Shinhan Financial Group Co Ltd

Thank you for attending the annual Business Performance Announcement. Today's performance announcement was attended by the Chief Executive Officer of the Group CFO, the Chief Executive Officer of the Group CSO, the Chief Executive Officer of the Group CRO, and the Chief Executive Officer of the Group Future Strategy Research Institute. Bank CFO, Lee Jung-bin Group, Card CFO, Park Hae-chang Group, Investment Securities CFO, Jang Jung-hoon Group, and Life CFO, Ju Sung-hwan Group. Today's performance announcement will be a Q&A session for those who attended after the presentation on annual business performance in 2024. Then, there will be a presentation on the business performance of Cheonsangnyeon branch.

Hello. I would like to thank all of you who participated in the annual performance announcement of the Shinhwan Financial Group in 2024. I will explain in order from the 5-page business performance highlights. Despite the decline in non-profit interest in 2024, the company has achieved a short-term profit of 5,175 billion won, which increased by 3.4% compared to the previous year due to the increase in the interest rate and the reduction in the loss. The interest rate has increased by 5.4% compared to the previous year due to the strategic growth of the bank's loan asset and efficient margin management in the environment in which the market interest is decreasing. Despite the increase in the interest rate of the fee, the interest rate of the interest rate of the interest rate of the interest rate of the interest rate of the and the loss of insurance and interest due to the change in household expenses and the impact of the previous year's negative effects, which decreased by 5.0% compared to the previous year. Income was increased by 3.7% compared to the previous year due to the impact of the increase in the size of retirement, but the related CIR of the group recorded 41.7%, which is similar to the previous year, with the increase in the business interest rate before the financial crisis with well-managed income. The year-on-year loss rate has recorded 47BP, which has decreased by 10BP compared to the year-on-year loss, while still securing the ability to absorb losses related to real estate. Despite various changes in the end-of-the-year exchange rate, the 2024 CET-1 ratio remains at 13.03% and continues to maintain more than 13% of the group's goal. On Friday, the Board of Directors agreed to receive a total of 5.5 billion won in self-employment benefits, along with 5.4 billion won in paid benefits. Therefore, in order to implement a policy of self-employment without a gap year-on-year, the total of 4.5 billion won of self-employment benefits announced last October, including 1.5 billion won of self-employment benefits completed in January of 2025, and the total of 6.5 billion won of self-employment benefits extended until February of 2025. In the future, we will continue to work hard to implement a strong financial stability based on flexible response to capital-related regulation changes as well as effective capital ratio management and active decision-making. We will work hard to carry out the promised value-added growth education. Please note that the main profit indicators of the group are displayed on the next 6 pages. From the next 7 pages, I will explain the detailed performance of the group. Despite the overall deterioration of profitability due to the decline in market interest rates, Group's interest rates continued to grow by 5.4% compared to the previous year, with the interest rates of the bank focusing on the bank loan. The bank's interest rate loan grew by 10.3% per year, undermining interest rate growth rates. However, in the fourth quarter, the company's loan increased by 0.9% due to the regulated environment and seasonal factors, and in the case of corporate loans, it continued to grow by 0.9% centered on large-scale companies. In 2025, we plan to align with group corporate values and quality growth centered on actual demand to primarily manage capital efficiency and asset competitiveness. Considering the year-long planned RWA limit of the group, we will manage the portfolio from the point of view of group ROC stock, and in particular, we will be able to prevent profitability as much as possible with the efficient growth of the interest rate drop period through the growth method of Jodal Center. In the quarter, NIMB recorded a 1.52% level of market interest rate drop, despite the influence of the market interest rate drop in the quarter. The bank's bond yield fell 14BP in response to a drop in market interest, but the interest rate has improved by 10BP compared to the previous quarter through regular interest repayment repricing and stock portfolio efficiency. We will continue to actively respond to the drop in NIM through flexible monetary policy and strategic ALM operation based on short-term environment. Next is page 8. Group B's profit was reduced by 5.0% compared to the previous year, responding to the growth of the capital market variability and reducing by 5.0% compared to the previous year. The profit of the new credit card was reduced due to the increase in marketing costs, but it was increased by 2.6% compared to the previous year due to the sales of financial products based on WM business power. However, the profit from the birth of the child's right has decreased by 7.3% compared to the previous year due to the damage of the child's right, which has been recognized as a guarantee for the future loss of the capital market variability and the one-time loss factor of the Shinhwan investment right, which was in the third quarter. While Han Gwan-byul is well managed at an increase of 3.7% compared to the previous year, Group CIR recorded 41.7%, which is similar to the previous year, with an increase of 2.9% in business profits before the financial crisis. Despite the active recognition of losses related to real estate and finance, we recorded 47BP, which was improved by 10BP compared to the previous year, through the existing preemptive additional deposit settlement effect and financial stability improvement efforts. Next is the 9th page. The group's financial stability index is relatively stable through active sales, and we continue to monitor it closely. The interest rate of the bank has been improving since the 1st quarter, but the card interest rate has risen to a similar level at the end of last year, while maintaining the annual drop rate. The card interest rate before the 2-month interest rate, which can be seen as the leading indicator of the group's interest rate, has recently risen again in the form of continuous improvement after the 1st quarter. In the quarter of 2024, the standard interest rate has been reduced twice, but the high interest rate is still sustained and the sense of security has been restored. In the future, we will continue to maintain conservative management of asset reliability with a sense of security. Please refer to the data on the short-term profit and real estate P&F of each group. Next page. In the end of 2014, the average capital ratio fell by 13.03%, which is 14BP compared to the previous quarter. This is due to the increase in foreign assets due to the increase in exchange rates, which leads to an increase of 5.8 trillion won in group household assets. In 2025, we will continue to maintain the CTO ratio of more than 13% based on stable financial performance while managing RWA at the appropriate level. I will explain in more detail about the stock market in the future. The next page is the global business situation. In 2014, the group's global profit increased by 7,589 billion won, which increased by 38.1% compared to the previous year. This increased the group's global profit by 16.8%, which is the highest in the past. In addition to the exchange rate effect, this is the result of the long-term accumulation of local and business and internal management efforts, focusing on Vietnam and Japan, as well as sustainable results. In the future, the Group will continue to make steady results in the global business, which is a new growth power through choice, concentration, and efficient growth. From page 12 to page 13, the content of the digital and sustainable management activities of the party is included, so please refer to it. From the next 14 pages, I will talk about the outlook for 2025. First, I would like to talk about the management environment of the future strategy research institute.

