By Woori Financial Group (WFG) reported a solid financial performance in its Q3 2024 earnings call, with a notable year-on-year net income increase and a strong return on equity. Despite some challenges, the Group demonstrated effective cost management and a commitment to enhancing shareholder value. The announcement of a cash dividend and the introduction of a corporate value-up plan were among the strategic highlights aimed at maintaining stability and fostering growth.
Key Takeaways
Woori Financial Group’s cumulative net income for the first three quarters of 2024 increased by 9.1% year-on-year to KRW2.6591 trillion.
Q3 2024 saw a net income of KRW903.6 billion, marking the second consecutive quarter above KRW900 billion.
The return on equity (ROE) for the Group stood at 10.82%.
Net operating revenue rose to KRW7.9927 trillion, a 6.6% increase from the previous year.
The Group declared a cash dividend of KRW181 per share.
Plans to improve the CET1 ratio to 12.5% by early 2025 were confirmed.
A commitment to digital innovation was evident with the planned rollout of an integrated banking app by early 2025.
Company Outlook
Woori Financial Group is aiming for a CET1 ratio of 12.5% by early 2025.
An integrated banking app and other digital services are in the pipeline for release by early 2025.
The Group has set a target for core deposit balance to reach around KRW300 trillion by the next year.
Bearish Highlights
The net interest margin (NIM) declined to 1.67% in Q3 2024.
Credit costs increased due to economic conditions.
The cost-to-income ratio is projected to rise to around 42-43% in Q4 2024.
Bullish Highlights
Non-interest income saw a significant increase of 53.2% to KRW1.3781 trillion.
Total loans grew by 5%, with corporate loans up by 4.3% and household loans by 6.2%.
The Group maintains a robust non-performing loan (NPL) ratio of 0.55% and a coverage ratio of 152%.
Misses
There was a decline in NIM by 7 basis points to 1.40% in Q3 due to higher interest rates on time deposits.
Q&A Highlights
The Group is implementing over 30 measures to boost core deposits, with positive impacts expected from July onwards.
Risk-weighted asset growth is targeted to remain within 4%.
Ongoing IT investments and branch rationalization are part of the strategy, with a reduction of 23 branches as of September.
Capital management strategies are in place to address potential impacts from rate cuts and insurance firm acquisitions.
Woori Financial Group’s earnings call underscored its solid performance amid economic challenges. The Group’s proactive measures to manage costs, increase core deposits, and invest in digital innovation signal a strategic approach to maintain growth and stability. With the Group’s focus on capital management and shareholder value, Woori Financial Group’s outlook appears cautiously optimistic as it navigates the evolving financial landscape.
InvestingPro Insights
Woori Financial Group’s (WFG) recent financial performance aligns with several key metrics and insights from InvestingPro. The company’s strong Q3 2024 results are reflected in its attractive valuation metrics and recent market performance.
According to InvestingPro Data, WFG’s P/E Ratio stands at 4.44, indicating that the stock is trading at a relatively low earnings multiple. This is consistent with the company’s reported increase in net income and could suggest potential undervaluation. Additionally, the Price to Book ratio of 0.38 further supports the notion that WFG may be undervalued relative to its book value.
The company’s solid financial performance is also evident in its revenue growth. InvestingPro Data shows a quarterly revenue growth of 28.3% in Q2 2024, which aligns with the reported increase in net operating revenue mentioned in the earnings call.
InvestingPro Tips highlight that WFG is a “Prominent player in the Banks industry” and has “maintained dividend payments for 11 consecutive years.” These factors underscore the company’s stability and commitment to shareholder value, as evidenced by the announced cash dividend in the earnings call.
The stock’s recent performance has been strong, with InvestingPro Data showing a 3-month price total return of 12.65% and a 1-year return of 41.96%. This positive momentum is reflected in the fact that WFG is “Trading near 52-week high,” currently at 96.69% of its 52-week high price.
