Woori Financial Group Inc. ($A316140)

Good afternoon. I am Han Hong Sung, Head of IR at Woori Financial Group. Thank you to everyone for taking the time to participate in today's earnings call for Woori Financial Group. On today's call, we have the Group CFO, Kwak Seong-Min; Group CSO, Lee Jung-Soo; Group CDO, Oak Il-Jin; and the Group CRO, Park Jang-Geun. We will begin with the Group CFO, Kwak Seong-Min presenting on the earnings, followed by a Q&A session. Please also note that we're providing simultaneous interpretation during the call for the benefit of overseas investors. With that said, let us start the presentation on the first quarter 2026 earnings for Woori Financial Group.

Good afternoon. This is Kwak Seong-Min, the CFO of Woori Financial Group. Allow me to present on the earnings results for Woori Financial Group for the first quarter of 2026. And please turn to Page 2 of the material, which is available on our website. The group's Q1 2026 net income was KRW 603.8 billion coming in flat year-over-year driven by solid growth from Corporate Finance, particularly from the advanced strategic industry sector and 5 consecutive quarter uptrend in the bank's NIM, interest income displayed steady growth. At the same time, record high fee income and the inclusion of the insurance business drove sizable noninterest income, which led to balanced top line growth. However, due to ERP at the bank beginning of the year and one-off provisioning related to the local subsidiaries of the Global division, and FX loss and downsized gains from securities following sharp price in the FX rate and the market interest rate during the quarter, net income somewhat underperformed market expectation. But with such factors excluded, group's running basis income was around KRW 900 billion and as the impact on bottom line, was due to volatilities in the financial market and temporary in nature due to the external environment we expect to see recovery once the market indicators stabilize. Next, on the CET1 ratio. Q1 2026 preliminary CET1 ratio for the group rewrote historical record at 13.6%, increasing 71 basis points year-to-date and 115 basis points from last year. The sharp market volatility is caused by external uncertainties on the back of group-wide capital management efforts, i.e., asset rebalancing and revaluation of the group's tangible asset, we were able to achieve above 13% CET1 ratio target ahead of the planned time line which helped to secure a steady foundation for Woori Financial Group to enable both sustainable and stable growth and shareholder returns. Today, the BOD of Woori Financial Group decided on a quarterly dividend payout of KRW 221 per share, which is a 10% increase year-over-year. And as was the case last time, the full amount will be nontaxable. Also in light of sufficiently high capital ratio, we expect additional share buyback and cancellation to be most likely during the second half of the year in accordance with the corporate value enhancement plan announced at the start of the year. In terms of nonbank competitiveness, growth momentum is building following the completion of the setup as a comprehensive financial group. Income from nonbank subsidiaries, including card capital insurance securities was up 185% year-on-year, widening the nonbank contribution to 9% of last year to 25%. For Woori Investment & Securities, the decision was made for KRW 1 trillion of capital increase initiating the Phase capitalization plan. Tongyang Life will be made fully owned subsidiary through which we intend to streamline the governance which will drive efficiencies and business management and solidify insurers competitiveness inside the group. Next, group performance in greater detail. Please refer to Page 3 of the material. First, in net operating revenue and the NIM. Q1 '26 net operating revenue came in at KRW 2.7577 trillion, underpinned by diversified revenue sources and stable earnings capacity, that was 5.6% year-over-year increase. On the back of productive finance initiatives and ensuing growth driven by corporate finance, NIM continued to improve with interest income of 2.3% year-on-year, reporting KRW 2.3032 trillion, sustaining a solid uptrend. Following the completion of the portfolio as a comprehensive financial group last year, diversified revenue sources led to tangible results, driving noninterest income up 26.6%, a sizable increase powering the earnings growth. Bank NIM in Q1 was 1.51%, up 2 basis points Q-on-Q and 7 basis points year-over-year, respectively. While including the card business, group NIM reported 1.76% up 6 basis points versus last year. At the start of the year, rate cut expectations and money movement on the back of bullish equities market led to concerns of a potential NIM decline, but the uptrend continued on rise in market rates driven by broader backdrop and profit-focused lending management and funding cost efficiency