Yes, hello. I would like to talk about the economic and business environment of 2025. First of all, it is the GDP growth rate. At the beginning, we expected to be able to grow by about 1.8% in 2025, but the education conditions are deteriorating along with the launch of the Trump administration. As you know, the political uncertainty in Korea is quickly cooling down the domestic market. These two factors seem to play a role in the growth rate and lower control factors, so we expect a 1% medium growth rate. In view of this growth rate, the environment of loan or asset growth is judged to be somewhat negative. Above all, it is decided that the period in which we should be more careful in terms of asset positivity will continue. The second is the interest rate. At the beginning of the year, when the standard interest rate was 2025, due to the exchange rate and the issues of the stock market, I expected a gradual decline of about two times. However, considering the negative factors of the domestic market, I think there is a possibility of an additional decline of about one time. However, I think that we need to consider these aspects in order to observe the future of the call policy, as these parts such as time, intensity, and number of calls can cause some variability in the call policy. From this point of view, it seems impossible to reduce the margin of the ranking, but I think it will work more positively in the non-banking part and the operating part. Above all, the exchange rate, which was the most unstable in the financial market in 2024, is expected to show a more stable trend in 2025. The expansion of the interest rate, uncertainty in the presidential election, and some political uncertainty at the end of the year due to the change in the exchange rate in the U.S. In 2025, these variables will not act as additional source tax factors because there is a preemptive part. However, I think it will be difficult to expect a source tax basis that will quickly stabilize below 1,400 won per dollar. Because the results of Trump's policies and U.S. priorities are likely to be reflected in the dollar strength, we expect that the dollar exchange rate will be listed at the center of 1,400 won for the time being. However, I would like to say that the positive parts, such as what I mentioned earlier, have been finished. Lastly, real estate. Real estate 경기는 아무래도 지역별로 좀 차별화되면서 움직이는 그런 흐름들을 볼 것으로 보여집니다. 경기가 부진하고 그리고 대출 여건들이 크게 늘어나지 않은 상황이기 때문에 가격 급등의 가능성은 낮고 대신 공급이 제한되어 있고 그리고 인플레 환경에 대한 그런 부분들을 감안했을 경우에 부동산 가격의 급락 가능성도 낮다는 점을 말씀드리고자 합니다. Most of all, the PF failure that troubled the financial institutions the most. In 2022, the construction economy collapsed, and in 2023 and 2024, the environment in which the failure intensified seemed to have passed through the tunnel in 2025. In the last year, the framework of PF failure and rescue adjustment provided by the government seems to be in the stage of progressive rescue adjustment rather than additional failure in 2025, so I expect that the burden of these parts will be eased compared to 2024. I will end the presentation on the economic and business environment of 2025.

