Woori Financial Group Inc (WF) 2024 Q1 法說會逐字稿

Hello. Good afternoon. I am Han Hong Seong, Head of the IR department at Woori Financial Group. Let me first begin by thanking everyone for taking time to participate in this earnings call for Woori Financial Group. On today's call, we have Group CFO, Lee Seong Wuk; Group CTO, Ok Yil Jin; and Group CRO, Park Jang Geun, participating.

你好。午安.我是韓洪成 (Han Hong Seong)，友利金融集團 IR 部門主管。首先，我要感謝大家抽空參加友利金融集團的財報電話會議。在今天的電話會議上，我們有集團財務長 Lee Seong Wuk；集團首席技術長 Ok Yil Jin；集團 CRO Park Jang Geun 參與。

For today's call, the CFO, Lee Sung Wook, will present the earnings performance for the group and then after that, we will have a Q&A session. In addition, please note that today's call is being interpreted simultaneously for our overseas investors.

在今天的電話會議上，財務長 Lee Sung Wook 將介紹該集團的獲利業績，然後我們將進行問答環節。另外請注意，今天的電話會議是為我們的海外投資者同步翻譯的。

Now let us start with the presentation on Woori Financials Group 2024 Q1 business performance.

現在讓我們開始介紹友利金融集團2024年第一季的經營績效。

Good afternoon. I am Lee Seong Wuk, CFO of Woori Financial Group. Let me dive into the 2024 Q1 performance of our group. Please turn to page 3 of the presentation, which is available on our website.

午安.我是友利金融集團財務長李成旭。讓我深入了解我們集團 2024 年第一季的業績。請翻到簡報的第 3 頁，簡報可在我們的網站上找到。

First, let me touch upon the net income of the group in the first quarter of 2024, Woori Financial Group's net income was KRW824.5 billion. Amid a higher for longer interest rate environment and high inflation, the group utilized its strong profit generation capabilities and stable cost management to achieve a group ROE of 10.3%, which is better than the end of last year.

首先介紹一下集團2024年第一季的淨利潤，友利金融集團的淨利為8,245億韓元。在長期較高的利率環境和高通膨環境下，集團憑藉強大的獲利能力和穩定的成本管理，實現集團淨資產收益率10.3%，優於去年底。

In addition, the group's net operating revenue increased 9% QoQ to KRW2,548.8 billion. Against continuous entered in Korea and abroad, this performance was the result of a balanced growth in interest income generated from the growth and high quality corporate loans and also non-interest income focused on core fees. Next let me move on to expenses such as SG&A and credit cost.

此外，集團淨營業收入較上季成長9%至25,488億韓元。與韓國和國外的持續進入相比，這一業績是由於成長和高品質企業貸款產生的利息收入以及以核心費用為重點的非利息收入平衡增長的結果。接下來讓我繼續討論 SG&A 和信貸成本等費用。

The Q1 group SG&A was KRW1,032 billion, a decline of 0.5% year over year. The cost income ratio was 40.6% and it is being maintained at a stable level. In addition, if we look at the Q1 group credit cost, it was KRW357.6 billion, and as local and global uncertainties continue, credit cost is being managed within the range in the group's financial plan. Next, let me discuss our capital ratios and quarterly dividends.

第一季集團SG&A為10,320億韓元，較去年同期下降0.5%。成本收入率為40.6%，維持穩定水準。此外，如果我們看一下第一季集團信貸成本，則為3,576億韓元，隨著本地和全球不確定性的持續，信貸成本正在管理在集團財務計畫的範圍內。接下來，讓我討論一下我們的資本比率和季度股息。

As of the end of March 2024, the group's CET1 ratio is expected to be around 12%. Even though the Korean Won weakened significantly during the quarter, the group was able to maintain the CET ratio at the same level as last year due to solid performance and active risk weighted asset management.

截至2024年3月末，集團CET1比率預計約12%。儘管韓元在本季度大幅貶值，但由於穩健的業績和積極的風險加權資產管理，該集團仍能夠將 CET 比率維持在與去年相同的水平。

In addition, today, the group's POD decided to pay quarterly dividends of KRW181 per share for the first quarter. Moreover, at the end of March, the group acquired the stake that KDS helf of 1.29% of the group and all the shares were cancelled. Going forward, the group to address uncertainties in the financial market is planning to continuously improve its capital adequacy and also expand its shareholder return policy.

此外，今日該集團POD決定派發第一季每股181韓元的季度股利。此外，3月底，集團收購了KDS持有的集團1.29%股權，並全部註銷。展望未來，為了因應金融市場的不確定性，該集團計劃不斷提高資本充足率並擴大股東回報政策。

Next, let me delve into the performance of eah area in more detail. Please refer to page 4 of the presentation. First, let me go over our net operating revenue and net interest margin. Q1 net operating revenue was up by 9% quarter over quarter at KRW2,548.8 billion. In addition, the bank's Q1 NIM was 1.5%, which is three basis points higher QoQ, while group NIM, including the credit card business, was 1.74% or up by two basis points QoQ.

