Shinhan Financial Group (KRX:055550) Q3 2026 Earnings Call

0:00 This meeting is being archived.

2:18 Hello, everyone. The weather is getting cooler today, so we are going to have the last performance announcement of the year. I am Park Cheol Woo, in charge of the IR part. Thank you to all of you who attended the third quarter performance announcement of the 26th year of Shinhan Financial Group Co Ltd. while you were busy. Today's performance announcement includes Group CFO Jang Jung-hoon, Group CSO Ko Seok-heon, Group AX Digital Choi Ok-Jae, Group CRO Na Hoon, Shinhan Bank CFO Kang Young-Hoon, Shinhan Card CFO Lee Jung-Bin, Shinhan Investment CFO Lee Jae-sung, and Shinhan Life CFO Joo Sung-Hwan. I would like to ask for your interest and participation in today's meeting.

3:04 The order of the performance announcement is the presentation of Group CFO's 3-minute business performance in the 26th year. We will have a Q&A session with the participants. Then, we will have a presentation about the management performance of Mr. Jang.

3:26 Hello, I am Chang Jung Hoon, CFO of Sinan Financial Group. First of all, I would like to thank everyone who participated in the third quarter of the year of 2026. Now, I will explain the performance of the third quarter of the year of 2026. This page is the highlight of the performance of the year. In the end of the third quarter of 2026, Group CET won 13.62% and maintained a stable level. Based on this, the Board of Directors agreed to pay a total of 4.5 billion won of self-sufficiency interest and a third quarter of 740 won in cash. The self-sufficiency rate will be divided into 2.5 billion won by the end of next year, and the annual self-sufficiency rate will be increased by 28% to 1.6 trillion won.

4:23 On the other hand, the annual DPS will be 2,960 won, which is expected to increase by 14.3% compared to last year. Thank you very much. Thank you. In the third quarter of 2026, the short-term net profit decreased by 12.9% compared to the previous quarter and was 1.5846 billion won. Group's ROE and ROTCE recorded 11.9% and 13.4% improvement of 0.9% compared to the previous year.

5:19 As you can see from the official statement, the party has decided to purchase about 77% of Lotte's loss insurance at 6,933 billion won. This is a decision to strengthen the portfolio of the group's insurance business and use its capital to increase medium-term profitability and capital efficiency, and the purchase loan will be made through the relocation of capital owned by the group without any external contributions. Group's CET1 ratio is estimated to be about minus 19BP, and we believe it will be able to be managed when considering the current CET1 ratio. The fundamental factor is the decision made after reviewing various alternatives, and we expect it to be helpful in improving the continuity of the Group's ROI by normalizing Lotte's loss insurance and removing profitability.

6:13 There is still a lot of work to be done to complete the procedures related to acquisition and integration, but we will communicate and listen to the market at every necessary time. Please give a lot of support and feedback to the investors. Please refer to the investment judgment as a collection of various indicators representing the stock value of Shinhwa. This is 4-page capital. In the end of the third quarter of 2026, the Group CET1 ratio recorded 13.62% and was improved by 12BP compared to the previous quarter. This is a result of the reduction of the Group RWA by 1.6% compared to the previous quarter due to the decline in the exchange rate and the additional effort of selective asset growth at the center of profitability. We will do our best to maintain a stable capital ratio through internal efficiency and strategic resource distribution while providing enough funds for the future.

7:08 Please refer to the data on assets and bonds on page 5. This is the profit of the group on page 6. In the third quarter of the Group, the net profit of the 경비차감전 영업이익 decreased by 13.2% compared to the previous quarter due to the reduction of the non-profit profit. The short-term profit decreased by 12.9% due to the reduction of the net profit of the 경비차감전 영업이익 and the well-managed cost factor. I will explain the details in detail from the next page. The interest rate of the group is 1.8% compared to the previous quarter, despite the fact that the NIM of the bank fell 3BP compared to the previous quarter. The NIM of the bank rose by 3BP compared to the previous quarter, while the NIM of the bank rose by 3BP compared to the previous quarter, while the NIM of the bank rose by 3BP.

