we are actually open and committed to speeding things up more than our initial plan.

正如我們所提到的，關於我們的增值計劃，我們確實希望加快我們的股東回報計劃。我們將關註今年的整體收益和市場狀況。因此，對於股票回購和註銷，我們實際上是持開放態度的，並且致力於比最初的計劃更快地完成任務。

But as we move out through the second and third quarter, we will have to see the overall earnings circumstances, and the final decision will be made by the Board. But the PBR actually is quite undervalued at the moment. And so we think that as far as shareholder buybacks are concerned, I think it would make sense to move faster than planned. So when we make our earnings call in the third quarter, we will elaborate more about any changes to our plans in terms of shareholder buyback or shareholder returns in the second half.

但隨著我們進入第二季和第三季度，我們將不得不觀察整體獲利情況，最終決定將由董事會做出。但目前 PBR 實際上被嚴重低估了。因此，我們認為，就股東回購而言，比計劃更快地行動是有意義的。因此，當我們在第三季召開收益電話會議時，我們將詳細說明下半年股東回購或股東回報計畫的任何變化。

In terms of capital reduction dividends, the government actually is collecting some views from the industry about tax benefits. So early this year, other companies did announce capital reduction dividends. And so we did give it a light review, and we did have the resources to affect that if we felt it was correct. But we felt that other than retail investors, we have a lot of foreign investors, of course, corporate investors as well.

在減資分紅方面，政府其實正在向業界收集一些關於稅收優惠的意見。所以今年年初，其他公司確實宣布了減資分紅。因此，我們確實對其進行了簡單的審查，如果我們認為它是正確的，我們確實有資源來影響它。但我們覺得，除了散戶之外，我們還有很多外國投資者，當然也有企業投資者。

So the benefits actually could vary depending on the investor. So that was one point of consideration and among others. So first, you take the lead, we prefer just to observe the market developments and approach it slowly. So that was the conclusion of our initial review.

因此，收益實際上可能因投資者的不同而有所差異。這是需要考慮的一點，也是其他幾點。因此，首先，您佔據主導地位，我們更願意觀察市場發展並慢慢接近。這就是我們初步審查的結論。

So anyway, at present, as far as capital reduction dividends are concerned, we do not have any plans at the moment. But we will see what the tax authorities decide later on. Also developments by other companies as well and we will make our decision on balance. And in terms of how we want to return more value to our shareholders, we intend, of course, to be flexible, and we will be open to various measures.

所以無論如何，目前就減資分紅而言，我們目前還沒有任何計畫。但我們將看看稅務機關稍後會做出什麼決定。我們也會考慮其他公司的發展情況，並根據情況做出決定。至於我們如何為股東帶來更多價值，我們當然打算採取靈活的態度，並願意採取各種措施。

I hope that has answered your questions. Do Ha Kim, Hanwha Investment Securities.

我希望這已經回答了你的問題。Do Ha Kim，韓華投資證券。

I have a question about the Value-Up update. I just want to check if I understood correctly, the CET1 ratio this year is 13.1% or above. That seems to be sign of your confidence. But even in April, the authorities have demanded increase of corporate loans. And the pressure could grow stronger as we move throughout the year.

我對 Value-Up 更新有疑問。我只是想確認我是否理解正確，今年的 CET1 比率是 13.1% 或以上。這似乎是你自信的表現。但即使在4月份，當局也要求增加企業貸款。隨著時間的推移，這種壓力可能會越來越大。

I think overall, we are seeing SME loans delinquencies coming up, and credit card delinquencies are coming up faster than we had expected. So if you consider the external environment, considering export companies having difficulty, and looking where we are in the cycle, which may be prolonged, you have raised your hurdle on the capital targets. I'm a bit concerned about that. So is this more of a commitment? Or do you need to satisfy 13.1% or more CET1 to deliver on all the other business metrics that you have this year?