efforts. Going forward, we will continue to expand core deposit base and actively manage ALM to sustain a steady margin trend. Next is on the loan book of the bank. As of end of March 2026, bank loan totaled around KRW 338 trillion, up 1.2% year-to-date. Corporate loan growth was driven by advanced strategic industry, supported by productive finance, expanding 2% to report KRW 184 trillion. Solid demand from the nation's core industries, such as semiconductor, defense and biosector drove growth of lending to large corporations by 7.5% while we saw marginal dip Q-on-Q for SME loans with continuing impact from asset rebalancing, focusing on property leasing businesses. We, however, believe that going forward, as large-scale projects start to kick in, funded by productive financing, such as the National Growth Fund, loans to SMEs in the back end will further pick up. For household loans, on the back of active real estate market stabilization policies by the government and stringent loan management, the loan book for this segment was flat at KRW 151 trillion. With Woori Financial Group's leveled up capital capacity and by actively leveraging the group's competitiveness in corporate finance, we will ramp up financing support towards the productive segment, and we'll also continue asset rebalancing to navigate uncertain financial environment. On the retail side, we are aligned with the government's multifaceted efforts to control household loans and plan to drive growth that is adequate while complying with the aggregate capped target. Next, I will go over the group's noninterest income. The group's 2026 Q1 noninterest income jumped by 26.7% Y-o-Y to KRW 454.6 billion. In Q1, due to sudden FX and market rate increases, there were some downside factors. However, as the group's portfolio was completed last year, profit diversification in nonbank subsidiaries marketing efforts led to a stable level of group-wide businesses. In particular, core fee income, which continuously grew every quarter, increased by 13% Y-o-Y, to KRW 576.8 billion, which is a record high for a quarter. Woori Financial Group will further work to continuously expand the bank's wealth management business and the HQs marketing activities while the nonbank subsidiaries strengthened their core competitiveness. The securities arm will consistently implement the capital injection plan to enhance market position and strengthen the group's capital functions. The insurance business will seek to stabilize its financial structure while expanding mid- to long-term profit base. The asset management arm is establishing a fund related to product of finance and with the transfer of insurance LDI assets should achieve economies of scale to become a top 10 asset manager in terms of AUM. Also, based on stronger competitiveness, joint CIB underwriting, integrated WM branches and stronger LDI of the insurance are just some examples of collaborative full-fledged synergy creation. By doing so, the nonbank subsidiary contribution to profit should improve. We will move beyond an interest income oriented additional profit structure to gradually increase the noninterest income profit contribution. Next, I'll go over the cost. Please refer to Page 4. I'll go over the SG&A expense of the group. 2026 Q1 SG&A expense of the group stood at KRW 1.4228 trillion, which is a 9% Y-o-Y increase. This brings the cost to income ratio to 45%. In this quarter, we incurred ERP-related cost of KRW 183 billion. Also, the SG&A expense of the insurance company, which came under the group umbrella in the second half of last year was KRW 25 billion. Also, the education tax hike was another KRW 17 billion impact. In the future, like last year, portfolio expansion can lead to early infrastructure costs, while institutional factors such as the education tax can also have impact. As such, group-wide efforts to boost cost efficiency are being implemented with the great transformation into an AI-based management system, corporate loan, client consultations, internal control and other key areas should show higher efficiency to improve the cost structure. Group-wide cost-saving efforts include consolidating and enhancing efficiency of branches and minimizing operating costs. These efforts should enable the mid-long-term CI target of early 40%. I will now move on to credit costs and asset quality. The group's 2026 Q1 credit cost was KRW 526.8 billion, this includes the one-off large-scale provision of KRW 138 billion booked by the bank's overseas subsidiary. While credit costs rose by 20% Y-o-Y, it decreased by 10% Q-o-Q. Excluding the one-off, the group's credit cost goes down to about KRW 390 billion. The credit cost ratio is being managed stably at below 40 bps. In case of the bank's corporate loans, high-quality assets take up 84.8%, which is a slight Q-o-Q improvement. Provisions and provisional reserves to total loans is also robust at 1.6%, evidencing