8:04 Thank you for watching. Please subscribe and like. The group's interest rate decreased by 45.5% compared to the previous quarter due to the deterioration of the capital market and the uncertainty of the financial environment. The interest rate decreased by 27.7% compared to the previous quarter due to the deterioration of the capital market. The interest rate decreased by a large extent compared to the previous quarter due to the loss of bond evaluation due to the rise in market interest. The profit of the insurance-related interest continued to increase the loss of old cars and the influence of change in the guider line, and it decreased compared to the previous quarter. As such, the profit of the 3-minute visa showed a overall deterioration due to the change in the market, but each business sector responded to this and is planning to focus on securing stable revenue base. Next is the 9-page review fee and the commission fee.

9:09 Group's budget has been reduced by 5.0% compared to the previous quarter due to a decrease in seasonal tax revenue and a decrease in the recognition of the stock market as reflected in the previous quarter. As a result, the net profit margin is recorded at 37.6% and is still managed at a stable level. Group's loan costs have increased for the first half of the year due to the continued settlement of preemptive deposit. However, the loan cost was recorded at 42BP, which was improved by 4BP compared to the previous year, and has been maintained stably within the planned management range of the year. In the meantime, while maintaining conservative deposit policy, we will continue to conduct preemptive volatility management and risk assessment. Next is the 10-page Group's asset volatility index.

9:58 The NPL coverage ratio of the group was reduced by a small margin, but it was recorded to be 115.48%, which was reduced by a small margin compared to the previous year due to the impact of the bank's loss of financial assets and asset recalibration. The bank interest rate has improved by 5BP compared to the previous quarter, and the card interest rate has increased by 2BP compared to the previous quarter, but overall, it maintains a manageable level. However, while the recovery rate of the economy is still difficult, as the credit risk continues to be centered on some interest rates, we plan to continue thorough monitoring and preemptive risk management of asset volatility in the future. Please refer to the next page for details on Group's loss absorption capacity and sales.

10:46 Next is the 12th page, Group's profit. Shinhan Bank's profit from product sales, such as funds, bank cards, and credit cards, has decreased, but it has decreased by 5.9% compared to the previous quarter, minimizing the actual change in profit based on strong interest. Group companies in the capital market, such as Shinhan Investment Fund and Shinhan Wealth Management, have decreased their performance compared to the previous year due to the reduction in stock trading interest and the increase in market volatility, but they are still maintaining a strong profitability compared to the previous year. Shinhan Card has improved 68.4% compared to the previous year due to the increase in business sales while the uncertainty of the business environment continues.

11:33 SHINHWAN CAPITAL's revenue has decreased by 29.7% compared to the previous quarter due to the continued burden of payment costs and the diminishing profitability of SHINHWAN LINE. SHINHWAN LIFE's revenue decreased by 31.3% compared to the previous quarter due to the decrease in the number of insurers and the decrease in the evaluation of SHINHWAN LINE. SHINHWAN LIFE's revenue decreased by 31.3% compared to the previous quarter due to the decrease in the evaluation of SHINHWAN LINE. SHINHWAN LIFE's revenue decreased by 31.3% compared to the previous quarter due to the decrease in the evaluation of SHINHWAN LINE. SHINHWAN LIFE's revenue decreased by 31.3% compared to the previous quarter due to the decrease in the evaluation of SHINHWAN LINE. SHINHWAN LIFE's revenue decreased by 31.3% compared to the previous quarter due to the decrease in the evaluation of SHINHWAN LINE. Group's foreign business profits have decreased by 9.9% compared to the previous quarter, despite the strong profit-making power of major foreign lawmakers. SBC has continued to grow stably despite the decline in the exchange rate due to the growth of the real estate market and the increase in interest rates due to the rise in the standard interest rate. Bank MMC is also continuing a good performance trend, focusing on IB business growth.

12:29 On the other hand, due to the uncertainty of the global financial market, such as the rise in interest rates in major countries, the cost of delivery and delivery in some countries is increasing, but it is managed at a level that can be controlled overall. Next, from page 14 to page 15, we will discuss digital and sustainable business activities. From page 16, we will discuss the financial status of each Group Co Lt and detailed benefits, operations, and delivery status, so please refer to them. This concludes the presentation. Thank you for listening.