我認為總體而言，我們看到中小企業貸款拖欠率正在上升，信用卡拖欠率的上升速度也比我們預期的要快。因此，如果你考慮外部環境，考慮到出口公司面臨的困難，並看看我們處於週期的哪個階段（這個週期可能會延長），你就提高了資本目標的門檻。我有點擔心這一點。那麼這更像是一種承諾嗎？或者您需要滿足 13.1% 或更高的 CET1 才能實現今年的所有其他業務指標？

Second part of the question is, if you have to give up more business loans than you had planned, would that increase your RWA versus plan? And how are you going to manage your CET1 if that happens?

問題的第二部分是，如果您必須放棄比計劃更多的商業貸款，這是否會增加您的 RWA 與計劃的比率？如果發生這種情況，您將如何管理您的 CET1？

Thank you very much for those questions, and please give us a moment to prepare the answer.

非常感謝您提出這些問題，請給我們一點時間準備答案。

Well, thank you very much for that question. You've asked whether this is a sign of our confidence, the CET1 target this year of being 13.1% or above. Well, actually, we have always delivered our CET1 above 13%. And as you can see in Q1 CET1 numbers, our asset growth continues, and this is combined with internal efficiency efforts, such as data cleansing to deliver 13.1%.

嗯，非常感謝您的提問。您問到，今年的 CET1 目標是 13.1% 或以上，這是否是我們信心的體現。嗯，實際上，我們的 CET1 一直都在 13% 以上。正如您在第一季的 CET1 數據中所看到的，我們的資產繼續增長，並且與數據清理等內部效率努力相結合，實現了 13.1% 的增長。

We have increased the target by 10 bp, and that is explained by various issues. Last year, there was a lot of macro volatility, including exchange rate. And we wanted to actually keep an additional buffer, and that's why it's 13.1%. And this is comfortably deliverable. We have simulated this internally, and we are quite comfortable that we will be able to deliver at least 13.1% of CET1 this year.

我們已將目標提高了 10 個基點，這可以透過多種問題來解釋。去年宏觀波動很大，包括匯率。我們實際上想保留額外的緩衝，這就是為什麼它是 13.1%。這是可以輕鬆實現的。我們已經在內部對此進行了模擬，並且我們非常有信心今年能夠實現至少 13.1% 的 CET1。

And then your question was, what would happen if business loans have to be increased and delinquencies? We are carefully watching the business cycle in Korea. But even at current trends, we will be able to comfortably deliver our business plan this year.

然後你的問題是，如果商業貸款增加且拖欠率上升，會發生什麼事？我們正在密切關注韓國的商業週期。但即使按照目前的趨勢，我們今年也能夠輕鬆實現我們的業務計劃。

And relatively speaking, Shinhan Financial Group, when it comes to asset quality, is a bit superior to others. And this year, asset soundness management is the top priority as we manage our business. So we will be particularly more tight in our management. Now in terms of funding and asset growth, we are going to be delivering the CET1, while supplying the funds in the right places.

而相對而言，新韓金融集團在資產品質方面，還是略勝一籌的。今年，資產穩健管理是我們經營管理的重中之重。所以我們的管理會特別嚴格。現在就資金和資產成長而言，我們將提供 CET1，同時在正確的地方提供資金。

Seol Yong Jin, SK Securities.

Seol Yong Jin，SK 證券。

I would like to ask more about the Jeju Bank regarding your collaboration with Douzone Bizon. You were seeking a license as an internet-only bank, but then it seems that you have shifted your corporate strategy, so I'd like to hear more about that.

我想進一步了解濟州銀行與 Douzone Bizon 的合作情況。你們正在申請純網路銀行牌照，但後來似乎改變了公司策略，所以我想了解更多相關資訊。

In the mid- to long term, what is the size? Do you have a target in terms of how much you want to grow your business? And then the overall directionality, it's positioned within the wider group, et cetera. If you could explain.