Thank you for your question. Next, I would like to explain the direction of the company's profits and capital management on the 16th page. In 2025, we will focus on the growth of capital profitability from the perspective of capital profitability as a principle that actually implements the value of the company. In order to do this, we would like to make fundamental changes through system change, such as strengthening the evaluation and penalty of self-employed companies related to RWA budget. As you can see from the graph on the right, the growth path of RWA this year will be different from the previous one. There are various variables, but assuming that the standard interest rate will be reduced by about 3 times, we will strategically respond to the recent decline in the bank's NIM and the decline in interest rates. In addition to securing the ability to absorb losses last year, non-interest rates are expected to improve significantly this year. With the increase in interest rates in the child and adult securities sector, the increase in retail interest rates centered on WM, which has been newly reorganized, and the increase in retail interest rates in the IB sector will be realized in earnest. In addition, we will continue to maintain the group business profit margin at the early 40% level by continuously strengthening the cost efficiency activities of the entire group through efficient budget management. Finally, we aim to maintain conservative risk management standards, and aim to manage 30BP medium-sized companies with lower group line costs than the previous year. Based on strong fundamental improvements, such as growth policies in consideration of capital profitability and RWA, interest rates improvement in the WM and IB areas, we will maintain a stable group CET1 ratio of more than 13% as of now. Next, I will tell you about the policy of the 17-page group. First of all, in 2024, the dividend rate of 1.1 trillion won in total and 39.6% through 7 billion won of self-reward will be recorded. In 2025, the dividend rate of 6.5 billion won, which has already been announced, will be added to the self-reward of 6.5 billion won per quarter, and a total of 1.7 trillion won will be used in the dividend. We expect to achieve a better share price rate than last year by continuing to implement a resilient self-sufficiency policy considering the capital ratio in the second half of the year. The next 19 pages are the results of the second half evaluation of the company value stock price at the end of 2024. The recovery of the most important profitability index has not yet been visualized, As I said earlier, as 2025 is the actual year of the Group's value-added plan, we will focus on all the influences of the Group and actively improve the key indicators. The Shinhan Financial Group has actively led the value-added plan of the Group's value-added plan at the end of July last year, and has actively led the value-added plan of the Group's value-added plan at the end of July last year. In the future, we will make consistent and exemplary results in the implementation to actively remove the values of all stakeholders and the development of the Korean capital market. For your information, the company's corporate value recovery plan will be added to the implementation plan and evaluation compensation system improvement plan after the first quarter of this year. From page 20, detailed financial statements and main business indicators of the groups and major groups will be laid out, so please refer to them. This concludes the overall explanation and we will move on to the Q&A session.

Thank you for listening. Yes, then we will proceed with the Q&A session with you from now on. If you have any questions, please raise your hand while you are connected to Zoom. Yes, then we will take questions from now on. Yes, then the first question is from Seoryongjin, a member of the S.K. administration. Seoryongjin, please ask a question.

Hello, I would like to ask about the non-banking side among the achievements. Looking at the achievements of the 4th quarter, the non-banking side had a big decline. In particular, it seems that there was a big decline in the stock market, capital, asset acquisition, etc.

Please explain in detail the causes of the decline. Yes, Mr. Chairman, please wait a moment while we prepare an answer to the question.