sufficient loss absorption ability. We will continue to supply loans to innovative growth companies and regional leading companies while increasing guaranteed loans and policy loans. We are pursuing a growth strategy in consideration of asset quality. Based on earlier expectations of global and domestic economic recovery, credit cost was expected to decrease. However, the geopolitical risk in the Middle East, leading to higher oil prices and exchange rates have raised concerns on the slowing down of the real economy, emphasizing the need for asset quality management. For the past 2, 3 years, the nonbank subsidiaries have implemented an asset cleaning program. In the future, the group will concentrate on areas of asset quality concerns and conduct preemptive risk management on troubled sectors and vulnerable borrowers. We will also actively implement asset quality improvement measures on global business to achieve our financial plan of 20% reduction of credit cost against last year and a credit cost ratio of around 40 bps. I'll now move on to capital adequacy and the shareholder return policy on Page 5. As of March 2026, the growth preliminary CET1 ratio is expected to be around 13.6%. In order to address the difference between the book value and the financial statements and market value and to provide more credible and decision-useful information to the market, group conducted a revaluation of the land assets held by major subsidiaries. In result, we recognized a revaluation surplus of KRW 1.8 trillion, lifting the capital ratio by 60 bps. We were able to achieve capital ratios that are higher than peers without a paid-in capital increase. However, independent from this asset revaluation, despite unfavorable market factors such as high interest and FX rates, thanks to company-wide capital management efforts, this quarter's CET1 ratio, even without the revaluation, would be 13%. In result, the goal of achieving the CET1 ratio of 13% in 2026 early and then to stably maintain it at 13.2% has been effectively delivered in just one quarter, proving our commitment to enhancing corporate value. In the future, we will continue the RoRWA-based asset rebalancing efforts in a more meticulous and strategic manner. While disposal of the group's idle assets should further reduce the RWA, we will carry on multifaceted efforts to boost the capital ratio. In addition, based on such capital ratios, productive finance and strategic investment by nonbank subsidiaries will be actively pursued to establish a virtuous cycle of improved ROE and stronger shareholder return. Today, the board announced a quarterly dividend of KRW 221 per share. The record date is May 11. Following last year's dividend, this quarterly dividend will also be nontaxable, which is unique to Woori Financial Group in our sector. Individual investors will receive the full amount without any tax. It is even excluded from the comprehensive financial income tax, further significantly enhancing the effective dividend yield. The treasury stock purchase and cancellation program announced earlier this year will also be completed by June. Going forward, by maintaining a high dividend payout ratio and the competitive dividend yield will further strengthen our competitiveness as a leading dividend stock in the financial sector while also diversifying shareholder return method to strengthen our shareholder return policy. Thus before today's earnings call, the group made some important disclosures. I already spoke about the asset devaluation and quarterly dividends. In addition, the Board of Directors of the group today approved an additional capital injection of KRW 1 trillion into reinvestment and securities. The securities industry, thanks to the integration of the domestic capital market is pursuing diversified growth, not only in the traditional brokerage business, but also in the capital-based IB business and the supply of venture capital. In response to these market trends, reinvestment securities with a paid and capital raise will gradually strengthen key business infrastructure such as capital talent and license to strengthen its core competitiveness. Meanwhile, we will also work to become a Mega IB. In relation to insurance, we have fully incorporated Tongyang Life as a wholly owned subsidiary with the resolution on share exchange. By establishing a governance structure aligned with the purpose of a financial holding company, we expect to boost management efficiency as well as to increase earnings as a result of the additional equity acquisition of Tongyang Life. Above all, we expect this to lay the foundation for pursuing business integration between Tongyang Life and ABL Life. As we have done thus far, by staying ahead, we will continue to make every effort to enhance corporate value through diverse measures. This will conclude Woori Financial Group's planning 2026 Q1 earnings call presentation. Thank you.

