Earnings Call Transcript - KB Q1 2021

Peter Kwon, Head of IR

Greetings. I am Peter Kwon, Head of IR at KB Financial Group. We will now begin the 2021 Q1 Earnings Release Presentation. I would like to express my gratitude to everyone for your participation. We have here with us at today's earnings release, KBFG SVP, Ki Hwan Ju, who is our Group CFO; as well as other executives from the group. We will first hear SVP Ki Hwan Ju's presentation on 2021 Q1 major business highlights, and then we will engage in a Q&A session. I would like to invite our SVP to deliver 2021 Q1 business results presentation.

Ki Hwan Ju, CFO

Good afternoon. I am Ki Hwan Ju, CFO of KB Financial Group. Thank you for joining KBFG's Q1 2021 Earnings Release Presentation. Also, even in the middle of an unprecedented crisis brought on by the COVID-19 pandemic, I extend my deep gratitude to shareholders for your undivided support and kind patience. Fortunately, during the first quarter, COVID-19 spread came under somewhat of a control, and there was vaccination rollout, which brought expectations for economic recovery. As such, Korean economy is displaying signs of improvement, driven by exports and CapEx investment. And as there were signs of uptrend in the market rate, more positivity was expressed for the sector and banking share prices outperformed the market for the first time in a long while. But when optimisms abound, we, at KBFG, feel that it is important to focus on the fundamentals and think of ways to enhance corporate value and undertake bold innovations so as to respond to future changes. First, we have placed foremost priority on profitability and soundness, thereby, focusing on improving fundamentals for sustainability. This quarter, driven by the bank's core deposit growth and sophisticated loan pricing, we were able to improve NIM by 5 basis points quarter-on-quarter. And the insurance business, whose performance was relatively subdued last quarter, managed to recover margin supported by loss ratio improvement. Also, on stronger competitiveness of core businesses, including Trust, WM, and Investment Banking, we expanded net fees and commission income of the group. To overcome the economic crisis triggered by the COVID pandemic, KB actively joined in on efforts towards a soft landing of the financial system. We have also been quite rigorous in controlling the asset quality through a systematic monitoring of problem-prone exposures and reexamination of the portfolio. Second, we issued KRW 600 billion of hybrid bonds last February, securing additional capital buffer against internal and external uncertainties. On top of reinforcing flexibility of the capital structure to realize shareholder value that falls in line with our capital adequacy levels, which is top tier in the industry, we are conducting in-depth reviews of the shareholder return policy as we speak. Lastly, to make the leap and become a #1 financial platform, KB Financial Group is steadfast at implementing its strategic tasks. KB Star Banking application now has around 17 million customer base. And from a convenience perspective, we are currently integrating the group's core services, thereby, upgrading to an earnings-generating and all-encompassing financial platform. For the credit card business, Liiv Mate, which is the MyData platform, and KB Pay, an open payment platform, form the basis for delivering products and services in connection with group affiliates. Externally, we have expanded product partnerships with many other institutions and have bolstered our competitiveness as an open and comprehensive financial platform. KBFG will boldly respond to impending crisis and risks and will do our utmost to prepare against future changes to further upgrade group fundamentals and corporate value. With that, I will now move on to Q1 2021 financial highlights. KBFG in Q1 2021 reported a net profit of KRW 1,270.1 billion, which is a historical quarterly performance since the company was launched, driven by our efforts to beef up competitiveness of the group's core businesses and the result of business portfolio diversification from our M&A efforts. Also, quarterly figure reported a sizable increase of 74.1% year-on-year, which is attributable to solid core profit growth led by net interest income and net fees and commission income while, at the same time, there was large improvement in other operating income, which was impacted from sudden volatilities of the financial market in the first quarter of last year. As can be seen from the upper right graph, KBFG meaningfully expanded earnings-generating capacity across all segments over the past year while securing incremental earnings from the capital market and the insurance businesses. We also have proven our unparalleled capability in asset quality management, elevating the group's earnings profile in a stable and robust manner. Let's now take a look at each segment in more detail. Q1 net interest income was KRW 2,642.3 billion, driven by M&As, specifically, the acquisition of Prudential Life and solid loan growth of the bank, which led to a 12.5% year-on-year increase, while the improvement in NIM resulted in an increase of 2.5% versus last quarter. Q1 net fees and commission income was KRW 967.2 billion, recording a sizable increase of around