I'm Sang-Hyung Chen from Group CFO. You mentioned the reason for the failure of non-banking companies. Looking back at last year, I think it's a bit disappointing that the non-banking companies' performance was not as good as expected. Uh, uh, uh, We reflected the overall burden of the penalty from the most conservative point of view, and as a result of that reflection, the decision was made by the self-employed company. The interest rate is now about 300 billion won minus, and we wrote it in the document, but in fact, among the contents, the lawsuit-related penalty, the part that comes back from the connection standard, If we consider the new effect of the connection, we can say that the minus size of asset acquisition per year is about 18.4 billion won. In the case of capital, there is also a part of the shutdown of real estate that has been reflected, and then there is the part where the payment cost has risen because of the high interest rate, and one of the biggest reasons why capital's performance has been poor this time is that about 40% of capital's entire assets have investment assets. Among those assets, the operating profit rate of the assets is in line with the overall market situation, In contrast to the previous year, it seems that the operating profit rate has fallen a little. I think this is a part that can be re-rebounded with the recovery of the market, unlike real estate, PF, or cash. And as you all know, last year, we had a loss of one-time loss related to ETF LP. Among the investments in the past, the loss of such a part such as alternative investment Thank you for your answer.

Let's move on to the next question. Next question is from Seung Kwon Kang from KB. Kang, please go ahead.

Thank you for the question. I have two questions. First of all, in the past, the average RWA increase rate was about 7%, but this year, it is said that it will be managed below 5%. Then, some parts will be reduced, but please explain to us which of the reduced factors you are planning at the company. Secondly, I think we need to look at the capital ratio of RORWA in more detail. As a result, the RWA of the bank and the group has been announced, but the size of the RWA of major subsidiaries such as cards, insurance, securities, and capital has not been announced yet. Could you please share the size of the RWA of major subsidiaries by the end of 2024?

Yes, Mr. Kang, please wait a moment while we prepare some questions and answers.

Yes, this is Cheon Sang-hyeong of Group CFO. Regarding asset growth, you asked questions in detail about the next year. The second question is about the self-employed company, ROA. First of all, I would like to talk about RWA. If there is a lack of data, you can check it later through our office. Last quarter, the balance of RWA was about 2.12 trillion won. The next big subsidiary, Card, is 44.8 trillion won. Then, the 증권 is 34.9 trillion won, and the capital is 18.3 trillion won. In addition, I will answer the details of RWA in the future. You talked about asset growth. In my opinion, rather than hiding assets, I think it's a matter of changing existing growth patterns. As I mentioned in the previous presentation, I told you that I would go in a different direction from the existing growth path, and I told you that I would focus on the impact of quality growth on the group. Probably, corporate loans, shop loans, and various market conditions, as well as shop loans, and considering the macro environment, it seems to be an environment where it is not easy to grow as much as it did in the past. Then, the company loan part, if the market for direct finance is activated a little more as the market for interest rates changes, it seems that the interest rate of the bank will also decrease a little, so it seems that there is plenty of room for reduction in the market demand. As I mentioned earlier, we have to make clear evaluation standards such as RWA penalty and ROC, If the resource distribution is organized based on ROC standards, we believe that the management of RWA for CTOs can be controlled.

Thank you for your answer. Let's move on to the next question. The next question is from Won Jae-woong of HSBC. Won Jae-woong, please ask a question.

Thank you for the question. Thank you very much for making the main event more aggressive than I thought, and for making an appointment with the mayor. I think it's important to increase the share price as the ranking goes up. But when you explained earlier, you said that the shipping cost would drop to 0.3% in the middle, but it's 0.47% now. Then, it is expected that the profit will be improved by about 400 billion won as long as the CPF goes up. Since you explained that there is no need to build a big real estate in the next year, is it okay for us to see an increase in the ranking? I think it will be helpful for us to estimate revenue next year. So, I would appreciate it if you could give us such opinions.

Yes, Mr. Chairman, please wait while we prepare the answer.

