Hana Financial Group Inc. (A086790) Earnings Call Transcript & Summary

Greetings to everyone for participating in Hana Financial Group's earnings presentation. I am Lee Junghoon, IR team leader of Hana Financial Group. Thank you all to shareholders, analysts and market participants who are here despite your busy schedules via phone or the Internet. We will now begin the 2020 annual business results presentation. I would like to introduce our CFO, Lee Hoo-seung, as well as management from our major subsidiaries in finance, risk and strategy here -- who are here with us. And we will first hear a presentation regarding Hana Financial Group's 2020 annual business results and then engage in a Q&A session. Now we will hear the Hana Financial Group 2020 annual business results from our CFO, Lee Hoo-seung.

Greetings to all investors and those in the capital market who is interested in Hana Financial Group, research analysts, and the journalists in finance who are here with us. It's great to be here with you, and I am Hana Financial Group's CFO, Lee Hoo-seung. After spending a tumultuous 2020, a month has passed since we ushered in the new year. It's a bit belated, but thank you sincerely for the support and encouragement that you have shown us in the past year. And I hope that you will accomplish all you have planned in 2021. Please have a very fruitful year, and in addition, please have a happy and peaceful Korean New Year holiday with your families. From now on, I will run you through the 2020 group financial highlights. First, I would like to mention the major highlights of the group's business results. Please refer to Page 3. Hana Financial Group's 2020 yearly net income posted KRW 2,637.2 billion, a 10.3% increase Y-o-Y. Q4 net income posted KRW 532.8 billion, a 52% increase Y-o-Y. The recurring quarterly income, taking into account various one-off costs, posted KRW 700 billion level and have maintained a robust flow. Looking back on 2020, on the back of the group's strengthened overall profit generation capability, following portfolio and sales channel differentiation and preemptive risk management efforts to respond to potential risk factors, we were able to achieve solid business results amidst the challenging and unprecedented COVID-19 pandemic. Hana Financial Group in 2021 is also securing sufficient loss-absorbing buffer so that we can provide funds to overcome COVID-19 and provide the funds to the right place at the right time. To this end, we had reserved around KRW 108.2 billion of loan loss provisions in Q4 to respond to the economic situation and in order to prepare for the global financial market volatility. In addition, KRW 112.6 billion of private equity fund was recognized. Since we have the uncertainties in and out of Korea that can lead to economic downturn, going forward, Hana Financial Group will do our best based on our capabilities to dealing with [ that ] loss and do our best for better performance and shareholder value increase. Next, I would like to explain about our business results in more detail. 2020 group's core earnings achieved KRW 8,070 billion, a 1.8% increase Y-o-Y and showed steady growth. On the back of nonbank subsidiaries and global divisions' performance, we were able to safeguard our interest income to the level of the previous year. Group's fee income centering on securities, credit card capital and other nonbanking subsidiaries recorded market growth. In 2020, there was a negative business environment surrounding our biggest subsidiary, the bank and core profit, including NIM decline following policy rate cut and decline in FX fees due to the global trade contraction. Despite the situation, the nonbanking sector was strengthened for the past few years. And as a result of our business portfolio differentiation strategy, the group's core profit posted a record high. On the other hand, we have sufficiently secured group's loss absorption capability in order to prepare for economic downward risk following COVID-19. As with aforementioned, following Q2 of the previous year, there was recognition of a sizable amount of preemptive cost related to private equity fund in Q4 as well. Preemptively, it was at around KRW 220.7 billion level on a yearly basis, and we were able to secure the resources to pay for any compensation that might incur and minimize the earnings uncertainty. For your reference, we inform you that according to the translation of the Korean Accounting Standards Board, the accounting item of private equity-related expenses are cause to change from other provisions items to nonoperating income items. In addition, in the case of preemptive LLP, or loan loss provisions, including KRW 171 billion in the second half of the year, a total of KRW 337.7 billion was provisioned annually, and in particular, there was strict review of overall asset quality in Q4. And through this, we not only adjusted FLC but also, additionally provision based on a conservative basis for the assets that were relatively