[Operator Instructions] We will take the first question from Hanwha Investment Securities. Do Ha Kim.

I have two questions that I would like to ask. First question has to do with turning Tongyang Life as a wholly owned subsidiary. I would like to understand as to the key purpose behind this move. If you could just provide us with the overall picture, that will be quite helpful. And also, is there any particular reason why you're choosing the time line as you have chosen, why you are conducting this at this point? Second question is that your earnings actually underperformed our expectation. I can understand that there could be some difference versus the expectation. But in terms of SG&A and the insurance-related issue and the -- if you take a look at the ERP and if you consider for the ERP, I think you still missed the market expectations. So I would like to understand as to why are we seeing that mismatch in expectation, especially for the SG&A line item?

Thank you very much for your question. I understand your question to be on two different topics to give us just one moment as we prepare for the answer.

Good afternoon. I am Lee Jung-Soo, President in charge of strategies at the group. Responding to your first question. Now July of 2025, after we, I guess, the merged or the acquired the insurance entity. Basically, our key focus was strengthening our insurance business. On the financial aspect as well as the overall sales capacity, we have taken a very detailed review. And based upon what we have learned, we are undertaking process to improve on our capabilities. And in that process, we also considered an option of turning Tongyang Life as a wholly owned subsidiary. And that decision is -- will provide us with a flexibility in business management. And we believe that this was an essential step for us to drive more synergies from that perspective. From mid- to longer-term perspective, we believe that by turning Tongyang Life as wholly owned subsidiaries, we could actually retain their earnings capacity 100% within the group. And now moving on to your second question on SG&A results. If you look at Q1 2026, the CI ratio is 45%, which is about 12.4% increase on a year-over-year basis. And if you look at SG&A, on a Y-o-Y basis, there was an increase of KRW 117 billion. Now if you were to exclude insurance and education tax, that is an increase of 5.8%. As one-off factors, as we've mentioned before, there is KRW 183 billion coming from the ERP impact that's coming from the bank. Now last year, there was a ERP-related expense of KRW 169 billion last year. So there is about KRW 12 billion increase. I'm sure this will be the case for our peers as well. There is about KRW 17 billion impact from increase in the education tax. And as you will be aware, for our securities and brokerage business, with the launch last year, we have been in the process of expanding the business, and we have done some new hires. There was also IT-related investments, which amounted to KRW 17 billion increase an uplift in the -- or the increase in the SG&A related to our brokerage business. And in July of 2025, as we included the securities business, on a year-over-year basis comparison, at the insurance level, there's about KRW 25 billion increase in SG&A. Due to these elements, the SG&A and cost ratio on a year-over-year basis, that was 1.5% increase, reaching at 45%. But in terms of insurance and educational tax, if we were to carve out those impact, it's still at about 5.8%. So we do see -- the management does understand that our CI ratio is comparatively higher compared to our peers. That is why we're putting in a lot of effort both from a short-term perspective and to mid- to longer-term perspective. We're really focusing on cutting down on unnecessary spending and also making our branch network as well as our head count more efficient. So as of today, basically, we are putting an effort to consolidate our branches to 37, which is a number as of July of '25. From a longer-term perspective, through AI and digital investment, we will be making the right investment to make our investments and make our spending expenditures more efficient. Thank you.

The next question is from Yuanta Securities from Analyst Woo Do-hyung.

I have two questions. First question is about annual NIM guideline. If you can go over that, it will be appreciated. You have the CCR guideline at an early 40 bps. Is this -- does this include the first Q one-offs? And second question is about the securities company, the capital injection you are putting into your securities arm, what impact do you expect from the capital injection?

Thank you for the questions. And please just give us a second to prepare the answers.