接下來讓我更詳細地探討一下各區域的表現。請參閱簡報第 4 頁。首先，讓我回顧一下我們的營業淨收入和淨利差。第一季淨營業收入較上季成長 9%，達到 25,488 億韓元。此外，該行第一季淨利差為1.5%，季增3個基點；包括信用卡業務在內的集團淨利差為1.74%，較上季上升2個基點。

In contrast to the fourth quarter of last year, the time deposit cost ratio stabilized and core deposits increased, resulting in the increase in NIM. Recently, the global instability in the Middle East and concerns about inflation have weakened expectations about a policy rate cut, which is expected to extend the stable trend in NIM in the second quarter.

與去年第四季相比，定期存款成本率穩定，核心存款增加，導致淨利差上升。近期，全球中東局勢不穩定以及通膨擔憂削弱了政策降息預期，預計第二季淨利差將延續穩定走勢。

Woori Finanical Group will continue to increase the proportion of core deposits and optimize its asset liability structure to prepare for a ful--fledged rate cut cycle in the future and actively to prepare to adjust downward pressure on NIM. Now, let me move on to our assets.

友利金融集團將持續提升核心存款佔比，優化資產負債結構，為未來全面降息週期做好準備，並積極做好調整淨利差下行壓力的準備。現在，讓我繼續討論我們的資產。

The total loans of Woori Bank as of the end of March totaled KRW316 trillion, which is a 1.7 increase versus the end of last year. On the corporate loan side, large corporate loan demand is still strong and high quality SME loans growth also solid. So this led to corporate loans posted KRW175 trillion or up by 2.9% versus the end of last year.

截至3月底，友利銀行的貸款總額為316兆韓元，比去年年底增加1.7%。在企業貸款方面，大型企業貸款需求依然強勁，優質中小企業貸款成長也穩健。因此，企業貸款達到 175 兆韓元，比去年年底成長 2.9%。

To take a look at retail loans, the continuation of the government's household debt management policy and impact of a slower recovery on the real property market led to retail loans decreased 0.2% versus the end of 2023, total KRW136 trillion. The group is planning to focus on the corporate loan side, but we will expand the portfolio with a focus on high-quality assets in consideration of the return on our WA to achieve profitable growth. In addition, the bank was to continue to maintain its percentage of high-quality assets in the corporate loan book, which currently stands at 86.7%.

從零售貸款來看，政府家庭債務管理政策的持續性以及房地產市場復甦放緩的影響導致零售貸款較2023年底減少0.2%，總額為136兆韓元。集團計劃專注於企業貸款方面，但考慮到WA的回報，我們將擴大投資組合，重點關注優質資產，以實現盈利增長。此外，該行將繼續維持企業貸款帳簿中優質資產的比例，目前為86.7%。

Next, let me talk about deposits. As of March, Woori Bank's total Korean Won deposits totaled KRW305 trillion. The growth in time deposits has moderated, but Korean Won deposits, which showed a decline last year, turned around this quarter. In addition, in particular, to secure a stable funding base and expand margins, the bank is actively planning to increase core deposits to focus on NIM management. And in addition, as of the end of March, the bank's loan to deposit ratio is 97.2%, representing a sufficient room. Next, let me go over our non-interest income and expenses, and please refer to page 5 of the presentation.

接下來我來說說存款。截至3月份，友利銀行的韓元存款總額達到305兆韓元。定期存款的成長有所放緩，但去年下降的韓元存款在本季出現了改善。此外，特別是為了確保穩定的資金基礎和擴大利潤率，該行正在積極計劃增加核心存款，以重點關注淨利差管理。此外，截至3月底，該行存貸比為97.2%，空間充足。接下來我介紹我們的非利息收入和支出，請參閱簡報第5頁。

Let me go into the group's noninterest income. The group's non-interest income for the first quarter was KRW350.6 billion, up 5.7% year on year. In the first quarter, in particular, the income grew 13.6% quarter on quarter and 20.3% year on year driving the growth in non-interest income. In addition to the solid growth in brand sales, such as wealth management and foreign exchange trading, HT cells such as IBM and trading, also showed robust growth, leading to significant growth in non-interest income.

讓我來談談該集團的非利息收入。該集團第一季非利息收入為3,506億韓元，較去年同期成長5.7%。特別是一季度，營收季增13.6%，年增20.3%，拉動非利息收入成長。除了理財、外匯交易等品牌銷售穩健成長外，IBM、交易等HT細胞也呈現強勁成長，帶動非利息收入大幅成長。

In the case of Hong Kong and (inaudible) which has been in the news recently, the group's customer centric product launch strategy and systemized sales process have reduced our exposure and financial impact to a very minimal level. In the future, Woori Financial Group plans to further actively promote sales in the wealth management segment based on a full and robust sales process of investment products and enhanced wealth management capabilities, as well as continue to expand growth in non-interest income segments that do not involve risky assets.

就最近新聞報導的香港和（聽不清楚）而言，該集團以客戶為中心的產品推出策略和系統化的銷售流程已將我們的風險和財務影響降至最低水平。未來，友利金融集團計劃在完善健全的投資產品銷售流程和提升財富管理能力的基礎上，進一步積極推動財富管理板塊的銷售，並繼續擴大非利息收入板塊的增長。

Let me move on to the group's SG&A expenses. In the first quarter of 2024, the group's SG&A expenses decreased by 0.5% year on year to KRW1,032 billion, and the cost to income ratio remained stable at 40.6%. As inflation uncertainty triggered by geopolitical risks is expected to continue for the time being, Woori Financial Group plans to sustain core investments for future growth, such as in digital and IT, while continuing to pursue cost efficiency centered on recurring expenses.