It’s worth noting that InvestingPro offers 11 additional tips for Woori Financial Group, providing investors with a comprehensive analysis of the company’s financial health and market position. For those seeking a deeper understanding of WFG’s investment potential, exploring these additional insights on InvestingPro could be valuable.
Full transcript – Woori Financial Group Inc (WF) Q3 2024:
Han Hong Sung: Good day everyone. I am Han Hong Sung, Head of Investor Relations at Woori Financial Group. I would like to express my sincere gratitude to all of you for taking the time out of your busy schedule to participate in today’s Woori Financial Group’s Earnings Call. Joining us on the call today are Mr.Lee Sung-Wook; the Group CFO; Mr. Jong-Yong Yim, the Group CEO [ph], and Mr.Park Jang-Geun, the Group’s CRO. Today’s call will begin with the presentation on our business performance by the Group CFO, Mr. Lee Sung-Wook, followed by a Q&A session. Please note that simultaneous interpretation is available for our international investors. With that, let us begin the presentation on Woori Financial Group’s earnings for the third quarter of 2024.
Lee Sung-Wook: Good afternoon. I’m Lee Sung-Wook, CFO, at Woori Financial Group overseeing the Group’s financial operations. Let me now walk you through our business performance for the third quarter of 2024. Please refer to Page 3 of the earnings report posted on our website. First, let me elaborate on the Group’s net income. As of third quarter of 2024 Woori Financial Group’s cumulative net income increased by 9.1% year-on-year reaching KRW2.6591 trillion, surpassing last year’s total annual performance by approximately KRW150 billion in just three quarters. The Group’s net income for Q3 stood at KRW903.6 billion which represents a slight decrease versus previous quarter. However, it remained above the KRW900 billion level for two consecutive quarters, exceeding market expectations. Thanks to our strong revenue generation capabilities and stable cost management, the Group’s ROE came in at 10.82%. Also, the Group’s cost-to-income ratio remained below 40% for the second consecutive quarter, demonstrating the Group’s ability to control costs. Meanwhile, the Board of Directors on October 18 [ph] approved a cash dividend of KRW181 per share which has been publicly disclosed. Let me now turn to the Group’s net operating revenue. As of Q3 2024, the Group’s cumulative net operating revenue grew 6.6% year-on-year to KRW7.9927 trillion, and on a quarterly basis to KRW2.7122 trillion in line with the previous quarter. The stable top line performance was achieved despite margin contraction due to falling market interest rates supported by robust interest income coming from strong asset growth across all segments, as well as significant increase in non-interest income, primarily driven by fees and commissions across all domains. In other words, our ongoing efforts to diversify revenue streams have started to bear fruit. Let me now move on to credit costs. As of third quarter, the Group’s cumulative credit costs amounted to KRW1.2546 trillion with a credit cost ratio of 0.44%. Sluggish domestic demand and the prolonged impact of high interest rates led to a rise in current credit costs with the NPL ratio, an indicator of asset quality, standing at 0.55% for the Group, and 0.21% for the bank. Our NPL coverage ratio, a measure of our loss absorption capacity, is 152% for the group and 270% for the Group, which is among the healthiest in the industry. Let me now go into capital ratio and capital adequacy. As of the end of September 2024, the Group CET1 ratio was expected to be around 12%. Despite the appreciation of the Korean won in the quarter, strong asset growth kept the CET1 ratio at a similar level to the previous quarter. Looking ahead to the fourth quarter and 2025, the Group will prioritize improving it’s capital ratio which serves as the foundation for both, growth and shareholder return. Now, let’s take a more detailed look at the Group’s business performance by segment. Please refer to Page 4 of the materials. First, let me address the Group’s net operating revenue and NIM. For the first three quarters of 2024 the Group’s cumulative net operating revenue was KRW7.9927 trillion, up 6.6% year-on-year, while quarterly results were in line with the previous