Good afternoon. My name is Kyu Sul Choi, the Head of IR at KB Financial Group. Thank you for taking part in today's Earnings Conference of KB Financial Group for the First Half of 2013. The access to this conference is being provided via Internet and conference call, being webcast real time for Korea and abroad. During the Q&A, you may call in to ask questions. Joining us in today's earnings conference, we have with us KBFG's CFO, Jong-Kyoo Yoon, and executives from KBFG subsidiaries. The conference will consist of the earnings presentation by our CFO, Jong-Kyoo Yoon, on the earnings results for the first half of 2013, followed by a Q&A session, at which time you may call in for questions. Let me now present our CFO, Jong-Kyoo Yoon, for the earnings presentation for the first half of fiscal year 2013.

Good afternoon. My name is Jong-Kyoo Yoon, the newly appointed CFO of KB Financial Group. Let me begin the earnings presentation of KBFG for the first half of fiscal year 2013. Let me begin with the financial highlights. KBFG's profit for the first half 2013 recorded KRW 575 billion. Profit for the first half declined 50% year-on-year, mainly due to the narrowing interest income from the NIM contraction and sluggish loan growth, as well as the one-off losses, including impairment loss on securities. Profits for Q2 marked KRW 163.5 billion, down around 60% quarter-on-quarter, affected by the factors such as equity method loss on BCC. The group's gross operating income for the first half came in at KRW 3,662,900,000,000. As you can see on the graph, the quarterly gross operating income is hovering slightly below KRW 2 trillion lately. It is attributable to the margin compression and slow loan growth, leading to the lower interest income, as well as the noninterest one-off losses resulting in the slight weakening of the top line. However, the Q2 numbers were supported by the resilient loan growth and efforts to enhance fee income coming in on par with the previous quarter. Including Trusts and AUM, the group's total asset marked around KRW 376 trillion as of the end of June. Next page, please. The group's provision for credit losses for the first half 2013 posted KRW 677.5 billion, down 10% year-on-year. Thanks to our proactive and continuous stance to address NPL and to enhance asset quality by way of conservative provisioning policy, our quarterly provisioning trend remains quite stable. The group ROA and ROE posted 0.4% and 4.64%, respectively. On the bottom of the page, please find the capital adequacy trend. Although this is just an estimate for now, the Group BIS ratio as…

Thank you. That was an earnings presentation by our CFO. We will now begin the Q&A session. [Operator Instructions]

From Hanwha Investment Securities, Mr. Shin. Please go ahead, sir.

My name is Shin. First of all, I believe that you emphasized about the importance of growing your retail credit growth. So what is the change in your direction for the growth going forward? And also, how do you foresee the margin outlook towards the end of the year? And also, at what level do you think that your margin will be stabilizing?

Yes, let me address your questions. When it comes to the retail loan area, our main sector will be our mortgage area. And in the mortgage sector, we will continue to have our dominance. And also, in the general line and also when it comes to the unsecured loan sector, we would be targeting a high-quality, potential buyers who are mostly professionals with higher income so that we can further reinforce our marketing efforts. And secondly, regarding our margin outlook towards the end of the year, as you are well aware, the Q2 NIM was 2.65%, which was an 8% -- 8 basis point lower quarter-on-quarter, so it was slightly below our annual guidance. However, it was mainly due to the end of June situation, where the month end happened to fall on the weekend. Therefore, it led to less recovery of the delinquent interest. So this was a one-off factor. So if we actually take it out in the Q3 trend, I believe that the Q3 NIM will be recovered back to the normalized level of Q2. So going forward, we will further reinforce the recovery of the delinquent loans, and we will further acquire low-cost funding deposits, as well as the settlement accounts in deposit. I think that, that will all boost our margin going forward.

If I may elaborate just a little bit, until the end of the year, I believe that as for the loan growth, on a year-on-year basis, well we are anticipating and we have the estimate about 2% growth year-on-year. And for your information, there is a 30-second time lag between the phone call and the screen shown on the web page. So first of all, thank you for your first question. We currently have no question in line. So please go ahead with your questions.

Yes, I think we have a question from JPMorgan, Seo, please go ahead. Scott YH Seo - JP Morgan Chase & Co, Research Division: I have 2 questions. One is in terms of the NPL, there is a slight pick up. You mentioned that it's a change of classification from a special mention to substandard. Can you comment on overall, is there any other concern on asset quality? And secondly, in terms of the securities income, there were also some swings in the second quarter. Can you elaborate more on what contributed to those changes in the trading and also AFS income?

Yes, let me address your question. Regarding the rising NPL, I would like to elaborate slightly on this point. They mainly had to do with the ship building companies. The provisioning ratio for those particular companies happen to be above 20%, but their asset classification sometimes fell under normal or precautionary. But according to the FSS's guideline, the asset quality classification should be better aligned with the provisioning ratios. Therefore, regarding the payment guarantees related with RG, which is refund guarantee insurance covers, so we further upgraded the provisioning requirement and also, we wanted to realign it to the right classification. That is why we've reclassified it as NPL. So that actually amounted to about KRW 616 billion. Let me address your second question. With regards to the impairment loss on the securities income, now most of the impairment loss arose from POSCO or HMM. And regarding available for sale, it amounted to about KRW 44.6 billion. And I think that the more detailed answers can be provided through the IR Department.