KRW 297 billion year-on-year and KRW 179 billion quarter-on-quarter, which was driven by a significant increase in fee income from securities business on the back of the bullish stock market. Also, there was a recovery of trust sales, boosting trust income for the bank. And the recovery of consumer spending also led to increased merchant fees from the credit card business. In Q1, the bank's trust income, which was somewhat muted for some time due to regulations and worsening market conditions, largely regained its level. By bolstering the market competitiveness of the IB business, for the first time on a quarterly basis, net fees and commission income came in at around KRW 900 billion level, which attests to a more improved earnings capacity in the non-interest income businesses. Next is on other operating profit for Q1; with the removal of securities and derivatives and FX-related losses from Q1 of 2020 and the consolidation impact of Prudential Life, other operating profit was up KRW 311.2 billion year-on-year. Regarding the insurance underwriting profit, for non-life insurances, there was a decline in auto accident rate and, on premium hikes, the loss ratio improved mostly around auto insurance. In terms of life insurance, the performance improved versus last quarter due to the base effect of year-end guarantee reserves and improved investment yield. Regarding the group's G&A expense, Q1 group G&A was KRW 1,722.8 billion, which is up 18.1% year-on-year. However, unlike Q1 of 2020, following the acquisition of Prudential Life and PRASAC, KRW 134 billion was booked as related expenses. Additionally, there were expenses related to employees' welfare fund and year-end special bonuses. If we were to exclude such factors, we can say that G&A is being well controlled. For PCL, Q1 group PCL was KRW 173.4 billion. Despite the group's yearly loan asset growth of KRW 37 trillion, PCL was actually down KRW 70.3 billion year-on-year. Thanks to our continuous effort towards quality improvement of the loan portfolio and preemptive risk management, we are keeping asset quality at a steady level. Additionally, KBFG has been expanding its earnings capacity by driving our core competitiveness of each of its subsidiaries, and as a result, non-banking businesses as of Q1 account for 48.6% of the group's net income. This improved the company's earnings profile. For the banking business, to overcome the difficult business environment in the domestic market, we sought out inorganic growth opportunities in the global market, reinforcing our earnings capacity. For the securities business, aside from brokerage services, we strengthened profitability across all the businesses, including wealth management, capital market, and investment banking. For insurance, by acquiring Prudential Life, we were able to increase its contribution to the performance of the group. In the next section, I will walk through key financial metrics. 2021 Q1 group ROA and ROE each posted 0.85% and 12.5%, respectively. Through interest income and fee income-centered core earnings growth and group level revenue diversification, we are improving profitability and maintaining sound earnings fundamentals. To elaborate on bank's loans in KRW growth, as of March end 2021, bank's loans in KRW posted KRW 297 trillion and grew 0.4% YTD. Amidst this situation, household loans posted KRW 163 trillion. Centering on Jeonse loans and prime unsecured loans household loans grew 0.6% YTD. Considering the overall household debt level and loan portfolio mix, we are partially controlling the speed of growth compared to the previous year. Corporate loans grew 0.1% YTD, a marginal increase due to a revitalization of the corporate loan issuing market leading to decreased loan demand. In March, temporarily, there was a significant increase in repayments leading to around KRW 1 trillion decrease YTD. In the case of SME loans, centering on SOHO loans, it increased 1% YTD and is stably growing. As for the net interest margin, 2021 Q1 group and bank NIM posted 1.82% and 1.56%, respectively, and following the previous Q4, a growth momentum is continuing. Since it has already increased by a 5 to 6 basis points level compared to the previous year's annual NIM, this year's solid interest income growth momentum has gained more visibility. Delving into detail, in the case of the bank NIM, core deposits increased by around KRW 6 trillion in this quarter. With the proportion of low-cost deposits among the total deposits continuously increasing, alleviating the overall funding cost burden, bank NIM increased by 5 basis points quarter-on-quarter. For the group NIM, reflecting card asset yield improvement, centering on installment financing, coupled with bank NIM improvement, group NIM increased by 7 basis points quarter-on-quarter. Regarding the group's cost income ratio, the CIR based on 2021 Q1 posted 47.3%, and efforts to increase core earnings and control costs are gaining visibility. On a recurring basis, excluding one-offs, including digitalization costs, it posted 46.1%. Even on a recurring CIR basis, a lower stabilization trend is gradually being shown. For your reference, considering the cost adjustment effect from employee welfare fund reserves in this quarter and year-end bonus expenses accrual, the cost efficiency