12:59 Thank you. We will now take questions from the audience. If you have any questions, please raise your hand on Zoom. Please press the button. We will now take the first question. Please ask the question. Yes, we have a question. Please ask the question, Mr. Won Jae-woong of HSB Securities.

13:45 Thank you for the question. I have a question about you. Last week, I think the CD rate has a lot of impact on the rise in loan rates in other banks. But as far as I know, we know that the structure is a little different. I don't know if this is a co-fix or a year-long bank account. What is the main factor of interest rate impact on corporate loans and bond loans? In the fourth quarter, do you expect NIM to rebound?

14:34 And if it does, do you expect it to rebound because of the loan interest rate or funding? Lastly, there was no big difference between Group Lim and Bank Lim. I thought Card Lim would have fallen more, but it wasn't. Is it because the repricing cycle is a little different? Or is it because the repricing cycle is a quarter, so Card Lim can fall a little more in the quarter? I would appreciate it if you could answer three questions related to Lim.

15:13 Thank you for your question. There are several questions. Please wait a moment while I prepare the answers.

15:30 Yes, you have a question about Bank NIM and Group NIM including cards. First, Bank CFO will answer about Bank NIM and I will answer the rest. Hello, I am Kang Yong-hong, CFO of Shinang Bank. Thank you for the question.

15:43 I will answer the question about what you have asked. I will first give a review of the overall situation and then answer the individual situation. In the third quarter, NIM increased by 1.58% compared to the previous year, but it fell by 3BP compared to the previous quarter. The standard interest rate is usually linked to the rise in NIM, so we expected that the standard interest rate in July and August would improve NIM to some extent. In the third quarter, we focused on the end of the month and expected an increase in additional interest rates in the market There was an increase in the rate of payment due to the increase in the rate of payment due to the increase in the rate of payment due to the increase in the rate of payment due to the increase in the rate of payment due to the increase in the rate of payment due to the increase in the rate of payment due to the increase in the rate of payment due to the increase in the rate of payment due to the increase in the rate of payment due to It is expected that the standard rate will be added one more time in the future, but it is expected that the quarter-finals will be concentrated and the monthly competition will continue to intensify, so it is expected that the current level of NIM will continue to be maintained until the end of the year.

17:14 In the fourth quarter, will we be able to make a comeback? As I mentioned earlier, I think we will be able to make a comeback by the end of the year. In the other quarter, the share of female celebrities linked to CDs is high, and so on. However, each quarter has a different standard. In the case of the 6-month quarter, There are about 60% of the total amount of the total amount of the total amount of the total amount of the total amount of the total amount of the total amount of the total amount of the total amount of the total There are a variety of questions, but the issues related to NIM are quite complicated, so it is difficult to predict the direction of NIM in the future.

18:27 We hope that NIM will gradually improve in the coming year due to the steady growth and the 6-month operating revenue. That's all I have to say about the bank.

18:47 I understand that you asked about the balance of the interest rate. As you just said, I think it would be better for you to judge that the balance of the interest rate of CD is a little smaller than that of other places. In terms of card NIMs, if I talk about the group NIMs, the cost of handling the cards has increased. It has increased by about 10pp compared to the previous quarter, but the balance of the difference has decreased a bit. And secondly, in terms of interest income, of course, the operating income has not increased that much, but rather, the interest income side, which creates interest income, has increased a bit, Of course, the NIM value of the card did not have a big impact on the direction of the bank, but I think I can say that it was not weakened or lost because of this part.

19:42 As the bank's CFO keeps saying, it used to be classic, if the interest rate rises, 2BP to 3BP, it will be improved right away. These paradigms are the ones that are putting the most pressure on NIMA. Despite the fact that we expect to see an increase in interest rates by November this year, We will continue to communicate with the market by continuing the three-month projection as the negative and positive factors are mixed together. Yes, I hope the answer to the question has been fulfilled. I will take the next question. The next question is from Kim Do-hwa of Hana Investment.

20:33 Please ask the question.