largely exposed to COVID-19, including aircraft finance. Accordingly, the group's 2020 credit cost ratio posted 0.27%, an increase Y-o-Y; but excluding the one-off factors that are aforementioned, it stands at a 0.17% level, and the recurring level of credit cost was still stably managed. Lastly, the group's SG&A was efficiently controlled and is being controlled. According to the labor cost savings derived from the special retirement that took place in late 2019, the group's labor costs, even excluding the partial reversal of the bank's performance linked compensation which took in place -- which took place in Q2, decreased greatly Y-o-Y. In the case of the annual retirement and benefits, with the underlying effect from the wage peak ERP, it decreased Y-o-Y, and the administrative cost also showed a decline on the back of group-wide efforts to save costs. Accordingly, the group's 2020 yearly SG&A posted KRW 3,917.7 billion, a 4.6% drop Y-o-Y. Despite the around 157 -- [ KRW 159.6 billion ] of ERP cost which was executed in Q4, it was managed below KRW 4 trillion on a nominal basis; and across the CI ratio, posted 45.3%. And the cost efficiency greatly increased Y-o-Y. On the other hand, following the preemptive early retirement or special retirement of 500 employees in late 2020, 2021 SG&A is expected to maintain a stable level of growth. Going forward, we will continue our efforts to cut costs so that we can prepare for many uncertainties of the external business environment and secure our earnings stability. Looking at the bottom left of the page, 2020 end group ROE and ROA posted, respectively, 8.96% and 0.61% and improved Y-o-Y. Next, please refer to Page 4. Group's 2020 Q4 NIM, NIM comprised of Hana Bank and Hana Card, posted 1.54%, a 4 bp drop Q-o-Q. Hana Card NIM recorded a similar level Q-o-Q, but Hana Bank NIM posted 1.28%, a 4 bp drop Q-o-Q. This was caused mostly by the asset repricing effect following the interest rate cut and SME loan support following the interest rate drop in the first half on a monthly basis. But the bank NIM rebounded in December, confirming the lowest point. We expect the Global Central Bank's low interest rate regime to continue due to COVID-19. But the bank NIM, with the ending of the effect from the policy interest rate cuts and through strategies to increase prime assets based on platforms and through making the funding portfolio more efficient, we expect there will be a recovery from January of 2021. Group's Q4 interest income on the back of contribution from nonbank and global division slightly increased Q-o-Q. In the case of quarterly fee income, with the decrease of other fee income and others, it slightly decreased Q-o-Q. But on a yearly basis, it achieved robust improvement compared to 2019. Looking at the right side of the page, bank loans in won increased 2.0% Q-o-Q and grew 9.5% YTD, posting KRW 239.2 trillion. 20 -- let's go to Page 5. 2020 group's NPL ratio posted 0.40%, an 8 bp drop YTD and 1 bp drop Q-o-Q. In addition, the delinquency rate dropped 4 bp YTD and 1 bp Q-o-Q, posted 0.26%. On the back of group-wide risk management efforts, the overall group asset quality indicators also downwardly stabilized. On the other hand, the group's 2020 and cumulative cost income ratio, CIR, posted 0.27% and increased YTD. As aforementioned, a major reason for this was the sizeable preemptive provisioning to respond to the economic situation fluctuation. And excluding this, the recurring group cost income ratio posted around 1.7%, a good level. The group's 2020 CET1 ratio is expected to fall by 9 bp Q-o-Q, posting 12.03% with the year end dividend. Excluding the dividend-related factors on the back of solid profit realization and stable RWA management, it rose Q-o-Q. In addition, with the early adoption of Basel III credit RWA that will be adopted in March, we believe that the group's capital ratio will improve to a substantial extent. I'd like to now go over the group's business results by item. Please refer to Page 7 for the group's consolidated income statement. Of the general operating income in 2020, Hana Financial Group's interest income slightly grew Y-o-Y to KRW 5,814.3 billion. The fee income grew 4.9% Y-o-Y to KRW 2,255.7 billion, thanks to improved performance from nonbank side, such as credit card, brokerage and M&A advisory fees. The group's valuation gain on sales grew 47% Y-o-Y to KRW 1,171.8 billion. The won exchange rate to the dollar, which began inching down in the second quarter, fell heavily in Q4. The group enjoyed a nonmonetary translation gain of KRW 122 billion on an annual basis, and this was mainly due to an improvement in the group's overall securities management performance and valuation gain. Lastly, despite the ERP, the annual SG&A recorded less than KRW 4 trillion on a nominal basis being effectively managed within the range of the business plan, improving the group's excellent cost control capabilities. Page 8, net income of subsidiaries. The group's major