讓我繼續談談該集團的銷售、管理及行政費用。2024年第一季度，集團SG&A費用年減0.5%至10,320億韓元，成本收入比穩定在40.6%。由於地緣政治風險引發的通膨不確定性預計將暫時持續，友利金融集團計劃維持數位和IT等未來成長的核心投資，同時繼續追求以經常性支出為中心的成本效率。

Next is credit costs. In the first quarter of 2024, the group's credit cost recorded KRW367.6 billion. Due to the prolonged high interest rate environment and rising delinquency rates centered on non-bank subsidiaries, credit costs have been increasing year on year. In addition, there are concerns that asset quality may further deteriorate depending on the future PS market environment as the cleanup of distressed real estate PF businesses is in full swing.

接下來是信貸成本。2024年第一季度，該集團的信貸成本錄得3,676億韓元。由於長期高利率環境以及以非銀行子公司為中心的拖欠率上升，信貸成本逐年上升。此外，隨著不良房地產PF業務的清理工作如火如荼地進行，人們擔心，根據未來PS市場環境，資產品質可能會進一步惡化。

However, since last year, Woori Financial Group, based on its risk-oriented, corporate culture, has been focusing its capabilities on asset quality management and improving loss-absorbing capacity. And as a result, the group and the bank's asset quality lead indicators, including the NPL ratio, which stands at 0.44% and 0.2% and NPL coverage ratio recording 191% and 294% respectively, is managed at a good level.

但去年以來，友利金融集團基於風險導向的企業文化，將重點放在資產品質管理和提高損失吸收能力。集團和銀行的不良貸款率分別為0.44%和0.2%，不良貸款覆蓋率分別為191%和294%，資產品質領先指標管理在良好水準。

Furthermore, in the case of real estate PF loans, which have recently become a growing concern in the market, the combined amount of PF loans and bridge loans is approximately KRW3.7 trillion. Of this amount, KRW1.7 trillion is secured by public guarantee such as hook and if this amount is excluded, the loan volume will be KRW2 trillion. In the case of bridge loans, which are considered relatively high risk, capital and investment bank subsidiary toward approximately KRW0.4 trillion, which is a slight decrease compared to last year.

此外，就最近備受市場關注的房地產PF貸款而言，PF貸款和過橋貸款的總金額約為3.7兆韓元。其中，1.7兆韓元是透過Hook等公共擔保進行擔保的，如果排除這筆金額，貸款額將為2兆韓元。就風險較高的過橋貸款而言，資本和投資銀行子公司的金額約為 4 兆韓元，與去年相比略有下降。

Going forward, Woori Financial will continue to systematically focus it's management on high-risk assets such as PF and overseas commercial real estate, as well as the vulnerable pockets of each subsidiary and closely monitor changes in major risk factors such as interest rates and exchange rates to actively respond to market conditions.

展望未來，友利金融將繼續系統化管理PF、海外商業房地產等高風險資產以及各子公司的脆弱口袋，密切關注利率、匯率等主要風險因素的變化積極應對市場情況。

Next, allow me to go into the group's capital adequacy and shareholder return policy. Please refer to page 6 of the materials. As of the end of March 2023, the group's common stock ratio is 12%, which is expected to be similar to previous year end.

接下來，請容許我談談集團的資本適足率和股東回報政策。請參閱材料第6頁。截至2023年3月末，集團普通股比率為12%，預計與上年末持平。

Despite the recent surge in exchange rates, selected asset growth and solid profit growth enabled us to maintain our capital adequacy and going forward through active risk weighted asset management that takes into account the economic conditions such as interest rates and exchange rates, we plan to continue to improve our capital ratio.

儘管近期匯率飆升，特定資產成長和穩健的利潤成長使我們能夠保持資本充足率，並透過考慮利率和匯率等經濟狀況的積極風險加權資產管理繼續前進，我們計劃繼續以提高我們的資本比率。

Meanwhile, today, Woori Financial Group, considering the company's quarterly dividend policy and market expectations, decided on a quarterly dividend of KRW181 per share. Also in March, Woori Financial purchased the remaining 1.24% stake in the company held by KDIC for KRW136.6 billion and completed cancellation of the shares, which is an increase of approximately 37% compared to last year.

同時，今日友利金融集團綜合考慮公司季度股利政策與市場預期，決定季度股利每股18​​1韓元。同樣在3月，友利金融以1,366億韓元收購了KDIC持有的該公司剩餘1.24%股權，並完成了股份註銷，與去年相比增加了約37%。

This year, Woori Financial Group's shareholder return program will be even stronger than last year. In response to the government's recent corporate value a program to eliminate the Korean discount, we will communicate with the market with more active, corporate value enhancement measures and shareholder return policies.

今年，友利金融集團的股東回報計畫將比去年更加強勁。針對政府近期提出的企業價值消除韓國折扣計劃，我們將與市場進行更積極的溝通，企業價值提升措施和股東回報政策。

We believe that Woori Financial Group this quarter, despite a challenging internal and external environment, demonstrated solid profit generation and stable risk management capabilities. In response to the challenging financial environment, including interest rates, exchange rates, and the real economy, we will continue to actively manage our capital ratio and enhance long-term corporate value also and also strengthen communication with investors.