I hope that answered your question. We will wait for others to request for questions. It's Kiwoom Securities, Mr. Young-Soo Seo.

Yes, I'm Young-Soo Seo from Kiwoom Securities. I have one question I would like to ask. As you know, government has taken initiatives to come up with cost reduction methods, and we even heard that from the news articles that there is a task force team that was installed. And also, I think one of the message is to do away with branches that's recording loss. And also, second has to do with increasing the fee structure, especially on new origination and also on private mortgage product. Now these methods -- I mean, how realistic are these efforts? And how could they -- how -- to what extent do they contribute to your profitability?

Yes, for reducing the number of branches that's generating loss, you first would have to be able to define what those branches are, who those branches are. In the course of the ordinary business, business as usual, I think that, that would be one of the requirements. If there is change in the business or commercial district or if there is a large amount of loss that's being created making the branch record in the red or maybe with new branches and there could be a branch that takes a long time to reach a BEP point, breakeven point. We believe that the operational environment that becomes more difficult, thereby the branch also experiencing difficulties, we're trying to relocate them and put in more effort and rapidly respond to those situations, for branches that's facing difficult operational environment. Number two, with regards to fee increase. Now this requires social consensus, and there also would have to be various analyses on the cost structure for the bank as well. So for this methodology, it does beg for a very specific and detailed consideration. And at this point, we do -- we are not at a point where we could share with you any specifics.

Next question from Prudential Securities, Yoshinari Watamura [ph]. Please go ahead, sir.

Yes, I have one question. I have read an article, and there has been an article about the M&A strategy about your company. There are some reports that you might be interested in the Woori Investment Securities-related acquisition or that you might be interested in any overseas acquisition. Now if that is actually true, could you actually touch upon your plans for funding for such M&A?

Thank you for your question. As for the participation in the process of Woori Financial Group privatization, I believe that everything will be decided under the overall group-wide strategy for the growth. First of all, our strategy is to further diversify our portfolio. And also, our group has been always focused on making sure that our nonbanking subsidiaries are reinforced. So that's the criteria in making the determination. And we have to make sure that we could further create synergy upon finishing the completion of the M&A. And more than anything, we want to make sure that all our M&A decisions could contribute to the shareholder return. So at this particular juncture, we have not come to any particular decisions yet. So unfortunately, I cannot give you any more color on this. Regarding the overseas expansion, likewise, I believe that our overseas strategy is under review at the moment. And when it comes to the more specific ways of overseas expansion and the strategy, we are still in internal discussions. So once things become more finalized, we will make sure that we communicate it with the rest of the market.

We will take question from Mr. Jin-Sung Kim [ph] from SK Securities.

During the presentation, you talked about the delinquency rate for collective loans are declining, bringing down the provision for household debt and also improving your NPL figure. For this collective loan, I would think that the delinquency rate has turned its direction. And for credit card, come this year, with the merchant fee decrease, we are thinking -- we had been thinking about a lot of pressure for the credit card business, but it's not been that bad yet. So then we should think that the impact is not too negative, the squeeze is not too big. If you look at credit card loans and the interest rate is being monitored by the government and also, the tax benefits has been reduced. It's been reduced from the previous 15%. So this could actually stifle the industry to a certain extent. At KB Financial Group, what are your plans to counter such movement?

If you asked 3 questions, the first one has to do with the collective loans. Now there are different types of collective loans. What I was trying to talk about was the collective -- the installment loan. Due to many difficulties, for instance, the bad construction market, real estate market, the delinquency rate had increased significantly at recent. But we've been very active in collection activities on the collective loans and for prime construction companies. And also, we are -- have been able to identify some positive opportunities. So we do not expect any further delinquency formation. Second has to do with credit card. With the change in the merchant fees, yes, that will drive down the profit to a certain extent. But if you look at our funding rate, we were able to maintain that rate at a quite low level. And also, for the credit card product, we had employed many methods to gain competitiveness in terms of the cost structure. Third has to do with the credit card loans. As you know, the interest rate, we expect, will go down-- continue to go down going forward. But through our product competitiveness and our sales competitiveness, we believe we can overcome the shortcomings.

I hope that has answered your question. Currently, we have no questions waiting in line. So we will wait just a little longer. Thank you. It seems like there are no further questions. So with that, we will now conclude the Earnings Conference of KB Financial Group for the First Half of Fiscal Year 2013. The presentation material and the video of this conference will be available for access any time on the IR web page of KBFG. Also, if you have more questions, please contact our IR Department directly. We will do our best to address your questions. Thank you once again for your participation today. Thank you very much.