subsidiary, Hana Bank, recorded a net income of KRW 2,010.1 billion in 2020, down 6.1% Y-o-Y. Although we are able to defend the top line and save 10% on SG&A, we had recognized a hefty sum of provisions set aside for our potential external shocks. Hana Financial Investment's net income for the year increased by 46.6% Y-o-Y to KRW 410.9 billion. The market was favorable with an increase in stock trades, and the overall profit-generating capacity increased, for example, in S&T and IB. Hana Capital had a good year, growing its interest income based on an increase in healthy retail assets, recording a net income of KRW 177.2 billion, up 64.5% Y-o-Y. Hana Card's net income in 2020 skyrocketed 174.4% Y-o-Y to KRW 154.5 billion. Its results showing visible improvement, thanks to an increase in fee income as well as cost management due to subsidiary wide digital innovation. Please refer to the slide for other subsidiaries' results. Please refer to pages 9 through 11 for the NIM, noninterest income and SG&A details. And also, please look on Page 13 for group's total assets, liabilities and equity. And now moving on to Page 14. Hana Bank's loans and deposits in won. As of 2020 year end, Hana Bank's loans in won is KRW 239 trillion, up 2.0% Q-o-Q and up 9.5% Y-o-Y. Breaking down the loan growth by each item, corporate loans increased to KRW 114 trillion, up 0.8% Q-o-Q. Of these, the large corp loans recorded a downward trend since its spike in Q1. It was down by 8.1% Q-o-Q and up 2.9% Y-o-Y. On the other hand, SME loans posted a growth of 2.3% Q-o-Q and 11.4% Y-o-Y, with the continued supply of funds going into non-independently audited SOHO borrowers. In the household loans, Jeonse loan was the growth driver. And with the demand for prime credit loans concentrating in November, the household loans increased to KRW 125 trillion, up 3.1% Q-o-Q. Deposits in won in 2020 rose 2.0% Q-o-Q and 6.6% Y-o-Y to KRW 245 trillion. On an annual basis, low-cost core deposits and MMDA increased with the increase in market liquidity; whereas time deposits decreased, resulting in a significant increase in the proportion of low-cost deposits in the portfolio. As can be seen from the graph on the bottom right, the LDR in 2020 is 100.2%, slightly down from the end of last quarter. Please refer to Page 15 for Hana Bank's loan breakdown. And now the group's asset quality on Page 17. The group's total credit grew 9.7% Y-o-Y to KRW 314 trillion, and the amount of NPL fell 7.4% Y-o-Y to KRW 1.3 trillion. This brought down the group's NPL ratio to 0.4%, down by 8 basis points Y-o-Y. On the top right, you see the group's new NPL formation in Q4 was KRW 251.5 billion, maintaining a similar level to the previous year. Please look on Page 18 for the bank's asset quality. The bank's total credit rose 8.6% Y-o-Y to KRW 270 trillion, and NPL decreased 6.2% to KRW 0.9 trillion. This lowered the NPL ratio to a 0.34%, a 5 basis point decrease Y-o-Y. And the NPL coverage ratio at the end of 2020 was up 36 percentage points at 130.1%. The bank's delinquency ratio as of year-end was 0.19%, down 1 basis point Q-o-Q. Corporate loan delinquency ratio was at a similar level to the previous quarter, whereas that of the household loan was slightly decreased. Pages 19 and 20 discuss the group's and the bank's provisions. Please refer to the pages for the numbers. Now lastly, on Page 20 (sic) [ Page 21 ], capital adequacy. The group's BIS ratio and Tier 1 ratio are estimated at 14.18% and 13.01%, respectively, as of year-end. As for CET1 ratio, we expect it to be around 12.03%. Although the capital ratios have come down slightly due to the year-end dividend, capital adequacy indicators are still robust, as can be seen from the CET1 ratio that exceeds 12% without the effect of early Basel III introduction. For your reference, the Hana Financial Group's BOD resolved today that the cash dividend as of the end of 2020 shall be KRW 1,350 per share. If it is passed as is at the General Shareholders' Meeting, the fiscal year 2020's total cash dividend per common share is KRW 1,850, including the interim dividend already paid out. The annual payout ratio is expected to be 20%; and the dividend yield ratio, approximately 5.4%. Last year, we had provisioned KRW 558.3 billion to absorb potential losses, and still we're able to post a sound growth of 10% Y-o-Y in net income. However, considering the economic recession and market uncertainty in light of the prolonged COVID-19 and taking into consideration the authorities' concern and recommendation, we decided to reduce the payout ratio for the year 2020. We assure you that this is only temporary, and we sincerely ask for your generous understanding. We will do our best to increase shareholder value going forward by normalizing our shareholder return policy, including interim and year-end dividend through stable business performance improvement in the year 2021. This brings me to the end of Hana Financial Group's earnings presentation for the year 2020. Thank you.