quarter at KRW2.7122 trillion. Meanwhile, the bank’s NIM for Q3 was 1.40%, and the Group’s NIM, including the card business was 1.67%, both declining by 7 basis points versus previous quarter. Regarding margin compression, the recipient decline in market interest rates was reflected in asset repricing. But in terms of funding, increased demand for time deposits ahead of anticipated base rate cuts and increased funding needs due to the overall rise in lending within the banking sector led to sustained cost pressures which has narrowed the loan-to-deposit interest rate spread. In October, the Bank of Korea’s Monetary Policy Board, citing weak domestic demand and slowing inflation, lowered the base rate by 25 basis points for the first time in 3 years. As for concerns about future margin contraction following the interest rate pivot, we believe the impact has already been largely reflected in lower market interest rates. In periods of falling interest rates, the Group will focus on increasing core deposits, engage in proactive ALM management and reduced funding costs at our non-bank subsidiaries to actively prepare for any downward pressure on NIM. Meanwhile, the Group’s cumulative interest income for the third quarter amounted to KRW6.6146 trillion, maintaining the same level as the previous year despite narrowing margins as asset growth offset such impact. Next, I will give an overview on asset growth and loans. Total loans of the bank stood at KRW340 trillion as of September 2024, which is a 5% increase from end of June. Corporate loans increased by 4.3% from June to KRW191 trillion, thanks to balanced growth of large corporates and SME loans. For households, demand for mortgages including policy mortgages grew considerably recording a 6.2% growth in Q3 to reach KRW145 trillion. In Q3 property transaction volume increased, driven by the Greater Seoul area and with the DSR Phase 2 set to come in September, temporary demand for mortgages was strong. However, household loan growth peaked in August, and has significantly slowed down in September, implying downward stabilization in Q4. While the financial markets, including interest rates and FX [ph] rates are overall stabilizing, the U.S. Presidential elections, geopolitical risk in the Middle East, and possibility of economic slowdown are causing uncertainty at both, home and abroad. Against this backdrop, the Bank and the Group will consider asset settlements and capital adequacy as top priority to ensure quality asset growth. Next is deposits. As of September 2024, total Korean won stood at KRW327 trillion, which is a 5.5% increase from June. However, the growth of core deposits was weak given high demand for time deposits as the Bank of Korea was expected to cut rates. Keeping the rate cut cycle in mind, in order to defend margin and secure stable funding base, close cooperation within the Group will continue to increase core deposits. Meanwhile as of September 2024, the Bank’s LTD [ph] was 98.8% and is maintaining a stable buffer above regulatory requirements. Next, I will go over non-interest income and cost; please refer to Page 5. I will go over the Group’s non-interest income. The Group’s non-interest income upto Q3 was KRW1.3781 trillion, which is a 53.2% YOY increase driving top line growth. Favorable market conditions generated significant profit growth from marketable securities, and fee income was above KRW500 billion for three consecutive quarters, evidencing that there has been level up across all bank and non-bank subsidiaries. Once downward rate movement becomes more evident the business environment of financial investment and IB businesses will improve and demand for asset management services is expected to grow. Against this background, we will continue to expand sales efforts to boost non-interest income. Meanwhile, Woori Financial Group is concentrating efforts to strengthen the competitiveness of its non-bank businesses. In August, we merged Woori Investment Bank and F&I Securities [ph] to relaunch Woori Investment Securities. The Group also signed an FPA with Toon Yang [ph] and ABL Insurance to lay the foundation to enter the insurance industry. The Group is making multi-faceted efforts to diversify sources of non-interest income and maximize synergy. Next is SG&A. Cumulative SG&A upto Q3 2024 was KRW3.1581 