我們認為，友利金融集團本季儘管面臨充滿挑戰的內部和外部環境，但仍展現出穩健的獲利能力和穩定的風險管理能力。面對充滿挑戰的金融環境，包括利率、匯率、實體​​經濟，我們將持續積極管理資本比率，提升企業長期價值，並加強與投資人的溝通。

This concludes Woori Financial Group's first quarter of 2024 earnings presentation. Thank you.

友利金融集團 2024 年第一季財報到此結束。謝謝。

(Operator Instructions) Hyundai Motor Securities, Lee Hong Jae.

（操作員指示）現代汽車證券，Lee Hong Jae。

Yes. Thank you very much. Thank you for the opportunity to ask questions. If you look at a situation recently, I would like to ask you about some news reports. So for Lotte event, insurance there, as I mentioned, about the possible acquisitions. And so, I do understand that it's still probably in a stage of where you are looking at the opportunity. But even in a broad sense, what I would like to know is that even if I look at various standards in terms of the purchase price, how much RWA increase would you actually experience by the different ranges?

是的。非常感謝。感謝您給我提問的機會。如果你最近看一個情況，我想問你一些新聞報道的情況。因此，對於樂天事件，正如我所提到的，關於可能的收購的保險。因此，我確實理解，它可能仍處於您正在尋找機會的階段。但即使從廣義上講，我想知道的是，即使我從購買價格方面考慮不同的標準，在不同的範圍內，您實際上會經歷多少RWA增加？

So for example, for every 500 billion, how much risk weighted assets increase would that represent? So if you have any sensitivity about that, that would be appreciated.

比如說，每5000億，風險加權資產會增加多少？因此，如果您對此有任何敏感性，我們將不勝感激。

And then secondly, based upon the piano business in itself for insurance, if you continue to expand into -- is there any separate budget that you have for M&A's are even on a theoretical basis.p If so, how much would that represent? If you could give us a broad picture about that, that would be appreciated. Thank you.

其次，基於鋼琴業務本身的保險，如果你繼續擴張——是否有任何單獨的預算用於併購，即使是在理論上。如果您能給我們一個大致的了解，我們將不勝感激。謝謝。

Yes. Thank you for your question. And as we prepare the answer, if you could just wait a bit, we would appreciate that. Thank you.

是的。謝謝你的問題。當我們準備答案時，如果您能稍等一下，我們將不勝感激。謝謝。

Yes. This is the CFO, Lee Seong Wuk, and in the news recently, there have been reports of a possible holiday insurance acquisition. Maybe I can address that first question. At the group level, because we do want to strengthen our non-bank competitiveness. And we also believe that there is a need to review the possibility of entering into areas in which we don't have a presence such as insurance.

是的。我是財務長 Lee Seong Wuk，最近的新聞中，有報導稱可能收購假日保險。也許我可以回答第一個問題。在集團層面，因為我們確實想增強我們的非銀行競爭力。我們也認為，有必要審查進入我們沒有業務的領域（例如保險）的可能性。

So as a result of that, we are looking at the Lotte Insurance opportunity right now, but my has been decided yet. So even if we were to pursue and on opportunity, the basic principle is that we will not pay in excess of price. So as the market may be concerned, in terms of the pressure of the overall burden on our capital adequacy ratio, it's something that we are well aware of.

因此，我們現在正在尋找樂天保險的機會，但我的尚未決定。所以即使我們要追求機會，基本原則是我們不會付出超出代價的代價。所以對於市場來說，對於我們資本充足率的整體負擔的壓力，我們是非常清楚的。

So as a result of that, in terms of the prices that are being into the use reports right now are not something that we are considering. So we do not believe that the market should be concerned about such a situation. In addition, in terms of every 500 billion what the risk-weighted asset impact would be. So if you look at that in detail, I would have to say that for an insurance company, the way that you measure the capital adequacy difference from a bank.

因此，就目前使用報告中的價格而言，我們並未考慮。所以我們認為市場不應該擔心這樣的情況。另外，每5000億對風險加權資產的影響是多少。因此，如果你仔細觀察這一點，我必須說，對於一家保險公司來說，這是衡量與銀行資本充足率差異的方式。

So according to about three under our insurance, if you look at the CET1, that's already around 10% of that would have a 250% risk weight and if it goes above 10% in terms of the overall Tier One ratio than you actually exceed the whole situation. And in terms of risk as it goes to 250% up until 10%.

因此，根據我們保險下的大約三個，如果你看看CET1，這已經是其中的10% 左右，風險權重將達到250%，如果就整體一級比率而言，它超過10%，那麼你實際上就超過了整個情況。就風險而言，它會達到 250% 到 10%。

So as a result of that, as of now, we have around a room of 1.8 trillion. So in terms of our capital adequacy ratio, we believe that at the end of the day, for the price that we would pay that there will be a to 250% risk weight.

因此，截至目前，我們擁有約 1.8 兆的空間。因此，就我們的資本充足率而言，我們認為最終，對於我們願意支付的價格，風險權重將達到 250%。

If it were to be around 500 billion, that would mean that the overall risk assets would increase by 1.2 trillion. So as a result of that, we do not believe that that will lead to a significant decrease in our overall capital ratio.

如果是5000億左右，那就意味著整體風險資產將增加1.2兆。因此，我們認為這不會導致我們的整體資本比率大幅下降。

In addition, in terms of our M&A in general strategy and principle, for M&A that the company has what I would have to say that we don't believe that there's any big change on our stance. So it would be that within the overall range of capital adequacy that we want to maintain, we will continue to maximize shareholder value and improve our already so and also create more synergies amongst the group of affiliates.