Good afternoon. I am Kwak Seong-Min, CFO and I'll go over the NIM. It's 1.51% and it's about 2 bps Q-o-Q and Y-o-Y 7 bps increase. And for 5 executive quarters, NIM has been showing up trend. Major drivers include the market rate has been going up. So that is the biggest factor. And if you look at the -- we have been increasing efficiency of the funding, an increase in the core deposits. Also, I have been repeating myself, but we have been working on asset rebalancing. So profit generation from our asset base has been showing better trends as well. So we believe that this trend will continue in the second half. The asset rebalancing will continue to increase profitability, enhancing efficiency of funding, increasing core deposits are all positive factors to the NIM. However, in the second half, there can be some government and institutional factors. There can be some government regulations that are introduced from July onwards. And as we all know, the money moved is very visible in the market. So we are preparing to respond to that market trend. But overall, it is a downside factor to the NIM. So we will do utmost to prepare for any market trends that can underline the NIM. The BOK is expected to maintain the current BOK rates in the second half. If we assume that, the 1.46% annual NIM of last full year, I think, can be maintained and we will try to show improvement, something higher than 1.46% or around that level, I think, will be an appropriate expectation for this year. And you asked about the CCR credit costs. In Q1, it was around 53 bps for the group. It is slightly relatively high. I did go through the factors. One of the bank's overseas subsidiary booked a one-off provision, so KRW 91 billion increase from Y-o-Y. So that is around KRW 527 billion. But as also mentioned, it's about a 10% decrease of Q-on-Q, KRW 57 billion. The Indonesian subsidiary, KRW 138 billion was the one-off that I mentioned. So it's around 39% and so it becomes a 40 bps credit cost ratio. So if you look at the [ MPM ] and delinquency ratios, it shows slight upward trend, but our coverage ratio is sufficient. As of year-end 2025, we are above the average of the peers and even for the Q1 2026, I think we have higher number than our peers. The Middle Eastern conflict causing oil price and possibility of it being prolonged can impact some of the borrowers and the sectors and there are concerns in the market that we are aware of. So we will make preemptive risk management efforts, and the global business of the bank, I think, have largely been cleaned up and provisioned against. So the asset quality of the global business has been enhanced as well. So I think 40 bps will be the appropriate expectation for 2026 credit cost ratio outlook. And the total 5 should be around 20% lower than last year. We will make those efforts in Q2, 3 and 4. And today, the Board of Directors of the group decided to inject KRW 1 trillion capital into the securities company. So as of 2025, our securities company ranked 16 and after the injection, it will be around 11 in terms of capital base. And like I've mentioned earlier this year, we are trying to become a Mega IB in the mid long term. So it requires capital injections. Productive finance has become important issue these days. And so the venture capital supply by reinvestment securities can increase in the future. Based on the capital injection, the top line of the securities company this year can also, I think, increase significantly compared to last year. So based on the capital injection this year, I think even for this year, we will be able to outperform the original plan for 2026, and we will be making the almost effort to achieve that from Q1. Once the sales and marketing base is stabilized, I think in the near future or in the mid, long term, ROE can be at around 10%. So we are actively supporting the securities company. And there may be additional capital injections down the road, but we will be making comprehensive considerations, for example, license and other business expansion in that process. So with the capital injection, we are hoping that Woori Securities Company will be able to have an expanded infrastructure including talent, capital and so on so that it can jump to become a Mega IB this year. That is one of the key goals of Woori Financial Group. And if that happens, IB business and the SME business, can be expanded. And in the near future, it will turn to profit. IB is still being developed. So the retail business could take longer to start generating profit but we will be looking to expand the retail base along the way. And I think the core profit drivers will be IB, SME and retail starting from early next year. We're going to implement a balanced profit structure with the securities company in the near future.

We will now take the next question, Ms. Hye-jin Park from Daishin Securities.

I would like to ask a question regarding the capital injection on your securities business and also the share exchange for the insurance company. Would like to understand what impact it would have on your CET1 ratio. The capital injection for the security business, you say that if I heard you correctly, that it will not impact your CET1 ratio. Is my understanding correct? And the second question is that with this comprehensive share swap, for -- I understand that this is being done for the benefit of integrating Tongyang and ABL Life. And when these entities are fully integrated, what impact can we look forward to especially in terms of the earnings impact, what will be the tangible results? And second aspect is the securities business, you would want to receive the license as a CFIB, the comprehensive finance investment business, when do you foresee you would be receiving that license as CFIB?

Thank you for the question. Just give us one moment.

Regarding the impact of capital injection into Woori Investment Securities and its impact on CET1 ratio. I remember talking about this before, the holding company, when they inject capital to its subsidiary, the capital increase itself is not going to have any impact on the CET1 ratio. Now having said that, when we -- if you look at the purpose of such capital injection, it is to further strengthen and cultivate the business of the brokerage arm and so in terms of RWA allocation, there's going to be more allocation that will be done towards the securities business. So for the risk-weighted assets, the RWA, if we take on a stance where we're more actively allocating this to our securities business, then before the time that the increase in the profit is going to offset this for that window of time, it may have a downward impact on the CET1 ratio. However, we did run internal scenario, and we expect that within 3 to 4 years' time, the P&L increase, the extent of that is going to be ample enough to offset that impact on RWA. And so ultimately, due to the increase in the P&L, we expect that there would be a certain level or a small contribution that will be made to the CET1 ratio. So that will be the financial planning that we will come up with. In terms of when we expect to gain that approval, as a CFIB, now in 2024 August, that is when we launched the securities business, previously the Woori Merchant Bank the license was for 10 years, so until July of '34. So the merchant bank was able to engage in the issuance of the notes by July of '34. So the issuance of such notes is a key business that is being done by the merchant bank. So based upon the assumption that we have the permit to run the issuance of the notes business up until July of '34, basically, if we were to inject KRW 1 trillion of capital increase, then later on, though, the securities companies will be able to drive earnings. And if need be at a later date, there is need for additional capital injection we basically by next year would have to satisfy the KRW 3 trillion level in order for us to go through the process of receiving a license as CFIB. So our plan is to achieve the KRW 3 trillion of capital for this business and will file for the permit or license and up until 2034, we would be eventually be getting that approval as a CFIB. So that is the time line under which we are currently working under. We will look at whether there is any additional need for capital injection or capital increase along the way.