中長期來看規模是多少？您是否有一個關於業務成長目標的目標？然後是整體的方向性，它位於更廣泛的群體中，等等。如果你能解釋一下的話。

Thank you for your question. Please bear with us as we prepare the answer. For Jeju Bank's ERP banking initiative, the Group CSO will address your question.

感謝您的提問。請耐心等待我們準備答案。對於濟州銀行的 ERP 銀行計劃，集團 CSO 將回答您的問題。

Yes, this is Goh, Seok Heon, the group CSO. I think I've been attending the IR session more than ten times now. And I think I am checking the microphone. It's been quite a while. Regarding the background, in banking, of course it's a red ocean domain with very intense competition. So in terms of remaining scope or white space, well of course, we have to look at the adequacy of financials, also, it's a matter of trust.

是的，這是集團首席策略長 Goh, Seok Heon。我想我已經參加過 IR 會議十多次了。我想我正在檢查麥克風。已經過去好久了。就背景而言，銀行業當然是個紅海領域，競爭非常激烈。因此，就剩餘範圍或空白而言，當然，我們必須考慮財務狀況的充分性，這也是一個信任問題。

So for non-audited SMEs or SOHOs, there's always some concern about the credit standing. How can we assess the credit standing of these types of potential customers to provide support. That's always very key. So that will be very key in terms of receiving licensing for an internet bank. So yes, we did look at it as a potential.

因此，對於未經審計的中小企業或自營商來說，他們總是擔心信用狀況。我們如何評估這些類型的潛在客戶的信用狀況以提供支援。這始終是非常關鍵的。因此這對於獲得網路銀行許可至關重要。是的，我們確實認為它具有潛力。

In terms of why we changed our direction, in order to become internet-only bank, there are many different stakeholders involved. There are about four consortiums that apply for license, and each actually have more than ten stakeholders involved in each of the consortiums.

關於我們為什麼改變方向，為了成為純網路銀行，其中涉及許多不同的利害關係人。申請許可的財團大約有四個，每個財團實際上都有十多個利害關係人。

With Douzone Bizon, we have set a clear direction in terms of what we want to achieve. If there are too many stakeholders, we question whether it can be achieved. And then in terms of the capital size of the personnel, many resources or sizable resources are required, and there's a long period until we're ready to really launch products. So it will take a long time to become an internet-only bank.

透過 Douzone Bizon，我們明確了想要實現的目標的方向。如果利害關係人太多，我們就會質疑這是否能夠實現。然後從人員的資本規模來看，需要很多資源或相當大的資源，而且我們還需要很長一段時間才能真正準備好推出產品。因此，成為純網路銀行還需要很長時間。

Now Jeju Bank as a regional bank was based with various constraints. So we wanted to find some way to foster more competitiveness of Jeju Bank. So everything came together, and we ultimately decided to change our tact and direction.

目前濟州銀行作為一家區域性銀行，面臨各種限制。因此，我們想找到一些方法來增強濟州銀行的競爭力。所以一切都匯集在一起，我們最終決定改變我們的策略和方向。

Of course, in the mid- to long term, embedded banking is the model that we have announced. So short-term corporate loans or SME loans, SOHO loans will be the focus. And so once that performance is validated, then employees -- corporate employees, for example, may be included in the scope as we expand business.

當然，從中長期來看，嵌入式銀行是我們宣布的模式。所以短期企業貸款或中小企業貸款、SOHO貸款會是重點。因此，一旦驗證了該績效，那麼隨著我們擴大業務，員工（例如公司員工）可能會被納入範圍。

So this is actually sort of a test bed for the group. In the short term, as you may know, we're thinking KRW1.5 trillion to KRW2 trillion. So we hope that things go well somewhere around that level. But there are lots of things that we have to think hard about throughout the process. So whether our commitment and the desired direction can be achieved or not. We have to work very hard in order to really deliver on our commitments to our shareholders. So I look forward to a lot of interest, and also a lot of support from everyone regarding this initiative.