20:46 Thank you for your time. I'd like to ask you about the margin. I'd like to ask you about how much capital you've lost. In the case of the margin, our company's interest rate is high, and the interest rate is low, so we don't see it rising in the quarter. In fact, the bank interest rate has risen a lot since the quarter of last year. So if that's reflected a lot, I don't think it's because the margin didn't go up in the quarter, but I think we need to explain why the margin didn't go up so far. Looking at the numbers, we can't simply compare it to the bank's original loan, but the growth of the bank's issuance is still high compared to the increase in profitability. From the YTD, it seems that the issuance has increased more sharply, so even if the annual interest rate remains the same spread, the margin may be negative.

21:43 I think it's an environment where we need to think about why we needed this kind of transmission, even though it's not a country that we're aiming for. I think it would be good if you could tell us a little bit about this direction. I'm asking because I'm still concerned about the growth rate. The capital group has similar flows to other companies that have been announced earlier. It's probably because the exchange rate of stocks and bonds has changed a lot this time. I think it's the first time we've seen an AOCI decrease by 1.4 trillion won in QOQ so far. Originally, there was no change of more than 1 trillion won, but I don't think it's explained by the bank alone. Even though there are already a lot of losses in the stock market, there is a loss in the OCI.

22:33 Thank you for your questions. Please wait a moment while we prepare for your answers.

23:03 As for the margin, the bank CFO will answer first, and I will answer the rest. I will answer briefly about the content of the question. From the delivery side,

23:26 There is a part that is a bit out of stock compared to the previous year. The electricity budget is about 7.5 trillion won compared to the previous year, and the mobility is about 1.5 trillion won. Compared to the previous year, the stock is about 9 trillion won. The stock is out of stock. In terms of institutions and companies, the net profit margin has increased by about 25 trillion won. In conclusion, the overall profit margin has increased by about 25 trillion won compared to the previous year. However, the net profit margin of institutions and companies has increased and the net profit margin of businesses has decreased. Therefore, the net profit margin has decreased. I think there is a problem. Nevertheless, we had no choice but to do so because we have a regulation ratio for various funds. Because we have the NCR ratio and NSFR ratio, in order to maintain this, There was a lot of money coming in from the way of making a deposit, and it was reflected in the fact that the stock market went into the stock market a lot, and then it came into the third quarter.

24:45 In the process, the company's and the company's long-term budget has been reduced a little bit, and we are actively paying for the price of the company's long-term budget. In the process, the cost of delivery has gone up a little bit, As expected, the operating profit per capita was about 10BP, but the cost per month was more than 10BP, about 13-14BP, so the margin was a little higher. I think you can understand that NIM has been falling a little bit. As I said earlier, the bank's interest rate has been falling a little bit since July and August.

25:43 There are some cases like this. For example, if a woman is using a 6-month period, the period changes from the 6-month period to the 6-month period, and the period changes from a year to a year. In July and August, the increase in the interest rate of the bank due to the rise in the interest rate of the balance sheet, we see that the margin has been secured to a certain extent. We believe that the operating profit will continue to improve as the six-month period is approaching. We believe that the operating profit will continue to improve as the six-month period is approaching.

26:29 We believe that the operating profit will continue to improve as the six-month period is approaching. We believe that the operating profit will continue to improve as the six-month period is approaching.

26:44 I think we should change the topic a little bit. If we go back to what Kim Do-ha and Yong-geun said, First of all, as you said, the financial sector was already reflected from the beginning of the year. If we look back at the quarter NIM, it was about 1.55% in the third quarter, 1.58% in the fourth quarter, 1.60% in the first quarter, and 1.61% in the second quarter. In fact, in the beginning of the year, it was about 3BP, and in the third quarter, it was about 6BP. As the researcher just said, our current dilemma seems to be the possibility of controlling the delivery. As you said, the higher the example rate, the better our NIM is, but the example rate that we had at about 96% in the last 25 years In the first and second quarter, the interest rate dropped to 92.6%.

27:43 This led to the decline of NIM. This means that the delivery was not controlled. The reason why the delivery was not controlled was because the money moved to the stock market was transferred to the stock market through the stock market currency. In fact, I would like to say that we are concerned about NIM as if you are worried about that part. I think this is the capital side. I think it's because the peer groups haven't talked about it yet. When the exchange rate goes up, we say that the CET1 drops from 11 to 13 BP per 100 won, but if we break it down, the first one is, we went down about 180 won this time, right? So the exchange rate is now 1,358 won, and then the RWA has increased by 12 trillion won because of this.