另外，就我們併購的整體策略和原則而言，對於併購，公司有什麼我要說的，我們不認為我們的立場有什麼大的改變。因此，在我們希望維持的整體資本充足範圍內，我們將繼續實現股東價值最大化並改善我們已有的價值，並在附屬公司集團之間創造更多的綜效。

So as a result of that right now, we are open to various possibilities in terms of group synergy and also our increase of competitiveness and that is up from where we are actually looking at the local insurance opportunity. Thank you.

因此，現在我們對集團協同效應和競爭力增強的各種可能性持開放態度，這與我們實際尋找當地保險機會的情況有關。謝謝。

[Chong Yu Sob, NH Securities]

[Chong Yu Sob，NH 證券]

Yes. Good day. I am Chong Yu Sob from NH Securities. Thank you very much for the opportunity. I have two questions. The first question is a follow-up to the first question. As far as we know, the news that the securities or candidate would probably be a more of a preferred target for you in the M&A. I would like to understand whether there is a change in your strategy.

是的。再會。我是 NH 證券公司的 Chong Yu Sob。非常感謝您給我這個機會。我有兩個問題。第一個問題是第一個問題的後續問題。據我們所知，有消息稱該證券或候選人可能會成為您併購的首選目標。我想了解你們的策略是否有改變。

And also, with regard to the acquisition of Fortis Securities, I know that this is underway so I would like to understand what's the progress rate of this deal and can you give us an update on that?

另外，關於收購富通證券，我知道這件事正在進行中，所以我想了解一下這筆交易的進展情況，你能給我們介紹一下最新情況嗎？

The second question that I have has to do with dividend. As I already mentioned, the quarterly dividend of KRW181 has been decided, but I want to understand the logic behind the quarterly dividends. As far as I know, it seems a bit higher than what I have anticipate in terms of the calculations. I would like to understand, is there a change in the calculation or that change any changes in the guidelines?

我的第二個問題與股利有關。正如我已經提到的，181韓元的季度股息已經確定，但我想了解季度股息背後的邏輯。據我所知，就計算而言，這似乎比我的預期要高一些。我想了解一下，計算是否有變化或指南是否有變化？

And during the earnings call in June, do you recall the TSR and and I believe -- I would like to understand whether there are any changes to the total shareholder return that you have indicated in the previous earnings call.

在 6 月的財報電話會議期間，您還記得股東總回報嗎？

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

非常感謝你的提問。請稍等一下，因為您更願意回答您的問題。

Yes. First, with regard to on Korea plus securities, in order to increase our profitability in the non-bank sector, we have been looking into utilizing with the investment bank and forging into the security field. And at year end, we have actually added a 500 billion capital increase in (inaudible) increased assets to 1 trillion, and that Woori investment bank is also to be lucky, relocated to do so. As mentioned, in terms of Korea for securities underway. And I do want to say that it would be a bit difficult to flesh out the details at this current time.

是的。首先，就韓國+證券而言，為了提高我們在非銀行領域的獲利能力，我們一直在考慮與投行合作，進軍證券領域。到年底，我們實際上已經在（聽不清楚）增加資產中增加了5000億資本，達到1萬億美元，友利投資銀行也很幸運，搬遷了這樣做。如前所述，就韓國而言，證券交易正在進行中。我確實想說，目前要充實細節有點困難。

And in terms of our M&A direction, I did mention in my response. But in terms of the priority, when it comes to security terms and insurance from, there's no change in our priority. But in the market, because we do have a weak non-bank portfolio, if there are any candidates out in the market when targets out in the market market there, of course, we would be reviewing and we there was also (inaudible) and savings bank that we have looked into where we did to give up on that option year end.

至於我們的併購方向，我在回覆中也提過。但就優先順序而言，當涉及安全條款和保險時，我們的優先順序並沒有改變。但在市場上，因為我們的非銀行投資組合確實很弱，如果市場上有任何候選者，當目標出現在市場上時，我們當然會進行審查，我們也有（聽不清楚）和我們已經研究了在年底放棄該選項的儲蓄銀行。

So as you can see, that's how we would be approaching on the M&A going forward. And also with regard to dividend and the logic behind this, last time around, we did indicate our principle behind the quarterly dividends, and there are no changes since then. In the case of the -- based on the previous at last year's dividend will be 50% and it would be an equal dividend payout flow equals peak and for every quarter for March, June, and September. And we'll be taking into the policy into consideration the policy as well as market conditions and the quarterly dividend is currently set at KRW181.

正如您所看到的，這就是我們未來進行併購的方式。還有關於股息及其背後的邏輯，上次我們確實表明了季度股息背後的原則，之後就沒有任何變化。在這種情況下，基於去年的股息將為 50%，並且 3 月、6 月和 9 月每個季度的股息支付流量將等於高峰。我們將根據政策和市場情況綜合考慮，目前季度股息定為181韓元。

So of course, it has to go through board solution, but our plan is to provide an equal quarterly dividend. In terms of TSR, it was something that was indicated early out in the year and we may give you some more information on that. Recently, there was the corporate value program that was launched by the government. Let me go into how it's in line with that.