improvement trend is further gaining visibility. Backed by sound top line expansion and group-wide cost control efforts, cost efficiency is expected to improve further. Next is the credit cost; the 2021 Q1 group and bank credit costs, as a result of our continued prudent lending policy and credit quality management, posted 0.20% and 0.08%, respectively, and are being maintained stably at low levels, proving KBFG's advanced risk management efforts. We are taking into account the situation where COVID-19-related uncertainty is ongoing, and we will continue to maintain preemptive and conservative asset quality management for the time being. Regarding the group's capital ratio as of the end of March 2021, the group BIS ratio posted 16% and the CET1 ratio posted 13.75%, each grew by 0.72 percentage points and 0.45 percentage points, respectively, quarter-on-quarter. Based on our solid earnings fundamentals centering on CET1, we are maintaining the highest level of capital strength in the industry and we are also improving capital structure flexibility through strategic capital management, including issuing hybrid bonds. On this page, I will cover KBFG's digital channel competitiveness. With the development of IT technology, platform models are evolving, and service expediency and efficiency is rapidly improving. The population structure is changing with an increase of 1-person households and the rise of the MC generation, leading to a rapid increase of consumers preferring digital channels. With the expansion of COVID-19, the transition into the untapped generation is accelerating, and the center of weight of financial transaction channels is rapidly moving from face-to-face to digital or nonface-to-face channels. KBFG, which has been preemptively responding to these changes, as of late last year has secured more than 10 million digital customers, which is around 44% of the group's total active customers. Additionally, regarding the bank's KB Star Banking, which is our group's representative digital platform, we have secured around 8 million monthly active users (MAU) as of now and are maintaining the industry's leading position. As a result of customer-centric UI/UX reorganization and diverse product offerings, customer convenience has innovatively improved, leading to rapidly growing MAU each year. Looking at the financial transactions through the group's digital channels in the case of major investment products, including time deposits and funds, around 50% of new accounts are being transacted through digital channels of just Internet and mobile banking. In the past, loan products had a smaller proportion of digital channel transactions, but due to online product lineup alignment and focus on process simplification, it is growing rapidly. For unsecured loans, in 2017, the size of digital channel new loans was only KRW 400 billion per annum. But last year, it grew to around KRW 3 trillion and continues to expand rapidly. I would like to elaborate on some of the major efforts we're making to bolster our group's digital channel competitiveness. In January of this year, among our subsidiaries, the bank and card subsidiaries acquired a MyData business license, and we are doing our best to prepare for service launch in August. The bank subsidiary, through KB Star Banking, with the goal of establishing the group's integrated comprehensive financial platform, is advancing seamless wealth management services through converging wealth management know-how and specialized data connection technology. The card subsidiary plans to offer optimized, customized financial product solutions by utilizing Liiv Mate 3.0, which connects information from around 130 financial institutions as an externally open comprehensive financial platform. In addition, KB Mobile Certificate, which received attention from the market by being the industry's first private digital certificate as a local financial group and the only public sector digital signature pilot provider among financial companies, has surpassed 7.3 million registered users in just 1 year and 8 months after launching. We expect the competitiveness of these mobile certificates to contribute to expanding the group's customer touch points and customer convenience. Additionally, the card has launched KB Pay, which has strengthened competitiveness compared to other existing app cards to expediently respond to the rapidly changing settlement market. For insurance, KB Insurance, based on customer health information, plans to offer ultra-customized comprehensive digital healthcare services. We plan to secure a newly elevated level of competitiveness. Last but not least, KBFG plans to not only bolster digital channel competitiveness but also for wealth management, loan consulting, and other areas where face-to-face channels' importance is high; we plan to offer services that are enhanced through centering on more specialized consulting and differentiated products. Through seamless connection between digital channels and face-to-face channels, we aim to maximize customer convenience and satisfaction, and we will work hard to grow as a solid leading financial group even amidst the future financial industry's paradigm change. I will conclude KBFG's Q1 2021 Business Results Presentation. Thank you for listening.