I am Lee Jung-soo. Now just adding on to the CFO's answer to your question. And just to clarify, your question had to do with the integration of our insurance business, consolidation of the insurance business. Now the comprehensive share exchange and the assumption that it is successful. So once Tongyang Life becomes a fully owned subsidiary of the group as part of our efforts to strengthen our competitiveness, basically, we are at this point, reviewing the possibility of merging the two entities. And through that merger, so having two life insurance arm under one group will be the configuration and by achieving that, we want to eliminate the inefficiencies so that we can achieve economy of scale for the insurance business and reduce operational costs and also enhance the quality of capital management. We believe that those are the positive impact that will come through. However, this has to be decided by the BOD of each of the entities. So at this point, I have to say that we do not have a definitive, I guess, direction forward because we still have to go through the deliberation of the BOD and there are relevant laws and regulation that we have to work under. And once the final decision is made, we will come back to you and inform you with more details.

This is Kwak Seong-Min, the CFO. Just to elaborate a little more on the comprehensive share swap and what impact it will have on our CET1 ratio, with respect to that question, our CSO has provided you with the answer. And if I were to just add, the group CET1 ratio we have put in a lot of thought into ways in which it will minimize the impact of the CET1 ratio. So we've decided to select the comprehensive share exchange and share swap because it will have minimal impact on CET. The way you calculate solvency ratio for the insurance is quite different compared to other financial businesses. And so within CET1 ratio of 10% and whatever is in excess, there is some accounting treatment issue where you would have to deduct it from the capital. So we have put in a lot of thought on how we're going to do this because of the BIS calculation aspect. So by making that additional acquisition of Tongyang Life's equities, there is a bit of a deduction, but through new issuance of shares, we believe that we will be able to offset it by KRW 300 billion. And so the CET1 ratio impact, I can tell you is almost minimal. And once it becomes wholly owned, there is no impact. Now going forward, there may be need for asset revaluation, which is KRW 1.8 trillion on a post-tax basis, there is an asset impact. So within the year, most likely August or September, once the entity turns wholly owned, we would have to do the calculation once again. But at that point in time, there is also a possibility that it could actually lift the CET1 ratio.

Next question is from NH Investment & Securities from Jung Jun-Sup.

I am from NH Securities. I have 2 questions. Another question about the CET1 ratio. You just talked about the capital injection of the securities firm and the insurance company as well, the share swap. You said that CET1 impact would be minimal. But in Q1, you did the asset reprisal that lifted the CET1 ratio. Government is really pushing on the productive finance. And I think that would have already had impact on bank and group. And I think that can continue to have impact. So assuming that, what would be the CET1 expectation for -- the impact on the CET1 ratio? I think capital ratio has improved significantly. How would that impact your shareholder return policy then? Would the current policy be continuously effective? Or would you amend the current one to reflect the higher capital ratios? Second question is about the Kbank. I think you still have about 9%. And according to the press, there's possibility of you disposing the equity that you have in Kbank. What are your plans for that? It would be greatly appreciated if you could share that with us today.

Thank you for the questions. Please give us a moment to prepare to answer.

Good afternoon. I'm Park Jang-Geun, CRO. You talked about the government's new or amended regulations on capital. I think market risk is minimum for us. So we are thinking about whether we're going to apply for that. For the operational risk, DLF and DLS, I think, is a big part of that. So it's about loss recognition rationalization, and there is an application process in the FSS. But internally, CET1 ratio, I think, is around 17 bps positive impact. And before that, in Q1, in terms of the RWA reduction of the non-listed companies, that was included in Q1, and as time passes, within 3 years, there can be some additions. So it will be reflected accordingly. Thank you.

