00:00 [Abruptly Started] performance, which we have available on our website. First let me elaborate on the group net income. Woori Financial Group’s cumulative net income as of the third quarter of twenty twenty-one was two trillion one hundred and ninety billion one at the highest performance ever recorded on an annual basis. Despite uncertain local and global circumstances, the group achieved an increase of ninety two point eight percent year-over-year, which resulted from stronger proper generation capabilities stable at quality and continued found cost management. A company’s net income for the third quarter of twenty twenty one was seven hundred and seventy billion won and approximately sixty billion won was booked [Indiscernible] due to the private funds delayed redemption. Net income surpassed the quarterly high of the second quarter and again set a new quarterly record. 0:57 Ever since the first quarter, we have been replacing the record high every quarter, continuing on with their earnings turnaround trend. Next is the group's net operating revenue. The accumulated Group net operating revenue for the third quarter was six trillion and eighty-one billion won, up twenty-point six percent year-over-year. Interest income was five trillion eighty-nine billion won and non-interest income was one trillion ninety-two billion won. 01:26 Although margin improvements was stagnant in the third quarter, thanks to solid growth centered on loans to SMEs, the group's interest income as of the third quarter reached five trillion eighty nine won. As of the third quarter, the group's non-interest income amounted to one trillion ninety two billion won, up fifty seven point two percent YoY, driving the improvement and business performance. 01:54 Our efforts to break away from the profit structure centered on interest income has paid off and the group's non-interest income has now grown stronger in terms of composition as…

14:12 Thank you very much. We'll now begin the Q&A session. [Operator Instructions]. For smooth proceeding of the session we will receive only one question per person. And your time may not able to offer opportunity to ask questions to every participant today. The first question is by [Indiscernible] Kim Jin-Sang, your question please.

14:54 Hello, thank you very much for that excellent performance. And I do have a question with regard to the expenses. I do see that it's being managed well and it seems quite exceptional in terms of your cost management. So if you look at nonbank domains including securities, we have seen bonuses and we're seeing a bullish market in terms of expense, I think that we will be okay till year end, but It would be very difficult to control the cost going forward after year end, especially going to next year. So I would like to understand how are you going to differentiate yourself in terms of cost management going forward and especially for next year in terms of increase in C/I Ratio and also in terms of the CIR, I think that you may have a particular target for next year. So if you may share that with us, we would appreciate it. Thank you. 16:03 Yes, Mr. Kim Jin Sang from Hyundai Motor Securities, thank you very much for your question. and as you've mentioned that you've asked the question with regard to our cost-to-income ratio how it was so successful and also in terms of the net term to twenty twenty two, what our direction would be. So as we prepare for the question, please bear with us for just moment.

16:30 Yes. I'm [Indiscernible] CFO. Let me answer that question. So we were sending the plan last year for the bank, it was to remain as usual and we've mentioned, we've decided to increase the non-banks in accordance with their performance and we've engaged the rationalization of personnel costs and other costs. So with regard to cost management for this year, is going to be on track as planned. And as mentioned in terms of the composition. So, we will continue on to engage rationalization of the personnel and the banks. So the bank business is about seventy percent to eighty percent of expenses so we're going to rationalize personnel in the banks to manage the cost. But of course, we're going to utilize our digital channels the cost there. We will be executed in an aggressive session and in the case of non-banks, this is an area M&A, so we do need active investments, but in terms of the scale, it's not as big, so it will not have a significant impact, but what we want to do is in terms of non-bank investments is going to be in line with operating revenue. So the banking sector that has a significant impact, we're going to actively rationalize and manage the cost for personnel to maintain C/I Ratio in the mid-to-long run, we want to make to achieve the forty five percent target range as quickly as possible. Thank you.

18:02 Thank you very much. Next person is with the question is not yet ready, I believe that our participants are still trying to come up with their questions. Yes, I see a question. So the next question is from Yuanta Securities, Tae Joon Jeong. Please, you have the floor.