所以當然，它必須通過董事會解決方案，但我們的計劃是提供平等的季度股息。就股東總回報率而言，今年稍早就已表明這一點，我們可能會向您提供更多相關資訊。最近，政府推出了企業價值計劃。讓我來談談它是如何符合這一點的。

In early 2023, if we look at the ratio, the shareholder return ratio by CET1 bracket has been modified and with regard to the corporate value a program, there will be various methods that we would be reviewing put forth not to increase total shareholder return.

2023年初，如果我們看一下比率，CET1等級的股東回報率已被修改，並且關於企業價值計劃，我們將審查提出各種不增加股東總回報的方法。

So this February, what we have identified was for the 13 center bracket, it would be of a CET1 of 12%, but our current CET1 ratio is at 12%. And you can see that there is a significant gap. Therefore, we are thinking of -- for the segment in the brackets and once we decide on the segments -- for that particular segment, will order to achieve this early on so that they can engage in a pragmatic TSR, any corporate value of type of scheme. And once the current policy has been finalized and when our value of process is decided, we will make sure to communicate that with the market. Thank you.

因此，今年 2 月，我們確定了 13 個中間類別的 CET1 為 12%，但我們目前的 CET1 比例為 12%。你可以看到存在很大的差距。因此，我們正在考慮 - 對於括號中的細分市場，一旦我們決定了細分市場 - 對於該特定細分市場，我們將儘早實現這一目標，以便他們能夠參與務實的 TSR，任何類型的企業價值的計劃。一旦當前政策最終確定並且我們的流程價值確定後，我們將確保與市場進行溝通。謝謝。

SK Securities (inaudible)

SK證券（聽不清楚）

Yes, thank you for the opportunity to ask questions. And I would like to ask a question about your credit cost. So the credit cost has been around 0.4%, which have higher end of last year, if you look at the overall situation and taking into consideration that there were additional provision, do we have to see that the current level is the recruiting more normalized ratio? Or do you think that there are factors that we need to take into consideration and so forth for four years out what at what level do you want to manage your credit cost? Thank you.

是的，感謝您給我提問的機會。我想問一個關於您的信用成本的問題。所以信貸成本一直在0.4%左右，比去年年底更高，如果你看整體情況，考慮到有額外的撥備，我們是否要看到目前的水平是招聘更加正常化的比率？或者您認為四年內我們需要考慮哪些因素等等，您希望在什麼水平上管理您的信貸成本？謝謝。

Yes. Thank you for your question.

是的。謝謝你的問題。

Yes. My name is Park Jang Geun, and I am the CRO. In terms of credit cost situation right now, it's around 40 basis points. And if we look at Q1, there were actually no one-off factors. However, that have been said, we did actually had a couple of very large size delinquencies that had arrived. And though these loans are blocked by collateral, in actuality, we don't think that it will be a drag on our very overall credit cost.

是的。我叫 Park Jang Geun，是 CRO。就目前的信貸成本情況而言，約為40個基點。如果我們看第一季度，實際上不存在一次性因素。然而，話雖如此，我們實際上確實有幾起規模非常大的拖欠款。儘管這些貸款被抵押品阻止，但實際上，我們認為這不會拖累我們的整體信貸成本。

In addition to that, going forward, we don't expect to be any one-off factors. So on a quarterly basis and for the full year, we actually believe that we can manage it at 40 basis points or under. Thank you.

除此之外，展望未來，我們預計不會有任何一次性因素。因此，從季度和全年來看，我們實際上相信我們可以將其控制在 40 個基點或以下。謝謝。

Like to receive a following question. We have [Baek Do San] from Korea Investment & Securities. Please go ahead with your question.

希望收到以下問題。我們有來自韓國投資證券公司的[Baek Do San]。請繼續你的問題。

Good day. I am Baek Do San from Korea Investment Securities. I do have a question with regard to the digital business. I know that it's a bit early on, but early in the year I know that there were some reform and the IT governance schemes. I would like to understand how you assess the achievement from that and what -- I do know that and soon enough will be seen the launch of the new one banking. So in terms of the MAU or sales strategy surrounding that maybe a specific strategy. So could you elaborate on that please. Thank you.

再會。我是韓國投資證券公司的白道山。我確實有一個關於數位業務的問題。我知道現在還為時過早，但在今年年初我就知道進行了一些改革和 IT 治理計畫。我想了解您如何評估這項成就以及什麼——我確實知道這一點，很快就會看到新銀行業務的推出。因此，就每月活躍用戶或銷售策略而言，這可能是特定的策略。請您詳細說明一下。謝謝。

Yes. Thank you very much for that question. Please wait while we prepare to answer your question.

是的。非常感謝你提出這個問題。我們正在準備回答您的問題，請稍候。

Yes. I'm Ok Yil Jin, CTO. Yes. With regard to the IT governance reform to place for about three months, we're into this in three months. And based on our internal survey, they're about 10 departments where we have put together IT business together. So in the case of these platform departments, we can see that there were improvements in the pace of development and also the satisfaction of IT that felt by the units, the satisfaction of our in-house personnel, which is about 70% positive.