Yes, I will answer that question. First, you mentioned the one-on-one ratio. Mr. Won said it was aggressive, but we don't think it is aggressive. Because last year, we announced the company's value-added plan, and as I explained to everyone, our company's value-added plan is very intuitive and has high visibility. There is a plan that we told you about. Looking at that, we also proposed a one-on-one ratio goal, I told you about the three-year plan for self-sufficiency. Therefore, we think that the path we are on is following the path of the stock market plan, such as the company that was previously announced. Then, as you know from the market, we think that the amount of self-sufficiency that we think this year will be about 1 trillion won. I think you can say that we are doing well according to the plan. Next, I would like to talk about the capital cost and the growth of the NIM loan. I will talk about the profit and loss of this year. In the end, the market is less profitable than we thought in the fourth quarter, and there may be some doubts about the potential for future profits. But as I said in the announcement, we have been consistently saying since the first quarter last year that we will fully reflect the various potential losses and burdens we had in the past and take them out. I think it's real estate, real estate pf, or something like this. So, even until the fourth quarter of last year, we've been able to reflect on that part of the external evaluation, and we've been able to reflect on that part of the external evaluation, and we've been able to reflect on that part of the external evaluation, and we've been able to reflect on that part of the external evaluation, In the end, if you think about the potential of SONIC in the future, you can understand it as the part where the 47BP drop to 35BP, as you mentioned earlier. Last year, when SONIC went bankrupt, One of the major causes is the loss of assets, securities, and capital. Most of those losses are caused by the short-term income. In that case, I think there is enough mechanism to prevent the loss of assets and capital from becoming normal again, even if there are no more losses like last year. . . . . . I think that this year's profit can expect a lot of growth compared to the previous year. In that respect, I think that the management of CET1, which is an increase in capital, of New Money, which we can think of, is sufficient. In addition to that, if we manage RWA through conservative growth, unlike before, we promised that we would continue to maintain 13% from 2023, and we have actually implemented it. I think it will be a little harder next year. For reference, the CTO ratio is 13%, but considering various exchange rates and variables like last year, we will continue to manage it well by targeting 13.1% per quarter.

Thank you for your answer. Let's move on to the next question. The next question is from Doa Kim from Hanwha Investment.

Please go ahead, Ms. Kim. Thank you for the opportunity to ask this question. I think I'll ask this mainly because it's related to the bank. First of all, I was looking at the information on the PDF and the factbook on our website. In terms of the information, it was written as a one-time factor Yes, it is. The FBPL-related 손익 has decreased by about 1,200 from QOQ, and the foreign-born 손익 has also decreased by about 1,600, and I think most of these are a combination of the decreases that you have explained. But normally, I've seen a lot of big swings in the non-bank and securities sectors, but I've never seen it in the banking sector, so I'm wondering if there was a problem with the assets you have. This is a question about the bank. I don't know if this can be linked, but according to the RWA, foreign exchange-related asset growth effects have affected the structure of the RWA. I think all the RWEs that have increased are banks. I know that banks are not very sensitive to the exchange rate of their assets, so I would like to ask if it is possible to assume that the level of sensitivity in the future is higher in the banks in this quarter, or if there is a separate factor. I think it would be helpful if you could explain it.

Thank you. Yes, Mr. Chairman, please wait a moment while we prepare for questions and answers.

You asked a question about the one-way loss factor of the bank's custody rights. First of all, the CFO of the bank will answer this question. As for the RWA of the bank, I will supplement it with the CRO and then I will answer it.

Yes, thank you for the good question. I'm Lee Jung-bin, CFO of the bank. First of all, you pointed out the loss in the 6th quarter of the quarter compared to the 3rd quarter and the 4th quarter of the quarter. Overall, compared to the 3rd quarter of the quarter, the interest of the 4th quarter of the quarter That's right. In terms of the exchange rate, the exchange rate evaluation that we conducted previously showed that the increase in the exchange rate due to the increase in the amount of CVA is more than 100 billion won. In addition, some of the contracts of the KIKO-related companies that we traded in the past have been affected by the increase in the exchange rate. So, overall, the interest rate has increased by about 10 billion won in the third quarter compared to the fourth quarter due to the increase in the exchange rate. You talked about the damage to the state-owned property rights, but basically, there is a part of the original version of Shintak that has profits or losses due to the loss of state-owned property rights. It's not just the state-owned property rights of the investment assets that we have, In the 3rd quarter and 4th quarter, the amount of additional compensation was about 80 billion won to 90 billion won. In comparison to the previous quarter, the amount of compensation in the previous quarter was a little less than the previous quarter. In the big picture, there was a factor rather than an increase in the loss of a normal state-owned property. Also, the decline in the stock market in the previous quarter was due to the decline in the stock market in the previous quarter in the FBPL. However, in terms of the cumulative year-on-year, the overall profit size in the stock market and the share price has increased in the previous year. In terms of the year-on-year, there is a decrease in the rate of return due to the rate of return. As you said, the change in the interest rate of the bank is not as big as it is elsewhere, but in the quarter, the change in the interest rate has been quite significant due to the influence of the exchange rate. In addition, you mentioned RWA. Basically, we have a lot of foreign assets compared to other banks, but as the global business expands as a whole, the amount of foreign assets is increasing. It shows that the RWA has increased relatively as the quarter exchange rate increases. However, even if the RWA increases as the exchange rate increases, it has a positive effect on overseas business exchange profits and capital investment, so I can tell you that it actually has some positive effects.