18:27 Yes, good afternoon, my name Tae Joon Jeong from Yuanta Securities. I’d like to thank you all for your excellent performances. And I do have question November and within Q4, I believe that IVR live is going to be approved and I understand that you have whole plans already, in that case, how much of capital do you have already and so if you acquire a securities company or if anything non-security companies, if you were to acquire a new asset, compare to other subsidiaries that you already have what's that do synergy effect do you expect? 19:09 Yes Mr. Tae Joon Jeong, thank very much for your question. So Woori Financial Group’s future growth and also IRD approval and the future M&A plans and also the synergy effect coming from the future business portfolio. So these were the questions used by are participants, So please bear with us. As the prepare answers.

19:43 Yes I'm CFO, my name is [Indiscernible] I would like to answer your question. First of all, I have to be once its approved, I believe more than one percent ratio is going to be improved or increased so one percent means that about two trillion one capital would increase and also twenty trillion one in terms of risk weighted assets. So, is how that is, provided that we have an improved IRB approach. So with that I believe that we can do some more M&A going forward, and on top of that. If you go to your second question. I believe your question was about our furture M&A plans. As a financial group, we believe that our business portfolio is not yet complete and their form as you radio where we're trying to acquire a securities company and also eventual capital business or and it's NPL so we believe that in generate maximum synergy effects we believe though we need securities on, but if you think about securities, are there not many companies out there for sales. Therefore, we are doing a lot reviews and our first tentative for M&A although the market does not have any tentative already, we are targeting to acquire a securities company and as I mentioned earlier here, NPL or an capital companies those are also that type of companies that we hope to acquire. 21:15 And we currently have about a six trillion won that we can invest, and we do have a lot of room to manoeuvre with that and once our [Indiscernible] is approved, again, that would mean more than one percent and in terms of capital [Indiscernible] one and risk weighted assets twenty trillion won, so thank you.

21:40 Thank you. Next question is by KB Securities [Indiscernible]. Please go ahead with your question.

21:48 Thank you for the opportunity to ask my question. In the quarter, I can see that the name of the banking sector slightly decrease and as was mentioned in the presentation in the fourth quarter and next year going forward mentioned NIM will be improving and going forward. So already at the end of August [Indiscernible] rate hike and in terms of rate hikes it is to come within the year, so then in the fourth quarter and next year, can you give us more information on how NIM will be improved going forward? Would you like to elaborate on that please? Thank you. A –Unidentified Company Representative: 22:27 Yes, Mr. [Indiscernible] thank you very much for question. The question to with, the temporary stagnant to NIM improvements for the third quarter and on the forecast for fourth quarter and also considering the policy rate hike within the year about our guidance. So please bear as we prepare the answer for question. 22:52 Yes let me answer that question. From July twenty nineteen and May twenty twenty and increased by one point two five percentage points. So if we think of one point two five, NIM would be a drop of ten BPs and in terms of the impact. But this year we've improved in our core deposits and also increased in loans profitability so through our efforts, we were able to provide ten BPs and able to bring this level to previous year and in August, policy rates increased by zero point two five percent and in November, there is to be – the policy rate hike, so we're seeing a rate hike trending overall. In terms of CD rates, it was a temporary decreased and a loan repricing was winding down So the third quarter NIM was stagnant to previous quarter levels. So if we look at the overall rate market it being on the increase in cost deposits and increase in loan profitability, will be something be pushing forward so in August, zero point five percent increase and in November another zero point two five percent rate hike if we consider all that and in fourth quarter, it would be probably about one point four percent and early next year, mid one point four percent that's what we predict. That is our guidance. Thank you very much.

24:21 Thank you very much.

24:23 Next question is from HSBC Securities, Mr. Won Jaewoong. You have the floor.