Thank you very much. We will now go ahead with the Q&A session. [Operator Instructions]. We will take the first question. The first question from Cape Securities, we have Ms. Kim Do Ha.

I have 2 questions. First question is about the borrowers -- about the borrowers, and they have actually asked for deferral of the interest. So can you tell us about the amount? And the other types of indicators haven't been seen, so we believe there could be a volume for a concern, but we would like to know the amount. And secondly is because of the temporary regulation, you have mentioned the strength in regulations, and there is a limited time period. So if the economy is going to deteriorate, then do you believe that you could have given dividends? But you -- and if it was not possible, well maybe in the second half, there could have been interim dividends, but do you think there could be some of the dividends that could change later on? Do you think there are some different scenarios that could happen?

Thank you very much for your questions. We will soon answer them. Please hold.

I am the CRO, Hwang Hyo-Sang, and I will answer your questions. Regarding the deferred -- the debt loans that had deferred interest, KRW 350 billion, and we have almost 88% to 90% of that which is secured. So there is very low possibility that we will have NPLs.

Thank you very much, Ms. Kim Do Ha, for your questions. And what you mentioned is true. And regarding making forecast about the economy regarding the downward pressure, well, it is true that we don't have an exact agreement of opinions between the financial authorities and our group. But during the BOD meeting in the morning, there was 26% of the dividend payout ratio last year as we had 20% of dividend payout ratio this year that was exited upon with KRW 1,350. So taking into account the interim dividend amount of KRW 500, it's KRW 1,850. And the dividend per share also has gone down by [ KRW 250 ] compared to KRW 2,100 last year. However, we had a great increase in net income, and the outstanding shares relatively went down. So that is why the DPS contraction actually seems to be lower than others. However, we would like to ask our shareholders and investors for your generous understanding that the dividend amount has gone down despite our sound performance. It seems that we are seeing the end of the tunnel, but still, we are seeing a crisis continued with COVID-19. We seem that -- it seems that we could have the risk that could be exposed, such as liquidity in terms of liquidity provisions and with the deferred interest rate repayments. So it seems that there are several signs that the real economy and the financial market discrepancies are existing, and we believe that the crisis is still continuing. So the Hana Financial Group BOD's basic opinion is that we should still be very vigilant about and have a sense of crisis. That is why we had KRW 560 billion of additional provisioning so that we can prepare for any risk that could happen. And through the contraction of our dividends, we believe that our capital could be more faithfully applied, and we could be fully prepared for any risks that we cannot predict. And we believe that we will take into consideration all the opinions and the thoughts that all shareholders and stakeholders have, and we believe that we made a very prudent and thoughtful decision so that the shareholder value can increase going forward, and we looked at this from different perspectives. And we also understand and emphasized with the financial authorities that have thought long and hard about the situation from a national and global economic perspective, and we decided to persuade our shareholders and investors. So as the group CFO, I would like to ask for your generous understanding to all our shareholders with the backing down of our dividend payout ratio, albeit that it is temporary. But we promise you that we will do our best to increase our shareholder value, including the traditional interim dividend possibility that we have had. And we believe that Hana Financial Group always has shown by our actions and not by our words, and we have always led the way in shareholder value increase. And we have been recognized in the market, and we will do our best to overcome COVID-19 and do our best. And if we feel in shareholder relationship because of the dividend decision, I believe that it is only my responsibility as the CFO because we cannot have good communication with the shareholders.