I would like to add to what CF said. I mentioned about the loss related to the birth rate. As CF mentioned, our group basically has a hedge position on foreign asset assets, so it is not a structure that greatly changes the evaluation and profit due to exchange rate fluctuations. However, as you just said, I would like to say that there is a part that has been reflected as a one-off in the fourth quarter. Then, the RWA related to foreign exchange, as we mentioned earlier, I told you how much the influence of exchange rate is, and I told you about 6BP per 100 won when we announced the results. However, as we realized this after passing the final decision last December, in the case of last year, there were various calls with exchange rates, If all calls are weak compared to all calls, the efficiency of the exchange rate change seems to be much greater. So, the exchange rate effect that we are internally recognizing is about 10pp per 100 won. If you look at the flow of CT1 and RW in the fourth quarter of last year, I think you can see that most of the RWA 5.8 trillion won has been affected by the exchange rate. And then the rest of the changes in other assets were almost the same as in the third quarter. Instead, the CTO ratio dropped a little compared to 13.1%. As I said before, the loss of the fourth quarter was a little less because of various losses. I think you can understand that this part has a comprehensive impact.

Yes, thank you for your answer. We are currently waiting for questions. If you have any questions, please press the zoom button. Yes, Mr. Kim Do-hwa, please ask a question.

I don't think you have any more questions, so I'd like to ask one more question. You mentioned that Jangpyong's self-servicing is actually resilient, but if I ask you in a micro way, I think you've done quite a lot of self-servicing in the short term with 5,000 self-servicing in the short term. Even in the second half of the year, you don't have to understand that you don't necessarily have to drop the self-servicing scale. Yes, thank you for the question. Please wait a moment while preparing for the answer to the question.

Yes, Mr. Yong.

Thank you for the question. You gave me a self-employment question. Now, the self-employment that was announced in the first half of the year is 1.5 billion won in January, and then up to 5,000 won that was announced this time, the first half will probably be 6.5 billion won. Next, I will talk about the size of self-employment that I target annually. So, Uh, I'm going to announce the size of the self-employed week in the second half of the year, but in the first half of the year, it will probably be announced in the second half of the year, and then in January and February. I think I'll give you a presentation, and maybe the scale is now what we said earlier. If the management of RWA goes according to the plan, I think it will be able to follow the current trend. In our opinion, we have a target of 1 trillion won every year for self-sufficiency, but we think that we can go a little different depending on the market situation, the stock price, and various situations. I think that part will be discussed and decided by our board at that time. That's all.

Thank you for your answer. Next question is from Taj Kiran from White Oak Capital.

Thank you very much for the opportunity. I have two questions if I may. One is regarding the life subsidiary. Could you help us understand what is the risk of rates affecting the income over there? Do we have a guaranteed yield annuities book which might get affected if rates go down through spreads compressing or negative spreads? That's question number one. What is the outlook for the life subsidiary as rates go down? And the second question is if you could help us understand whether, you know, property trading happens at all within the group, and if it does, and in what subsidiaries should we expect that in the bank or the securities business, and what would be the sources of funding for this book? Those are my two questions. Thank you very much.

Thank you for the question. Please wait a moment while we prepare the answer.