trillion which is a 3.4% YOY increase. However, SG&A in Q3 alone was KRW1.0571 trillion, which is a slight decrease of 1.1% from the previous quarter. Group wide efforts to minimize current expense and to optimize channel and workforce to boost cost efficiency have enabled the CIR to stay below 40% for two consecutive quarters. In Q3, the Group CIR was 39.6%. While making investment for the future such as in boosting brand value and digital and IT systems will work to reduce unnecessary current part of Group wide efforts to continuously reduce cost. Next is credit cost. The Group’s cumulative credit cost upto Q3 was KRW1.2546 trillion, which is a 6.3% YOY increase. Credit cost in Q3 alone was KRW479.1 billion, which is a 17.1% QOQ increase. Slowdown of the real economy and restructuring of the real estate PF market resulted in higher delinquency rates of the non-bank sector pushing up credit cost. However, the delinquency of the bank was stably managed. The NPL ratio was 0.21% and the coverage ratio was 270%, showing robust asset quality. Woori Financial Group is strengthening monitoring of market environment and actively selling and writing off bad debt to prudently manage the Group’s risk factors. As Central Banks around the world cut rates, concerns on market soundness are decreasing. However, the Group will contain conservative and pre-emptive risk management to strengthen loss absorption capacity. Now, I will go over capital adequacy and the shareholder return policy. Please refer to Page 6. As of September 2024, the CET1 ratio of the Group is expected to be 12% which is to the previous quarter. Given the declining FX rates in Q3, the CET1 ratio is being managed at stable levels, and the capital ratio was mainly the result of loan growth which was in line with market demand. The Board of Woori Financial Group recognizes the importance of diligent capital management to boost corporate value. To achieve CET1 ratio of 12.5% early in 2025, the Group will actively manage asset growth in Q4 while prioritizing improvement of the CET1 ratio in the 2025 finance plan, which is currently being developed. Also, the Board has considered the Group’s quarterly dividend policy and market expectations to declare a cash dividend of KRW181 per share. Meanwhile, during the earnings call held on July 25, we were the first in the banking industry to announce the corporate value-up plan. The diverse value of measures announced at that time are currently being implemented via various methods at respective speeds. We will continuously communicate with the market to review, assess and update its progress. For the CET1 ratio, we will consider the volatility of financial markets, regulatory changes and the progress of M&A activities comprehensively to actively control growth and diligently manage RWA to make utmost effort to reach a CET1 ratio of 12.5% in 2025 early. Since announcing the value-up plan, the Group has been receiving heightened interest from overseas investors. The ownership of foreigners has risen significantly, and the Group has been included in the Korea Value-up Index. Our value-up efforts are being recognized by various means and to meet heightened market expectations, the Group is committed to its quarter business as a financial group while working to enhance shareholder value to grow together with our shareholders. This will conclude the earnings results for 2024 Q3 of Woori Financial Group. Thank you.
Operator: Thank you very much. We’d now like to engage in the Q&A session. [Operator Instructions] The first question is GS Investment Securities, Mr. Nami Nook [ph]. Please proceed with your question.
Unidentified Analyst: Good afternoon. I am from GS Investment Securities. I’m Nami Nook [ph]. Thank you very much for the opportunity. I do have a question with regard to CET1 ratio. So for this quarter, the CET1 versus previous quarter was flat. So I would like to understand some of the reasons behind that? And then — and additionally, in the previous earnings call, you have mentioned that the guidance is 12.2% for year-end for CET1 but with the appreciation of the won, I would like to understand whether this is still feasible? And with regard to the CET1, it’s sensitivity to Forex, and also with regard to the RWA related plan going forward; can you also share that with us? Thank you.