To elaborate, if we don't have an economic downturn that will be deteriorated, you mentioned about those scenarios. And as the CFO has mentioned, it was said that this policy is very temporary. And our management believes that shareholder value, shareholder return is our utmost priority. And I believe that it was confirmed through our interim dividend in the previous quarter -- previous year, and although it may be a little bit early to say, but it seems that we are not seeing more signs of economic depression going forward. And looking at the different signs, it seems that we will do our best for our shareholder return policy and not disappoint our shareholders going forward.

We have the next question from Mr. Kim Jin-Sang from Hyundai Motor Securities.

I also have 2 questions. You did talk about the capital policy, but Basel III will be introduced. And when the capital ratios go up in the official numbers, will that affect your capital policy further? Or with the adoption of Basel III, with the detailed categorization, the capital ratios could go down, and it may not affect your capital policy. Which one is it? And up until February, if the government's guidelines are effective, then I think it could affect your interim dividend. And with the COVID-19 crisis relieved, with the Basel III introduction, you will have higher capital ratios. And do you have plans to increase your payout ratio drastically higher? Do you have plans on focusing on higher payout ratio? And my second question is simpler. In 2021, what is your business plan going to focus on? Is it going to be NIM, the credit cost, SG&A? Could you just recapture your business plans in these categories?

Yes, please hold while we get the, first, CRO to answer the question.

Yes. Let me take the first question about Basel III. With the introduction of Basel III, the total capital ratio will go up 1.9%, and CET1 ratio go up by 1.6%. What we expect is for CET1 ratio, we have been targeting 12% every year. And with the introduction of Basel III, we will adjust that to 13%. And the lower limit will go up. And as for the strategic investments that we will be making, we need to have enough capital. That's why we will manage at 13% target. We could use the capital to use in -- well, we did not use the increased capital in increasing our assets, and we had deferred on our decision to use the capital. So let me stop at that.

Yes. The government's recommendation was temporary. And as for the interim dividend, we cannot say anything definitively. But historically, as was mentioned before, we do have the record. So please take our word for it. And we will do our best to meet our promise. And last year, we did commit to the interim dividend. And there is recognition that we do have enough for the dividend payout. But at the BOD level and at the financial group's level, we are looking at things for many different angles and from a comprehensive perspective. And as to this year's business plan, the IR team will get back to you and give you more explanation about the targets.

We'll take the next question from HSBC Securities, we have Director Won Jaewoong.

I am Won Jaewoong from HSBC. Congratulations on your earnings despite the challenging environment. I have 2 questions. The first question is about the NIM. And regarding the low-cost deposits, I know that you have had a lot of that coming in, but it seems that a lot has gone down. So can you elaborate on this with some details? My second question is looking at the articles in the media regarding demand deposits or time deposits, people are seeing that the funds are flowing to the stock market and other markets. Looking at your earnings in Q4 of last year, it seems that we're not seeing those types of signs, but we didn't see the data for January of this year. So do you see those signs at the bank? Or do you think there is no reason for concern?

Yes. Regarding the quarterly NIM decrease despite the increase of low-cost deposits increase. So we will have someone that answered in the second part. Well, we had the loan asset repricing effect following the policy rate cut of the first half of last year. And we could see that the NIM actually recovered in December, looking at the monthly flow, and it seems that the effect of loan repricing has ended. So asset repricing has ended, so we are seeing the continued effect of the asset repricing, and bank NIM has seen the bottom.

I am [indiscernible] of Hana Bank, and you heard from the group CFO that the amount of variable interest rate products is quite sizable. It's 74%. So in March and May, we had a policy rate cut, and most of that was handled in Q4 of last year. And at the end of the year, we had a lot of maturities of time deposits, and there was a lot of repricing late last year. So we believe that the effect will be seen in Q1 of this year. And we expect that in Q4, we hit the bottom. And in Q1 of this year, NIM will go back to its regular level. And we will maintain that. So on an annual basis, we will have our goal of pushing it up by 1 bps or 2 bps. And that is how we're managing the NIM.

Just a second. Yes. We have some more that we would like to say regarding the flow of low-cost deposits. As you mentioned, as of January, looking at the 5 major commercial banks, people are expecting money move to the stock market. And it is true that partly that is happening, but in -- by our bank, well, we see a partial movement, but still, we are seeing low-cost deposits coming in. So we believe that it is -- it doesn't have much effect on our side.

The next question from Kim SooHyun from Shinhan Financial Investment.