As for the shareholder return policy, I am CFO, Kwak Seong-Min. In principle, we will continue our Value-Up program. So this year's annual 10%. And for the next 5 years, nontaxable dividends and we will be increasing treasury stock to around 10% in a speedy manner. And briefly mentioned during the presentation, CET1 ratio of 13%. And if that's higher than that, we will be reviewing cancellation of treasury stock in the second half. So those commitments will be carried on in 2026. And I think we'll be able to adhere to those commitments in 2026. So the quarterly dividend in Q1 is around 50% of last year and equally paid dividends throughout the year, that's around 10% increase, KRW 221 per share. And I think we will be paying the equal dividend, KRW 221 per share for Q1, 2, 3 and 4. And this year, we mentioned that KRW 200 billion treasury stock purchase and cancellation by June is the deadline that we had. We're already around KRW 100 billion, and we plan to purchase KRW 100 billion additional shares and cancel the full KRW 200 billion by June. And then second half, we will be reviewing additional treasury stock purchase and cancellation. And so after the Q2 results are released, I think we will be having such discussions in the Board, and hopefully, we will be able to communicate some positive news to the market. For 2025 total shareholder return, I think, would be lower than 2026. The 2026 total shareholder return would be much higher than the previous year. And in the near future, I think we will be able to have similar levels as peers in the market. We already mentioned the insurance company and how we're turning that into a fully owned subsidiary and the capital injection of the securities company, those two elements do not have a significant impact on our CET1 ratio. So it should not become a hurdle in terms of keeping the promises that we made to the market regarding shareholder return. And then you mentioned Kbank. So as you know, 5th of March, it listed successfully on KOSPI. And the price was KRW 8,300 and we are the second largest shareholder. After the IPO, 9.2% was locked up. Other than the locked-up shares, we disposed around 2% of the shares, that's around KRW 19 billion of funds coming in, in Q1. And then in March, we still have 9.2%. We're still the second largest shareholder, but the equity ownership is below 10% now. So the accounting treatment has been changed from equity method to FVOCI. So whether we would strategically hold or whether we would dispose some of the shares have not been determined yet. But if we decide to dispose some of the shares, depending on the market price after the lockup period, RWA would be reduced, and that will be a positive factor to our capital ratios. So as of today, we hold 9.2% of Kbank. And after the lockup period, we will be having discussions on how to handle the Kbank equity ownership that we have. We will be thinking about the most efficient way to use this within the bank and the group. If we decide to dispose, then the RWA will be reduced and will have a positive impact to our capital ratios.

Next question, please, from HSBC, Won Jaewoong.

I have 2 questions regarding your subsidiaries. With regards to that comprehensive share swap, I think you mentioned that there could be some costs that may be incurred. And I'm thinking that, that has to do with the appraisal right -- exercise of appraisal rights. I would like to understand as to if that expense is incurred, when would you be recognizing that? And what would be the extent of that expense? And also, you've made capital injection into your securities business. In my view, looking at brokerage and unsecured loans will be some of the business areas that you must want to expand into. So if that is the case from RoRWA basis compared to the bank, the RoRWA may be higher, and that may be able to improve on your CET1 ratio. So I would like to understand, where would be your key focus on your investment securities? And to what extent is RoRWA going to improve?

Thank you for your question. Just give us one moment.