24:32 Yes. Thank you very much for that wonderful performance. I also have a question related to NIM; however, I think that our third person asked a question already covered that. Next I would like to talk about lending growth, I think household lending regulation is going to be in place and continue to be in place, in that case as new loans or large corporate banks, I believe you probably require strategies, changed the strategy that this so are you going to continue to grow those loans in order to control your credit costs, are you going to try to reduce other lending? So I’d like to know about your lending growth prospect. Yes, thank you very much Mr. Won for your question from Woori Financial Group of what is our future growth plan related to lending and also household lending digging into consideration was would the or growth plan. Thank you very much. And please bear with us as we prepare the answer.

25:38 Yes, I would like to take the question. This year and also next year, I believe that we do have a capital ratio that we have to meet and it’s relatively lower compared peers at the moment. So I believe that where CET1 ratio, our target is to achieve eleven percent so eleven percent of CET1 ratio and we also have that we get into consideration government revolution on household lending, so overall my plan is that there is going to be a growth of six percent to seven percent of course. So we are trying to prepare a plan for that and our prospect or our outlook is sixty percent to seven percent. Again because of absolute move on the regulations I believe that it's going to be a bit lower for the entire group however for non-banking and also for global business, our goal is to cost any grow, our lending especially for global business, I believe we can grow our lending further, so again our CET1 ratio it has to be maintained at eleven percent this year and next year. Thank you.

27:01 Okay. Thank you very much. Let us now move onto the next question from [Indiscernible] Your question, please.

27:11 Very nice to meet you [Indiscernible] financial investment. I have question with regard to the digital business. So recently with neighbour financial, there was a smart to our lending project or program that was launched so in the media, as mentioned it surpassed to one hundred billion in ten months so out of the many banks. With neighbour financial, how were you able to strike this affiliate relationship and where there is specific terms and conditions and second has to do with the profit split, how do you split that profit and third, is with relative data that you taken acquire the process and any other information. Is there any that you can actually you to twice or acquiring the process? And what is the target lowering pricing that you are looking into or you're planning?

28:09 Yes. Thank very much for your question. So let me briefly summarize your question. So first, it was on the linked loans with Neighbor Financial and you asked about the background behind business what the terms and conditions and profit split structure and also about any data or with regard to digital IT Information, are there any additional benefits in this working relationship so as we prepare your question please? Bear with us. Yes. Thank you very much for the question. I'm wondering charge of the digital business and the CEO. So it's regard to me for smart store the loans, as you're very well aware, it's not a retail service. It is for the vendors on the smart store. So it's for these small entrepreneurs and the basic objective of this loan business as it's the case front the smart store it's to support the small stores, these small entrepreneurs. So that is the major purpose behind this program. But of course, it's a very difficult for them to extend loans or get loans. 29:33 So this is a business certification profile our system where for these small entrepreneurs or small businesses, we do have a separate credit evaluation model where in the detail level with Neighbor and Neighbor Financial and Woori would came together or to put together new due diligence or deliberation model and extend loans based on the system, in terms the commission – in terms of the fees and commission, compared to other online platforms when we do engaging a loan brokerage, it is a certain percentage of the actual amount that's extended. So that's the terms and conditions behind this business relationship. 30:16 And regarding the data, it's a completely different type of data that we can get from other financial companies. For…

31:56 Next question is from Hanwha Investment & Securities. We have Mr. [Indiscernible].

32:03 Yes. Thank you very much for the opportunity. I am Kim. I have two questions. So you already talked about M&A, so it this need be redundant. However, through Various – using various scenarios I believe that I charged you are reviewing and you mentioned how there is, securities company tentative to available yet? So what is your plan with regard to your income. So, I believe you would have some scenarios ready to do what you do with regard to the rolled over income or revenue that you have in Q3, you have an M&A and in case you don’t have M&A, what are you going to do with returning back to the stockholders? And I believe that there a high possibility of delinquency going forward. And if there is a corporate delinquency, do you think that will be able to maintain [Indiscernible] this year or next year so, I hope that you can answer this credit related question?