是的。我是首席技術長 Yil Jin。是的。至於要進行大約三個月的 IT 治理改革，我們將在三個月內完成。根據我們的內部調查，我們將 IT 業務集中在一起的部門大約有 10 個。所以在這些平台部門的案例中，我們可以看到，發展速度有所提高，單位對IT的滿意度、我們內部人員的滿意度也有所提高，大約有70%是正面的。

And of course, in various areas when it comes to quality management, we're continuing line to have full grip on the situation. So within this year, we believe that there will be some visible results that are to come from this reform. And with regard to new one, it is to open at the end of November. So it's of proceeding as planned and what we want to do is utilize this assistance universal banking app for the group.

當然，在品質管理方面，我們將繼續在各個領域全面掌控局勢。因此，我們相信今年內這項改革將會取得一些明顯的成果。至於新的，將於11月底開幕。因此，它正在按計劃進行，我們想要做的是為該團隊使用這個支援通用銀行應用程式。

And therefore, once it's open and the overall traffic of the group will be focused and concentrated via the new one app and the group, companies, and the banks will able to provide seamless connected services to our customers. And in addition to that, AI banker andmy date based services and products are items that we want to have it on loaded on the platform in the case of the price affordable phone, this also would be on linked to the new one platform. Thank you.

因此，一旦開放，集團的整體流量將透過新的應用程式集中和集中，集團、公司和銀行將能夠為我們的客戶提供無縫連接的服務。除此之外，人工智慧銀行家和基於日期的服務和產品是我們希望在價格實惠的手機的情況下加載到平台上的項目，這也將連結到新的平台。謝謝。

So the next question will be by [DB Securities] It will be [Chong Guan Yong]

所以下一個問題將由 [DB Securities] 提出【崇官勇】

Yes, hello. I am Chong Guan Yong from DB Securities and I have one question that I would like to ask you. If you look at the CET one ratio, it's actually flat on a quarter-on-quarter basis. If you look at the FX impact or any one-off impacts, that would have an impact on the CET1. And in terms of the CET1 target for the end of the year, if you could share that with us, that would be appreciated.

是的你好。我是德銀證券的莊冠勇，我有個問題想問您。如果你看一下 CET one 比率，它實際上與季度相比持平。如果你看看外匯影響或任何一次性影響，就會對 CET1 產生影響。至於年底的 CET1 目標，如果您能與我們分享，我們將不勝感激。

Thank you for your question and maybe we can address your question.

感謝您的問題，也許我們可以解決您的問題。

Yes, this is the CFO, Lee Seong Wuk. So if we look at the end of the Q1, it's 12% flat to that of the end of last year. So if we look at asset growth, again, as you can see in terms of capital adequacy management, in terms of the risk-weighted assets, this is something that we have been very active on. And so therefore, if we look at the factors that drove within the first quarter. Q1, overall net income was 0.8%. So that's around 40 basis points. And then in terms of the share buyback and translation, which also took place. There's also the dividends, and that would be around another 10 basis points.

是的，這是財務長李成旭。因此，如果我們看一下第一季末，它與去年年底持平 12%。因此，如果我們再次關注資產成長，正如您在資本充足性管理和風險加權資產方面所看到的那樣，這是我們一直非常積極的事情。因此，如果我們看看第一季的推動因素。第一季度，整體淨利為0.8%。所以這大約是 40 個基點。然後就股票回購和轉換而言，這也發生了。還有股息，大約還有 10 個基點。

And then the FX rate went up by 61 and as a result of the group level, that was around 20 basis points, deflating our capital adequacy. And then there are other factors. The growth in the Korean won loan on one law loans or ask all the risk-weighted asset increase. So there was around a 10% -- 10 basis points negative impact. As a result of that, it ended up to be flat. So if there was no FX impact and in actuality, it could be reached 12.2%. So that's a bit unfortunate.

然後匯率上漲了 61，集團層級的結果是約 20 個基點，削弱了我們的資本充足率。還有其他因素。韓元貸款的成長對一法貸款或要求所有風險加權資產增加。因此，存在約 10% 至 10 個基點的負面影響。結果，它最終變得平淡。因此，如果沒有匯率影響，實際上，可能會達到 12.2%。所以有點不幸。

But at the end of this year in terms of CET1 target based upon the current FX rate, while we do think that in terms of asset growth or if we look at the risk-weighted assets, this is something that we also are going to actively manage. So as of the end of June, we do think that we will exceed 12% and at the end of the year, of course, we will have to see what the year and dividends are like. But taking that in consideration, we do believe that we can be well above 12%. Thank you very much.

但在今年年底，就基於當前匯率的 CET1 目標而言，雖然我們確實認為就資產成長或風險加權資產而言，這也是我們將積極採取的措施管理。因此，截至 6 月底，我們確實認為我們將超過 12%，當然，到年底，我們必須看看年度和股息情況如何。但考慮到這一點，我們確實相信我們可以遠高於 12%。非常感謝。

[Hwang Jae Hyung], HSBC Securities.

[黃在亨]，匯豐證券。

Thank you very much for the opportunity. So yes, the TSR based on on the capital ratio, it was concerning, but thank you very much for the planned adjustments. And the question, you are focusing on expanding the non-bank business. But in the case of, let's say, overseas, we haven't been seeing any press coverage on any contacting, let's say, overseas candidates. So I do know that you are interested in overseas markets as well. However, I do want to understand whether you do do have specific candidates in mind abroad, you may not be able to go into specifics, but are there specific countries that you are not interested in? Please do.