This is CSO, Lee Jung-soo. Mr. Won, your question related to our wholly owned subsidiary initiative and also asked about potential exercise of appraisal rights, et cetera. Now just to check whether I understood your question correctly and based on my understanding of the question that you asked, the size of the -- well, depending on the size of the appraisal right, in terms of the liquidity, we believe that there may be certain level of expense that may be incurred that is aligned with the size of the appraisal right. And so that would be -- for instance, if you were to compare with our previous cases and the size in which there was an appraisal right that was exercised, based upon our previous experience, there will not be any liquidity-related constraints or any crunches that you may be concerned of in light of our past experiences. Regarding capital injection, where the capital would be utilized? Would it be for unsecured loans or other businesses? And what is the possibility of a potential increase in risk on -- return on RWA? So because this investment in securities has just launched in terms of the size of the asset, and the capital, it is relatively smaller. So up until last year, RoRWA, compared to the group's average, it was slightly lower. However, as we were coming up with this capitalization plan, the capital that will be injected into the securities business and how that's going to be allocated is what is being currently simulated for IB and S&T and retail, how it will be allocated across these businesses is what is being currently studied at this point. And as I've mentioned before, on the brokerage side, we still have more work to do on setting the IT system. So it will be quite difficult for us to give brokerage the priority but in terms of extending the credit and also guaranteed or asset-backed loans, stock-backed loans, because we have the license to engage in such business. For credit loans, if you look at the capital that is allocated to that business, we believe that more than 50%, we will be able to gain more room through the capital injection, and that is based upon the plan of the investment securities. And we recently see that there is a credit loan or the stock-backed loans where we see a significant demand uptrend these days. So if we were to allocate the capital to that business, we think that, that will have a positive impact on RoRWA, of course. And the capital increase for Woori Investment Securities, it will not end here. It would take place in phases. There's Phase 1, Phase 2 and onwards. We're in the process of coming up with the business strategy for this business. So we think that within this year, we will be able to see RoRWA on par with bank. And after that point in time, the securities business, brokers business works under the assumption that its RoRWA has to be higher than the banking business, and that is the premise upon which our business plan sits on. So we believe there will be a meaningful increase in RoRWA to meet the level of the bank. After that point in time, we will come up with the business allocation, especially allocating more capital on the retail business, and that's incorporated in the business planning of our investment securities business so that RoRWA contribution from the securities business is going to expand as we go forward.

And I think this will be the last question. It will be from DAOL Investment Securities from Kim Jiwon.

I have a short question. So it's about group RoRWA. With the capital injection to reinvestment in securities, I would like to know the impact it has on the RoRWA. You say you will have a phased in capital injection plan. But for the entire group, from the RoRWA, what is the allocation among the group subsidiaries? And second question is about the insurance. So you have Tongyang and ABL, the merger of the 2, I think, is related to the noninterest income of the group. If they are merged, are you thinking of investing additional capital to improve their K-ICS ratio? Or if you are running them independently, will you still be supportive in terms of capital injection to boost their K-ICS ratio?

Thank you for the questions. Just please give us a minute to prepare the answers.

Hello, I am CSO, Lee Jung-soo, and I will first try to give you an overall answer to your questions, and I think there will be some comments added by my colleagues here. I think a backdrop of your question I can refer back to one of the answers that I've made earlier today about the boosting our efficiency, improving capital and K-ICS ratio. And I think there is an assumption that this is the main reason for the merger, if the merger happens, and then what kind of objectives and if necessary additional capital boosting measures would be required. I think that's the essence of your question. In the short term, if I repeat my answer that I gave earlier, one of the main purposes of the review that we are conducting on the merger is about efficiency and it's really to your question, stable and effective K-ICS ratio, and primarily in terms of additional capital supplements, we do not have any confirmed measures in the group. So if the merger can help maintain stable K-ICS ratio and help them with their sales and marketing activities, I think that will be one of our key priorities. And regarding the RWA allocation and especially regarding the securities company, according to -- when we were developing the financial plan for 2026, the RWA allocation to the securities company was higher than the bank and other subsidiaries. Even in early 2026, the growth of RWA was highest in the securities company. So in terms of growth rate, will be around more than 60% compared to 2025. Around 20% or more has been concentrated in the securities company. So RWA growth of the securities company, I think, will be stronger than previous years. And of course, all of those numbers were assuming the capital injection. So capital injection has been on our plan. Early on in 2026, the RWA growth rate of the securities company should be around 64%. And I think that will be sufficient for the securities company to leverage its RWA to deliver significant growth of profits and net income. And even after that, the nonbank subsidiaries and the bank's RWA, I think will be short. So to summarize, I think the securities company will continue to show higher RWA growth compared to the banks and other subsidiaries so that it can play a critical role as our main capital markets player. And I think that will be continue to be supported by the group.

We do not have any more questions in the chat box. So we will conclude the earnings call here. If you have additional questions, please contact our IR team. This will conclude the Q&A session and the 2026 Q1 Earnings Call of Woori Financial Group. Thank you for your participation today. [Statements in English on this transcript were spoken by an interpreter present on the live call.]