所以這其實是該組織的一個試驗台。短期內，正如你們所知，我們考慮的是 1.5 兆至 2 兆韓元。因此我們希望事情能夠進展順利。但在整個過程中，有很多事情需要我們認真思考。那麼我們的承諾和期望的方向是否能夠實現。我們必須非常努力地工作才能真正履行對股東的承諾。因此，我期待大家對這項倡議表現出濃厚的興趣和大力支持。

Thank you very much for your answer. We'll move on. Park Hye-jin, Daishin Securities.

非常感謝您的回答。我們將繼續前進。樸慧珍，大信證券。

Thank you very much for this opportunity. I have a question to Shinhan Card. As we saw in the presentation, delinquencies are worsening, and you said that the Shinhan Bank sold less NPL than usual because of unfavorable conditions. I don't think that is the case for credit card assets. Can you give us overall your expectations guidance for the credit card business this year?

非常感謝這次機會。我對新韓卡有一個問題。正如我們在演示中看到的，拖欠情況正在惡化，您說由於條件不利，新韓銀行出售的不良貸款比平常少。我認為信用卡資產的情況並非如此。您能否給予我們整體對今年信用卡業務的預期指引？

Thank you very much for that great question. And please give us a moment to prepare our answers.

非常感謝您提出這個好問題。請給我們一點時間準備答案。

Well regarding that, the Shinhan Card CFO will answer.

那麼關於這個問題，新韓卡財務長會回答。

Yes, this is Hae Chang Park, the CFO of Shinhan Card. The self-employed businesses are the key reason for the higher delinquencies and they are now recovering. Interest rate did start to decline from 3Q last year, helped improve business situation, but then there was impeachment. The impeachment is somewhat wrapped up now. And we are expecting overall environment to improve even for the self-employed small businesses. So we think that delinquencies will start to improve.

是的，這是新韓卡的財務長 Hae Chang Park。自營企業是拖欠率高的主要原因，目前它們正在復甦。去年第三季以來利率確實開始下降，有助於改善商業狀況，但隨後出現了彈劾。彈劾案目前已基本結束。我們預計，即使是對於自營的小型企業來說，整體環境也會有所改善。因此我們認為拖欠情況將會開始改善。

Also from April, we have our direct recall free organization in our call centers to once again reduce our delinquencies. And with that in place, we are expecting delinquencies to improve from Q3. And then the Shinhan Card business performance outlook, it's mainly in the credit cost and the funding cost, which is the burden, and we are at the peak of the funding cost.

此外，從四月開始，我們在呼叫中心設立了直接免召回組織，以再次減少拖欠率。有了這個措施，我們預計拖欠情況將從第三季開始改善。然後新韓卡業務表現的展望，主要是信貸成本和融資成本，這是我們的負擔，我們正處於融資成本的頂峰。

And as market rates go down, our average funding cost will also go down, and that will be favorable to our P&L bottom line. And then as we approach the end of the year, we expect to recover to usual profitability levels.

隨著市場利率下降，我們的平均融資成本也會下降，這將有利於我們的損益底線。隨著年底的臨近，我們預計獲利水準將恢復到正常的水平。

Well, thank you very much for that answer. Currently, we have no other questions in the queue. We do know that there are other financial groups doing their earnings calls today. Perhaps that is the reason why we don't have more questions lined up. And I think this is a good place for us to end this earnings presentation.

好吧，非常感謝您的回答。目前，隊列中沒有其他問題。我們確實知道今天還有其他金融集團正在召開收益電話會議。也許這就是為什麼我們沒有更多問題的原因。我認為這是我們結束本次收益報告的好地方。

Thank you very much then. With that, we will conclude our first earnings call for the first quarter of 2025 for Shinhan Financial Group. Please refer to our website and our YouTube channel for a video of today's earnings call. Thank you very much.

那麼非常感謝。至此，我們將結束新韓金融集團 2025 年第一季的首次財報電話會議。請造訪我們的網站和 YouTube 頻道觀看今天的收益電話會議的影片。非常感謝。