Yes, I would like to ask about Shinhan Life Insurance Company. Is there any risk that the interest rate will drop as the interest rate drops in the country? Is there any risk that the interest rate will drop as the interest rate will drop in the country? Next, I'm curious about the real estate transactions, whether all the groups are doing these transactions, or if they are mainly based on banks, securities, and private companies. When there is a related transaction, where and what kind of money do you use?

Yes, you asked two questions. I'm sorry I took some time to understand the content of the question. First, you asked a question about LIFE. About the LIFE part, our LIFE CF will answer it. Second, you asked a question about the overall profit of golf in the trading part. The second one is a little bit of what I know. I'll tell you a little bit, and then I'll add the necessary parts later. I'll give you an answer separately. First, LIFE CF will answer the question.

Thank you for the question. As you asked, we don't have a lot of fixed interest rates. So, it is expected that there will be little impact on interest rates due to the decline in interest rates. If the interest rates fall temporarily, we are investing in bonds, so the investment interest is almost solid, but the interest of the bond is reduced. So, in general, If the interest rate drops temporarily, the interest rate will tend to rise slightly. As for the rest, as you said, LIFE is a temporary system reform this year, so the interest rate has dropped a little, but that part will disappear next year, so we expect the interest rate to go up by 24 years in 2025.

Yes, I'll tell you a little bit about the trading part. Uh, if we look at the group as a whole, uh, the group has 37.3 trillion won of FBPL bonds. Uh, among them, in the case of FBPL, Shinhan Bank and Securities have about half and half. Then, the FBOCI bond has a total of 78.1 trillion won. Among them, Shinhan Bank has 41 trillion won and Shinhan Life has 34 trillion won. So, if I look at the rate sensitivity now, when the rate is 10BP, the FBPL, Sonic, moves about 1.98 billion won. Then, from the OCI side, the amount of money moving to the bond evaluation is about 51.16 billion won. FYI, FBPL duration is 0.53 years and OCI is 6.55 years. If you have any additional questions, we will answer them later. Thank you. Thank you for your answer.

We don't have any additional questions. We will wait for a moment.

I think we're done with the questions.

We're running out of time. One moment, please. We have a question from Lim Mi-sun from CITIZEN. Lim Mi-sun, we'd like to ask you a question.

Can you hear me? Yes, please ask your question. Thank you for your question. There's something I'd like to ask you briefly. Right now, the CAC1 ratio is 13.03%, but in terms of sales, it seems that it's still not enough. So, when I think of it as a bare case, I think it's going to be even worse in terms of sales, and I think it's going to be even worse in terms of sales, How do you plan to respond to these RWA values and effects? Also, you are looking at the rate of growth internally, and you are looking at the level of buffer that can control RWA. These are some of the questions that came to our 13 Pro.

Thank you. While we are preparing to answer the questions, please wait a moment.

I didn't hear the question exactly, but I think you asked a question about the RWA management because the CTO ratio is tight. In the case of our CT1, we are now speculating for each quarter of next year. If I plan for profits or RWA management, I think I can reach about 13.1% of my target for each quarter of next year. In addition to the RWA, we are also preparing a few things to take as a bonus from the capital. In particular, in the case of the first quarter, because of Basel III, it has the effect of temporarily increasing the share of the stock market, so considering those parts, Yes.

Yes, it is. In addition to what CF said, for the management of RWA, from the point of view of optimizing capital ratio, uh uh As a way to hide R2W2, as CF mentioned earlier, sell-down, and asset transfer. Another thing we are considering is risk participation, and there is a pre-credit transaction. We are seriously considering this part, and we are preparing various tools to reduce the risk before RWA. In this way, as I said before, we can reduce the amount of RWA in addition to what we experienced last year.

Yes, I think that was a sufficient answer. Now that a lot of time has passed, there are no more questions coming in. If there are no additional questions, we would like to end the annual performance announcement of the 24th year. Yes, then I will end the annual business performance announcement of Shinhan Financial Group in 2024. In the future, not only the performance announcement, but also through various routes, we will do our best to help investors, shareholders, and various stakeholders understand Shinhan Financial Group. The content of the performance announcement today can be found on the homepage and on the Shinhan Financial Group IR YouTube channel. Thank you for your interest.