28:56 However, there is an overseas company called Hwan-San Cha Sonic that is part of the interest rate fund. This part is rather reversed, so it is a logic that about 8,170 billion won is lost in this area. In other words, the RWA has decreased, and we have continued to communicate that it is about 4BP per trillion, but then it has increased by more than 40BP, so we have to improve the CET1, but this part of the profit margin of 810 billion won, as you just mentioned, because we are touching this from the OCI side, we are telling you that if we net it, it is 22BP. Secondly, if we subtract 8,170 billion won, In terms of FBOCI, we have a deficit of about 17 billion won.

29:47 As for the rest, Thank you very much. Jung Tae-joon,

30:49 Mr. Jung Tae-joon, you can ask your question now. Yes, go ahead. Can't you hear me?

31:01 Yes, I can hear you now.

31:07 Oh, I'm sorry.

31:18 I have one question. It may be similar to the previous question. You said that the margin for the fourth quarter will be flat due to the increase in competition. As you said, it seems that the funds for the back row will be reduced. As you said, the cost of the fourth quarter will be stabilized because it will be pre-contributed in the third quarter. If you can tell me where you are focusing on in terms of competition, I think it will be better understood. Thank you.

31:47 Please wait a moment while we prepare the answer.

31:49 Yes, this is the answer from the bank CFO.

31:57 Yes, this is the answer from the bank CFO. It's not just the party, but the other parties are also in similar situations, so I expect that the competition will continue until the quarterfinals. I expect that it will be less severe after the end of this year. Thank you. Let's move on to the next question.

32:40 This is a question from Jo Ji-hyun of J.P. Morgan.

32:48 Hello, thank you for the Q&A. I have a question about the interest rate. I think the interest rate was well defended when the trade interest rate decreased compared to the previous quarter in the third quarter. I think it's because it's all changed. Since the trade interest rate in the fourth quarter has become weaker than in the third quarter, I'm curious what you think about the interest rate, prospects, and growth rate in the fourth quarter and next year. As you can see, 12% of ROE achievement is achieved by private companies, including the stock market. What do you think about this? Another question is, when we received 12% of ROE target, we didn't consider the lottery, Thank you. Thank you for your two questions. Please wait a moment while we prepare for your questions.

34:10 As for brokerage, CF will answer and I will answer for the rest of the group and ROE direction.

34:24 Thank you for the good question. As you know, as we reached our peak in the second quarter, the exchange rate has dramatically decreased in the third quarter. The decline trend continues in the fourth quarter as well. However, as you know, it seems to be stabilizing from mid-October. However, in the fourth quarter, the investment psychology of individuals is still not alive. We are expecting the exchange rate to drop dramatically by the beginning of next year. However, we have been actively selling financial products since the beginning of this year, and we have decided to cover some of the reduced profits in the third quarter through sales of E-RES and bonds that correspond to medium-term profits. In addition to these financial products, we have also invested about 600,000 won in Solink through SuperSol, which is linked to a bank that we have been running since July.

35:29 We are still in the early stages, so we don't have a lot of sales, but if we continue to increase the amount of sales through continuous marketing and cover the product sales, we will be able to cover some of the brokerage revenue. In addition, in the third quarter, not only brokerage revenue, There are many factors that affect the overall business model in the financial sector, including product management and IP. However, as the quarter-finals are approaching, the interest rates are stabilizing and the deals are being organized, so I think that the normal strength of the quarter-finals will go up.

36:18 In the case of the defendant, we will continue to see the improvement of the credit interest, cards, and securities. In the case of the defendant, we will continue to see the improvement of the credit interest, cards, and securities. In the case of the defendant, we will continue to see the improvement of the credit interest, cards, and securities. We will continue to see the improvement of the credit interest, cards, and securities. On the second question, when we talk about ROE 12%, our mid-term target is to manage the ROE 10% to 12% section. Because it may be difficult to continue financially, but nevertheless, the minimum value is to exceed ROE 10%, and instead, we have a plan to go up to 12%. If you take a little bit of time to remember, what we added to that is, of course, we mainly talked about the total profit rate with a global and non-bank interest rate magnification methodology. But in the leverage side, we said that if necessary, we would complete or reduce the limited business.