Unidentified Company Representative: Yes. Thank you very much for the question. Please bear with us for just a moment as we prepare to answer your question. Yes, I believe that this is an area of key interest. So with regard to the CET1 ratio, let me give you some more specific information. So from 12% from year-end of June and now September, it’s similar to year-end of June right now at 12%, and the reason has to do with Forex. We’ve been seeing the appreciation, and with that there will be improvement in the capital ratio. And based on our company standards, it will be 3 bps per 10 won [ph]. And in the presentation as was mentioned, if you look at the market demand and future growth — in future profitability within third quarter, we have increased our assets which has led to increased weighted assets, and that’s why we were now — we are now maintaining this at levels of June-end. In the fourth quarter, the Group will be focusing on it’s priorities on asset management to improve capital ratio there, various ways that we’re looking into so that we can achieve the 12.2% target. And to give you some more specifics in terms of corporate loans, it’s about pricing and pricing adjustments that would help us defend any drop in rates. And in terms of household loans, it’s about responding and reacting to the national policy. And in September, there were risk assets that slightly ticked up, and this we will make sure to bring this down as quickly as possible. And there are also other ways and measures that we are looking into, and the Group will prioritize all efforts so that we can achieve the target set forth for CET1. And also I think there could be questions; so if I may continue on to respond. In the case of CET1, as mentioned, whether we can achieve 4.5% by year-end of 2025, as was already mentioned. In 2025, 12.5%; in order to that from fourth quarter of this year till the end of 2025, we will continue on to prioritize improvements in capital ratios. So this was already discussed at the BoD meeting, and there will be specific plans put together. And as was mentioned, recently the Forex rates went up, exchange rates went up, so it makes it very difficult but we will put in our best efforts to make it happen. And until 2025 about improving our ROE and as in terms of differentiating in ROI WA [ph]; what we want to do is enable 4% for nominal economic rates, less than 4% is what we’ll be doing to in terms of managing our asset growth and this has been already discussed with the BoD. So there could be some slightly tweaks on the measures going forward but I do want to mention that the guidance would be around 4% by year-end. So that’s what was discussed. And if we do see a growth of 4% what this implies is that, if we look at the overall structure, the ROE; if it’s 10% it means that we’d be a growth of 7% to 8% which will help us maintain the capital ratio as of last year. So then with 4% growth, if we also make sure to find ways to manage the ROE, we believe that there will be an upward uptick of 40 to 50 bps [ph] once again by next year end achieving 12.5% as quickly as possible would be our key focus. Thank you.
Operator: Thank you for the question, and we’ll move on to the next. Next, we have [indiscernible] from NH Investment Securities. Please go ahead.
Unidentified Analyst: Good afternoon. Thank you for the opportunity today. I have two questions. First, you just mentioned but in Q3 the NIM declined significantly. What is your outlook for Q4? And second question is about the quarterly dividends. So, the dividend went up in Q4 compared to Q1 2023. So for 2025, I am wondering if we’re going to equally distribute the dividends across quarters like other financial groups?
Unidentified Company Representative: Thank you for those questions. Please give us just one minute to prepare the answer. Yes, the NIM of Q3 was around 1.40% [ph], that 7 bps decline from previous quarter. This is because of the Korean won spread reduction and pre-emptive asset growth, which means that we paid higher interest rates for the time deposit; so this resulted in about 7 bps [ph] decline. But from Q4 onwards we will be actively managing the assets and also the capital; so we’re going to be managing capital and NIM together simultaneously. So according to our projections, in Q4 — thanks to those active management measures, it should be at least around Q3. And next year, structurally, if there’s 25 bps cut, NIM goes down by around 3 bps throughout the year. So in 2025, if the rates go down by 75 bps, theoretically it will be 9 bps downward. But I think we can manage this within 4 to 5 bps decline, so our 1.3% [ph]. Especially recently, the treasury rates went down to around 2%, and the low cost deposit we plan to increase and we plan to reprice our assets to defend the NIM. As we just mentioned, next year asset — the RWA growth should be within 4% next year. That should also contribute to defending the NIM. So overall in 2025, NIM should be around high 1.3%. And then, regarding your second question, the equal distribution of dividends across quarters. I understand that some financial groups equally pay the dividends across the quarters. So for us, when we announced the dividends this year, we said it will be around 50% and we said we were going to equal distribute around March, June and September, and we’re going to consider all of the different elements before declaring the dividends for each respective quarter. So the real dividends increased this year; and like we announced today, according to the current dividend policy we made the dividend decisions. But regarding your question in 2025, we will be discussing that topic with the Board of Directors, and I think we will be able to communicate that to the shareholders and investors in February 2025.
Operator: The next is from Hana Investment & Securities, Kim Doha [ph]. Please proceed with your question.