Congratulations on a good year results. I have one question. It's about the FX rate. Nonmonetary translation gain or loss occurs on special cases. And usually, on a monthly basis, we used to look at the NIM numbers, and when there were times when the stock prices were volatile and we saw the side effects of that. But during the quarter, depending on the FX rate fluctuation, the stock prices are sensitive and quantitatively, we could predict the effect in the market price. And so unnecessarily when the FX rate is volatile, then it is reflected on the stock price. And is there a way to structurally relieve this problem? That's what I am curious about.

Thank you. Please hold.

Let me try to answer this question. This is one of the often asked questions. We do have assets. It's on -- denominated in foreign currency. And so we do have this phenomenon, and we cannot prevent this from happening. We did review the hedge measure. But when we hedge, then regardless of the FX volatility, then there's the accounting cost involved. And according to the current IFRS, this is non-monetary, and it cannot affect the capital. But when we hedge, it does affect the accounting book, and then it does affect the capital. So this is a vicious cycle. We did consider the hedging method, but do we have to incur unnecessary accounting cost? And so we decided to go for an option that did not affect the capital. When the gain is not significant and when there is fluctuation in the top line, then the volatility in the net income was high. But every quarter, non-monetary loss on the top line is minimal. And we do not see a huge fluctuation in the FX rate. So given the current situation, there is less need for hedging. So as for this, if there is a change in foreign currency denominated assets, then maybe we could revisit the hedging measure. But as for now, we do not plan to consider the hedging measure. In order to reduce the FX volatility sensitivity, we do not consider the hedging. But as for the equity investment method overseas, we do have a lot more for that. So we could consider other measures, such as hybrids in foreign currencies and diversifying our won position.

It seems that there are no other questions, but we will hold if there are any late questions coming in. We have the next question from KTB Securities, we have [indiscernible].

[indiscernible]

I'm sorry, but it seems that your connection is not very good. So can you repeat your question? We couldn't hear your question due to some line issues. Just a second.

Can you hear me now?

Yes, please.

Well, I would like to ask a question about your margin forecast. Looking at the BOK data, it seems that balance-based and CLO-based loan interest rate, they have still a difference, although the cap has narrowed. And I think that you are expecting the margin to improve so the downward pressure on the profitability, well, I think you have some assumptions about that. So you believe that the margin will improve, or do you think your funding costs will actually be good so that it can offset the downward pressure on your situation? So can you tell us about why you have that margin forecast, the structure behind your assumption?

Thank you for your question. Please hold.

I am [indiscernible] of the bank. And as you have mentioned, regarding the bank's of NIM forecast on an annual basis, we believe that it will go up by 1 or 2 bps. And let me explain to you the reasoning behind it. First is we believe that the funding burden will be alleviated, and that will be a more bigger reason. And we had a high interest rate burden, but we plan to save that because it will be cleared. And secondly, if there is no change to the BOK interest rate, we believe that for this year, we can see our deposits and our loans, and we will see an improvement. And regarding our asset growth, we don't think that it will be as high as last year, but it will be at an appropriate level. So we will have mortgage loans, Jeonse loans or ESG guaranteed loans that we will focus on more than in the past.

In the interest of time, we will take the last question, Ms. Kim Do Ha from Cape Securities.

This is a vague question, but let me ask it. If we -- even if we have good performance, if the stock prices could suffer because of interest rate, but I think credit could be the biggest problem. I know we cannot make expectations and estimations. But if the economic cycle stays at this level. What do you think is the write-back cycle?

Yes. I am CRO, Hwang Hyo-Sang. Let me explain. As for credit, last year, we did save additional provision of KRW 340 billion. And this year, I think that can help us at -- as for the borrowers who had deferred their payment last year. And in the industries that will suffer this year, this year, there will be some burden on our provisioning needs. But compared to last year, we do have sufficient provisions. So I don't think the provisions will be as hefty as last year. And as far as some of the provisions that had been conservative, the credit ratings could go up, and there could be a write-back or a reversion of the provisions this year. And then starting in 2022, I think the effect of write-back will kick in.

Thank you. In the interest of time, this has been the last question. And with that, we would like to conclude the business results earnings call of Hana Financial Group for the year 2020. You can visit the website to listen to the webcast again, and we will upload the IR materials. And for any additional questions, please contact the IR team. Thank you for your attention. [Statements in English on this transcript were spoken by an interpreter present on the live call.]