37:28 And in the M&A side, we said that we would look for additional growth based on EPS accretion. When we go back to the root of the problem, we are currently expecting a deficit of about 400 billion to 500 billion won per year. It was a concern of whether to reduce this or go into security. The ROE of the Group is very simple. If the capital does not change and the EPS is attached, if the earnings are attached, the ROE is of course an improved form. As we put it in our chart, if this part of minus 5 billion won returns to a profit of about 1 billion won, we will be able to improve the ROE sufficiently from the point of view of ROE.

38:21 In the end, what's left is the return on income from the ROI or ROE perspective. As you can see in the third quarter, banks and insurance companies are in a position to guarantee a certain amount of profit when they inject capital and allocate resources. Of course, it's hard to expect a big growth, and many more. However, in terms of capital markets, from the perspective of fiscal year, it is a business that needs to jump from the beginning to create profits. There is no choice but to be exposed to the variability of this kind of 손익, so that part is solved by the customer base in the first place, but if we are confident that we can get this kind of profit from IB or this side, we will of course think about that part.

39:23 In the end, we don't have any profits. And over there, we have about 300 billion won of average profit. One of the reasons why we say this is because now we have about 3 to 4 trillion won of profit as you know, we have about 6 trillion won of profit. Even if we do 50% of the stock market, if there is an industry that can help ROE in the medium term, I thought it would be attractive enough to go in there, and I think it would be good to look at it as a play that still moves within the range of 10% to 12% of ROE calculation. If you have any additional questions, I will answer them in detail.

40:13 Thank you for your answer. We will now move on to the next question.

40:19 We will now move on to the next question. We will now move on to the next question. We will now move on to the next question. We will now move on to the next question. We will now move on to the next question. We will now move on to the next question. We will now move on to the next question. We will now move on to the next question. I heard that you sold about 2,900 boxes in the first half of the year. I would like to ask you to update the current situation based on the third quarter. Recently, there are so many new business owners, so I would appreciate it if you could check the margin with us when considering the special edition or the interest rate. The second question is related to our financial situation. Recently, there has been an issue of short-term payout for our competitors, our subsidiaries, and our life insurance companies. We have also sold a lot of short-term payouts in the last 23 to 24 years, so we would like to ask you to confirm how you are doing with the short-term payout before the 100%

41:16 return rate. Yes, you asked two questions. Please wait a moment while I prepare the answer.

41:25 Yes, the first question is from Financial Group Co Lt, and the second question is from Life Co Lt. Yes, this is Financial Co Lt Lee Jae-sung.

41:33 As you said, 9 companies including us have received the grant. Last year, 3 companies including us received the grant, but we started relatively late. We have been focusing on expanding and strengthening the operating pipeline. We have been focusing on expanding and strengthening operating pipelines. At the time of the launch, the market rose rapidly, and I think the need for stock investment was greater than the need for the launch. However, it is also true that our sales were relatively small compared to other competitors.

42:21 In terms of operation, we manage the mobility and maintain the share of adventure capital, and we are planning to reach 100pp of our target margin in the last announcement. In the last week of October 23rd, our operating margin was about 100pp, which is about 5,300 billion won in total. Today, Merit Securities Co Ltd. and other private securities companies continue to issue securities, so we do not plan to compete in terms of interest rates and volume. As planned, we will continue to We are planning to increase our operating pipeline to 2 trillion next year.

43:21 Life CFO Joo Sung-hwan, thank you for the good question. The product you mentioned is said to be 700 types. It is a product that has been sold a lot in the industry, and our company has sold 15% of it from the end of last year to the end of this year. We didn't sell this part too intensively. As you said at the end of this year, this part will be adjusted to the termination rate. This will be reflected in more than 30% according to the regulation guidelines, and we will tell you that it is possible to absorb it within the increased CSM this year. That's all. Yes, I hope you have a sufficient answer.