Unidentified Analyst: Yes. I’m Kim Doha [ph] from Hana Investment & Securities. So with regard to the investment in securities that was recently launched, so it’s through that we have the fund super-market [ph], the application — that’s probably the one business that we have heard. But I would like to understand on the schedule for any other services. And I do know that you’re also looking into an integrated on apps; so in terms of the applications development schedule, what’s that like for Woori Investment & Securities?
Unidentified Company Representative: Yes. Thank you very much for that question. Yes, I am [indiscernible]; I am in-charge of the digital business. In the case of MTS, by year-end we will be launching the service; so that’s the plan right now. And then until first quarter of next year, an integrated super app, something that’s pursued by the bank, an integrated banking would have the services. And then, we would be integrating the IT systems where it would be an integrated MTS, and that would be by the second half of next year.
Operator: Yes. Thank you very much. We will move on to the next question. Next question is from SK Investment Securities, Mr. Soul [ph].
Unidentified Analyst: Thank you for the opportunity today. I have questions regarding credit cards. I don’t see any large scale PF credit cost these days but I think ordinary credit cost is on upward trend. So towards year-end and early next year, what would be the amount of credit cost that you are projecting?
Park Jang-Geun: Thank you for the question. My name is Park Jang-Geun and I’m the CRO. Excluding one-off, looking at the ordinary credit costs, it’s 42 bps before interest rate cuts because of the high interest rate environment and high delinquency rate resulting from that. And the restructuring of the real estate PF market, credit cost this year should remain at current levels; I think it will be similar. Next year if the PF restructuring is completed and rates start to go down, I think it will show gradual improvement. So I think it can go down to below 40 bps. Thank you.
Operator: Next from Korea Investment & Securities, Mr. Pick Too Sun [ph]. Please proceed with your question.
Unidentified Analyst: Yes, I’m from Korean Investment & Securities, Pick Too Sun [ph]. I do have a question with regard to your core deposits. So I believe that this is an area of your focus; however, we have to take consideration the challenging market conditions. And I believe that in terms of the improvement, it seems a bit delayed or subdued but as mentioned, in terms of the time deposit related policy, rate cuts; with that we believe that going forward there will be some faster improvements. So in the future, with regard to core deposits, the average balance or the end balance, the target that you have, what would that be? Or if you do have any targets, please let us know. And then also with regard to core deposits, in order to achieve that target is there may be specific deposits that you’d be targeting going forward? Anything that was discussed amongst the management?
Unidentified Company Representative: Yes. Thank you very much for that question. Please bear with us for just a moment. Yes, next year or this year it would be the same but increasing core deposits, it’s about — it helps us actually dealing with the downside of NIM. So for us in the second half, at the bank segment increasing core deposits, let’s say to maybe about 30 measures are in place basically. So we have a bank-wide type of measure with the [indiscernible] corporate household, many ways to increase the client segment; so there are more than 30 means or measures to do that. And also in the non-bank segment, while it’s true that there are many areas that benefit from the bank segment, but of course, we have clients in the non-bank segment. And we believe that really having them buy these core deposits is also something that we want to pursue as a Group. So starting from July or the second half of this year, we’ve been seeing some positive impact from those measures, and in the future we believe that it will increase and it will get better, especially since we launched these measures in the second half of this year, next time or next year we do believe that we’ll be seeing some faster paced improvements. And there could be — well, many measures — more — many conditions, but with the rate cuts if we looked at our core deposits, it’s around KRW92 trillion as of September. So next year, the prospects or targets has not been set forth but my personal take is that it would be a target of KRW300 trillion to KRW100 trillion. And for that to be possible, there will be many measures that we will be devising. So, thank you.
Operator: We’ll move on to the next question from [indiscernible].
Unidentified Analyst: Good afternoon. You mentioned RWA growth within 4%; that was your target. But you have launch of the investment securities, I don’t think the insurance company will be a big issue, but asset growth will definitely be a priority for the investment securities arm. So, is it possible to keep asset within 4%? And the current margin is improving. The non-bank subsidiaries — funding costs I think is going down. What would be the reason for that?