非常感謝您給我這個機會。所以，是的，基於資本比率的股東總回報率令人擔憂，但非常感謝您計劃的調整。問題是，你們正在專注於擴大非銀行業務。但就海外而言，我們還沒有看到任何關於聯繫海外候選人的新聞報導。所以我知道您也對海外市場有興趣。不過，我確實想了解您是否確實在國外有特定的候選人，您可能無法詳細說明，但是否有特定的國家您不感興趣？請這樣做。

And the second question is because if there isn't it the right candidate in Korea, it's very difficult to pursue the M&A strategy. So do you have any plans to expand out the boundary to maybe invest in fintech, for instance, on to find a way to diversify the non-bank business? Or is it the case that you're actually pursuing these routes as well? Thank you.

第二個問題是，如果韓國沒有合適的候選人，那麼併購策略就很難實施。那麼，您是否有計劃擴大投資範圍，例如投資金融科技，尋找非銀行業務多元化的方法？或者您實際上也在追求這些路線？謝謝。

Yes. I'm CFO, Lee Seong Wuk. First, regarding the first question on interest in global. So we're particularly focused on Southeast Asia and India, especially in countries that have high growth potential. And we're looking into financial companies in these markets and there isn't anything visible right now, but it's true that in order to expand our global business were, of course, reviewing these markets.

是的。我是財務長李成旭。首先，關於第一個問題，全球利益。因此，我們特別關注東南亞和印度，尤其是具有高成長潛力的國家。我們正在研究這些市場中的金融公司，目前還沒有任何可見的東西，但確實，為了擴大我們的全球業務，我們當然正在審查這些市場。

And it was in April when we did disclose this information where Cambodia, Vietnam, and Indonesia, we have planned capital increase of about 500 million. And we've already engaged in the capital increase in Vietnam for our overseas subsidiaries. You can see that in the Southeast Asian market, we're looking into our global expansion.

4月我們確實披露了這個信息，柬埔寨、越南、印尼我們計劃增資約5億。我們已經在越南為海外子公司進行增資。你可以看到，在東南亞市場，我們正在考慮全球擴張。

And then moving on to the fintech question, I would like to give the floor to CDO, Ok Yil Jin.

然後轉向金融科技議題，我想請 CDO Ok Yil Jin 發言。

Yes. I am CDO, Ok Yil Jin. Regarding fintech, there's (inaudible) and there are some limitations, therefore, in terms of investments, it may not be in the form of an M&A, but it's about strategic alliance between bank and non-bank. And we can maybe engage in an equity stake in order to create synergy between the banking and banking business.

是的。我是 CDO，Ok Yil Jin。關於金融科技，有（聽不清楚）並且有一些限制，因此，在投資方面，它可能不是併購的形式，而是銀行和非銀行之間的策略聯盟。我們或許可以參與股權投資，以在銀行和銀行業務之間創造綜效。

So real estate, mobility, and e-commerce or some of these industries are where we're looking into strategic ventures or alliances and when necessary and equity holding would can also be an option for us. Thank you.

因此，房地產、流動性和電子商務或其中一些行業是我們正在尋求策略合資或聯盟的領域，必要時，股權控股也可以成為我們的一種選擇。謝謝。

Yes. Right now, there are no questions that are queuing. So maybe we will just wait to see if anyone has any questions.

是的。目前，沒有任何問題需要排隊。所以也許我們會等著看是否有人有任何疑問。

Yes. The next question will be by [Taishan Securities] it will be [Park Hae Jin]

是的。下一個問題將由[泰山證券]提出[樸海鎮]

Yes, hello. Thank you for the question. I have a very simple question that I would like to ask you. So, in the case of expects sensitivity, if you could talk about that, that would be appreciated. For example, for every 10 Korean Won change in the exchange rate, what is the impact on your PL?

是的你好。感謝你的提問。我有一個很簡單的問題想問你。因此，在預期敏感性的情況下，如果您能談論這一點，我們將不勝感激。例如，匯率每變動 10 韓元，對您的 PL 有何影響？

Yes. Thank you for your question and if you can waiy, we can actually answer that.

是的。感謝您提出問題，如果您可以的話，我們實際上可以回答這個問題。

Yes. Maybe I can address that. So if we look at the non-cash asset and liabilities, that would be around USD400 million. So on a month-to-month basis, it actually change. And so for every 10 months, there would be a change of around 41. And in particular, for the car, it would be around three basis points impact according to a change in the FX. Yes. Thank you.

是的。也許我可以解決這個問題。因此，如果我們看一下非現金資產和負債，則約為 4 億美元。因此，每個月，它實際上都會改變。因此，每 10 個月，就會發生大約 41 的變化。特別是對於汽車來說，根據外匯的變化，影響大約是三個基點。是的。謝謝。

Yes, for questions, I think that there were already a lot of questions that were asked. And as of now, because there's no other questions that have been requested for the Q&A session, maybe we can wrap it up here. If you do have any further questions, please do not hesitate to contact our IR team, and we will make sure to get back to you.

是的，對於問題，我認為已經提出了很多問題。到目前為止，因為問答環節沒有其他問題，也許我們可以在這裡結束。如果您還有任何其他問題，請隨時聯絡我們的 IR 團隊，我們將盡快回覆您。

And with this, we will close the Q&A session and also wrap up the Q1 2024 earnings conference call for Woori Financial Group. Thank you for your attention.

至此，我們將結束問答環節，並結束友利金融集團 2024 年第一季財報電話會議。感謝您的關注。