33:21 Thank you much for your questions. I believe there were two questions in general. So M&A strategy related question was one. So what was the possible timeline and our capital plan going forward? So capital policy was the first question and second, talked about the potential this rate hike and also potential for [Indiscernible] and therefore in that aspect what are going to look like next year. So please bear with us as we prepare your answers. 34:16 Yes. Thank you very much, first I would like to address M&A and also capital related question. So once we have IRB approved and late September, I believe CET1 ratio is going to increase to eleven point four percent and as I mentioned earlier, I believe that we can acquire without difficulty and it’s my securities company, however if you want to talk about a large securities company, then they would have a risk-weighted assets of thirty trillion to forty trillion won and if there available the M&A market, then, I think that we would have to secure more capital through capital increase in order to acquire. So we are going to make do preparations for possible scenarios. Thank you. 35:10 And as for your asset quality related questions we have Mr. [Indiscernible]. Yes, thank you very much for your question. Next year's credit outlook. Well, our production is that currently because of COVID-19, we do have some loans issues, but I don't think that we do have any loan risks. During the past three to four years of when it comes to lending, we've been working through increase prime loans. And at the group level, eighty nine percent of our lending has been extended to prime lenders and therefore provided that, we don't have any financial crisis or like [Indiscernible] next year. I don’t think there will have any difficulties of maintaining that. That's all. So next year, when it comes to provisioning and also potential credit risks. We believe that we will be able to manage up safety and safe please, but as related to COVID-19 related lending, we are also pretty closely so that we can maintain stability as you have probably seen any use articles or size of the loans or not that big and also we do have these secured loans and we do have a collateral. So we don't that much a concern Thank you.

36:37 Yes. Thank you very much. And you have time, we would like to receive one final question, we have from JB Financial Investment, Mr. [Indiscernible] Please go ahead with your question.

36:52 Yes, hi everyone. [Indiscernible] From JB Investments. So I just wanted to confirm one more – one thing that was already mentioned. In year end, that was zero point four percent, just mentioned about the dividends and with the dividend, I think that this may drop. So I know that you're trying to maintain such ten plus, but as you said that acquiring mid-size securities would be no issue, but considering the loan related regulations next year, I know that you are going to control your capital ratios but if there isn’t any plans, you don’t believe that there there is enough buffer so then if it's mid-size securities firm that you're thinking of acquiring it we take that as presumption in terms of CET1. How much are you are able to tolerate below ten percent or eleven percent and what would be the final, I would say hard stop in terms of CET1. So this is about your plans going forward. What is the level that you would be able to tolerate and in terms of hybrid if you look at the amount it’s not but in order to acquire share one capital, I believe that considering next year as well. Are you thinking of maybe issuing more additional Tier 1 capital? And what can be replaced? 38:22 Yes, Mr. [Indiscernible], thank you very much for your question. So it had to do with our capital ratio your end, you wanted to some more information on your end guidelines. And also about the hybrid. With regard to new securities about the volume issuance and to our strategy going forward. Please bear with us for just a moment.

38:52 Yes, let me answer that question. So eleven percent is the plans for capital increase for next year as planned? And of course, if we do a share of a mid-size securities plan than the capital ratio will temporarily decrease. So our minimum guidance would be two point five percent of the capital buffer to market regulation and would be ten point five percent that we want to protect in guarantee. And within ten point five percent we believe that an M&A acquisition would not be an issue and with this is about two point five percent for retail loans as capital buffer that's when we do have that as that capital conversion buffer as maximum and in terms of hyper securities. When we converted to holding company, once in twenty nineteen and nine hundred billion additionally afterwards so the holding company has enough hyper securities in place and next year, we would be repaying some of the banking sector and we're thinking of that and we were remain that level, we're not going to increase significantly, we will be maintained in that level. Yes, investors and market participants thank very much for your questions.

40:29 And with that, we would like to conclude third quarter twenty twenty one with Woori Financial Group's earnings call. If you do have any additional questions, please contact our IR department and we will have your questions answered. Thank you very much for your interest. And Woori Financial Group and thank you for your participation.