Unidentified Company Representative: Thank you for the questions. Please give us just one minute to prepare the answers.
Lee Sung-Wook: Good afternoon. I am Lee Sung-Wook, and you just mentioned the securities firm. So Woori Investment Securities; I think you are referring to RWA of Woori Investment Securities, which is around KRW5 trillion at the moment. And so, I understand where you are coming from. The Bank has RWA of above KRW200 trillion; so investment securities — of course, we need to double those asset growth of the securities firm; it’s very small at the moment. So even if it reports high asset growth, it does not have strong impact to the overall group because the RWA size of the bank is so big. So we will be trying to control the RW asset growth of the bank and some of the other non-bank subsidiaries; so the target will be to manage the overall Group’s RW asset growth, and that should be within 4%. And you talked about the credit card margin improvement; recently the credit card loans increased, and that has been written in the press recently. And those credit cards loans tend to have higher interest rates than some of the other assets and products. Revenue is also an increasing trend; all of those factors combined, the Q3 profit increase has been more evident compared to the first half.
Operator: Thank you. Yes, we have Yuan Joon [ph] from HSBC Securities.
Unidentified Analyst: Yes. Despite challenging time, thank you very much for that good performance. I have two questions. The first question has to do with the C/I ratio which has been quite interesting; so it’s been dropping. So is there a specific C/I ratio that we’re looking into? Any targets, please share. And the second question, with regard to acquisition of insurance firms, I think that there could be some upside with regard to the increase in net income. But according to what’s covered by the press, I believe that the kicks [ph] ratio of ABL is — has dropped to about 140%, and also due to the liabilities discount ratio, we believe that the kicks [ph] ratio will drop further. So then, with regard to that would there be a possibility or concerns of a capital injection that would be necessary?
Unidentified Company Representative: Yes. Thank you very much for the question. Let us prepare the response. Just a moment, please. Yes, let me respond to the question. The run-up to the third quarter, it was 39.6%; the C/I arm. So then, in the fourth quarter it’s true that our expenses have been focused there; so it would be around 42%, 43% in terms of the C/I arm. And then next year, the target — as of current there are, of course, IT investment; well, this will be ongoing in terms of improving the brand. And I’m sure that was covered by the press where we are engaging and integrating in the branches, finding a way to rationalize personal management; so this will continue on. So, we believe that there were about 23 less branches by the end of September. So in terms of the C/I ratio, we will continue on to work on that. So next year, according to the plan it would be early 40% or that would be 2025; and then in 2026 and it would be less than 40% from 2026 and onwards. So that would be the long-term plan. So next year, the target would probably be around 40% levels, and we will have to discuss this with the BoD, the Board of Directors, but that would be basically the guidance. And then with regard to the acquisition of insurance firm, and also the kicks [ph] and the capital ratios. As was mentioned, the rate cuts are anticipated, therefore kicks [ph] would be something that we would have to manage. And then there is CSM and additional margin related requirements, something that we would like to look into. But then if you think about the capital ratio of the Group, that would be the focus and that would be how we will be dealing with capital management. And in June, ever since the policy, the ABL — for ABL it was 145% but in September there was about KRW300 billion from Toon Yung [ph], from the junior loans, and then KRW200 billion from ABL. In the case of Toon Yung [ph], it would be 180%; and for ABL, as of June end, we don’t have the numbers for September, it would be 165% due to the subordinated loans. So in the future, we will have to look into measures that will not impact the Group. And if so, we would be increasing the capital if necessary. So there will be various measures that we would be taking into account so that any impact on the Group would be minimized. Thank you.
Han Hong Sung: I don’t believe we have any questions pending. And I think we touched a lot of different topics today. So, I would like to conclude the Q&A session here. If you have any further questions, please contact us, and we will try to get back to you as quickly as possible. This will conclude the 2024 Q3 earnings call. Thank you for your attendance today.
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