44:09 There is no one asking for a question. We will wait for the question. Yes, we have a question. Yes, thank you. Yes, please ask a question for WhiteHawk Capital. Yeah, thank you for the opportunity. One question just on the acquisition of Lotte Non Live. Just want to understand how you're thinking about the multiple paid 0.9 price to book for the business given there's more capital injections which needs to be done going forward as well. So can you talk a bit more about the rationale for the price multiple you paid over here and just the timing of the acquisition as well? Do you expect a better underwriting cycle in the Underlying business which makes you more confident about this business and hence you went more aggressive into this acquisition at this point in time?

45:08 Thank you for your question. I'd like to ask you a question about the right to purchase a lottery ticket. You have paid 0.9% of the multiple. Considering that the capital investment should continue to be made, is this the right amount? What is the correctness of the price multiple? Please wait a moment while we prepare for your answers.

46:14 Yes, I think I'll have to tell you step by step. PBR 0.9% is simply the net asset value of the current first half of the year. Of course, valuation was not like that. As you know, we started with QIX, so-called capital, and we have a lot of valuations, such as risk margin, and many other investors, including 1,705,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 We still have Inho-Ga and Lotte Son-Bo, which is a listed company, so we'll tell you more about the business plan when we're done.

47:01 The basic capital ratio applied in the current insurance industry is The analysts here are well aware of this, but I think it's almost similar to the T1 ratio that banks already have, and we don't necessarily have to keep adding capital to the basic capital ratio. There are some limitations compared to the required capital, but if the required capital is large enough, we can inject capital through the security of other capital. We told them that we would only invest about 300 billion won in capital.

47:52 As I said, we have some stakeholders, so we will tell you more about the specific plans after we acquire the company. In terms of capital investment, we are considering 9,000 billion won for a 100% simple purchase and 3,000 billion won for the stock market. Even now, if the stock market value is 9,000 billion won, we are still looking at ROI or ROE for 1.2 trillion won. As for why this was done at the right price, as I said before, the 500 billion won of the EG SOMBO that we currently have can be improved in a considerable way through this acquisition.

48:46 The second reason is that since the PPA is being taken at the right time, we are expecting the PPA to be 300 to 400 billion won in the future. As I said, the group's capital is the allocation problem. If we were still there, it would have been a loss of about minus 5 billion won. If this is an improvement of 5 billion won even if it is zero, as I said, I don't really see the profitability of Lotte Sonbo this much, but if we do it with the other factors I mentioned earlier, from the point of view of ROI, We will be able to meet the needs of the investors.

49:41 If I go back and talk about it, you keep talking about the uncertainty of the growth, but as I said earlier, to give you a hint, not only the injection of the stock market, but also the various injections that use the financial power of other capital and groups, We believe that there will be plays that the existing shareholders cannot do in the financial group. The last question is whether it is possible to improve the revenue of the future loss insurance. It's difficult now, right? Because of the regulations, the number of insurance companies is decreasing. And as Life CF said, the number of insurance companies is likely to decrease. However, the specialty of Korean insurance companies is that if the new contract CSM margin rate is normalized, if we make the products live well, I think we can sell long-term health insurance that is a little better than the structure of such products sold in life insurance. And as I said, we will talk about various synergies later, but as I said, we are carefully judging and pushing for a little bit of profit compared to the investment of capital.

51:20 Thank you for your answer. There is no one asking for a question. I will wait for a moment. If you have a question, please raise your hand on Zoom. Please raise your hand if you have a question.

51:43 Hello, my name is Jung Joon-seop, and thank you for the opportunity to ask me a question. I would like to ask you a question related to the loan. It was the same in the past, and we are still managing our assets well, so there seems to be no big problem so far with the loan. Thank you for your question. Please wait a moment while we prepare for the answer to the question.

52:33 Let's start with Group CRO. Thank you for the good question.

52:36 Despite the economic growth and the recovery of the economy, the ratio of self-sufficiency between the Group and the major companies is improving. There is a possibility that there will be a loss in companies in the future. In our case, we will continue to grow in the financial sector and develop a medium-level segmentation strategy. Thank you for your questions. We don't have any additional questions.

53:23 We are running out of time. If you have any questions, please contact us via IR. We will answer them in detail.

53:50 I think we can hear your answers. That's it for the 3-minute business performance announcement of the 26th year. You can check the announcement on the homepage and Shinhan Financial Group IR YouTube channel. If you have any additional questions about M&A, please contact us anytime. Next February, Thank you.