Operator, Operator

For your information, there is a slight time lag between the Internet and the phone bridge, so please bear with us for a moment. Yes, we will take the first question from Samsung Securities, Mr. Kim Jae Woo.

Kim Jae Woo, Analyst

I am Kim Jae Woo from Samsung Securities. I would like to ask you three questions. First question relates to dividend. There's a high level of expectation and people are looking forward to quarterly dividends. I understand that KB is willing to pay out on a quarterly basis. Do you have plans to do so? And also, when we talked about quarterly dividends, I feel that in terms of interim dividend payout, it may be most optimal. So what's the possibility of that? And also, secondly, according to press articles, I think the major banks are also talking about Internet-based banking. What is your policy or stand vis-à-vis the online banking? For instance, Kakao and others. Since you also have certain shareholding in Kakao, I would like to understand what your position is with respect to the online dedicated banks. And my last question is that your performance this quarter was quite good. Had there been any one-off items?

Unidentified Company Representative, Company Representative

Thank you for the question. I would like to respond to the questions. Just give us one moment. Thank you, Mr. Kim, for those questions. You asked about quarterly dividend payout. At this point in time, we are looking into and reviewing different options. When it comes to dividend payout and shareholder return, I understand that the market has quite a bit of interest. As I've mentioned during the IR session at the year-end of last year, if I may, I want to again summarize what our position is. In terms of payout ratio, as you know, we've adopted a progressive dividend payout policy. This is something that we have been quite steadfast at. Basically, from a mid- to long-term perspective, we aim to increase the payout ratio to around 30%. Second point is that in the second half of this year, we expect uncertainties around the COVID-19 pandemic to alleviate, and also the capital ratios and our earnings stability, along with the quality of our assets and asset quality soundness. In light of these elements, we will do our utmost to actually regain and recover to the previous payout level. We will balance and consider different aspects, such as the need to retain earnings for M&A purposes, interim payouts, as well as share buybacks. Other shareholder return enhancement options are being deliberated by the company. Among Korean financial institutions, when it comes to shareholder return and dividend payout, we've been quite preemptive. If you look back at our track record, you can see that. We've been aggressive and progressive in this front. Lastly, together with the supervising authority, we will also engage in very close communication regarding this matter. The second question will be responded to by our CSO. Regarding the third question on any one-offs, on the expense side, the welfare fund reserves may have had some impact. However, there hasn't been anything significantly exceptional this quarter.

Lee Chang Kwon, CSO

Yes, I am Lee Chang Kwon, the CSO. As you have mentioned, Mr. Kim, there is a lot of interest in the Internet dedicated online bank and launching that business. Currently, the association of banks is discussing with the FSC about allowing financial holding companies to gain an Internet online bank license. If there are any changes in the direction of the regulation by the FSC, we will, of course, be in line with those directions and review the potential possibilities. I think it would not be appropriate for me to specify a particular business model today.

Operator, Operator

We will move on to the next question. Mr. Kim Jin-Sang from Hyundai Motor Securities.

Kim Jin Sang, Analyst

Congratulations, and thank you for your earnings. As the CFO mentioned, your Q2 NIM has surpassed the level of the previous year, and it's quite outstanding. Can you provide us with a breakdown of the NIM? I know that the commercial interest rate has gone up, and I know that your low-cost deposit has come in. So if you can give us a breakdown, it will be very helpful. My second question is about your group's digital or non-face-to-face channel plans. I know that you have a platform and many advantages, and I am confident that you will be quite profitable. But can you tell us about what your forecast for earnings is? If you have any simulated numbers, it will be very helpful. Lastly, we see banks going online, and the Internet and existing sales channels are becoming divided. Can you tell us what you're doing in that direction?

Unidentified Company Representative, Company Representative

Thank you very much for your questions. We will soon answer them. Thank you very much, Mr. Kim Jin-Sang, for your questions. Regarding the NIM question that you first posed, the improvements can be attributed to the volume effect and rate effect related to profitability and the low-cost deposits or portfolio change impact that has added to this improvement. Unfortunately, I don't have specific numbers with me right now, but I’m sure our IR team can get back to you with more details. Regarding the NIM forecast, according to market projections until Q2, there are estimations that the NIM will increase but will likely reach a plateau thereafter. On an annual level, we will safeguard the NIM at about 1.51%. As you have seen in our presentation materials, the interest environment and funding costs are rapidly changing, and we are seeing substantial NIM improvement. We had a 5 basis point improvement in this quarter as well. Regarding the reasons, we worked to increase low-cost deposits, and core deposits increased by KRW 6 trillion, which led to a decrease in our funding cost burden. For time deposits, we contracted the portfolio, and regarding the rollover of our deposits, there was also a notable impact. Overall, we alleviated the funding burden, which resulted in this positive trend. We prioritize prudence and have chosen to pursue loan growth based on a conservative strategy. This approach also contributed to the NIM improvement. In Q1, regarding low-cost deposits, we saw an increase, and we experienced a decrease in time deposits, which further reduced funding costs. On average, this trend is expected to continue, and we plan for prudent loan management moving forward. We project the bank NIM to stabilize at approximately 1.5%. Your second question was about our platform and potential benefits. The market environment is shifting toward an untapped economy, emphasizing the importance of bolstering digital or non-face-to-face channels. We are currently creating and evaluating digital transformation indicators and internalizing these processes. With respect to the hybrid connection of offline and online channels, it is essential that we provide seamless customer experiences, and we are executing strategies to achieve that. We are also focusing on equipping our employees with necessary digital skills to ensure excellence in our service delivery.

Kim Do Ha, Analyst

I am Kim Do Ha from Cape Investment. I have two questions. First is regarding your fee income line item. Compared to my forecast, there was quite a big surprise. Looking at last year, I have been monitoring the banking-related fees. However, due to difficult circumstances surrounding trust and sales to the bank branches, there has been a decline. If you look at other banks that reported earnings yesterday as well as KB, trust has seen a 60% increase on a quarter-on-quarter basis, indicating a strong recovery. How do your front-line teams assess the trust fees and sales-related commissions? Do they believe this trend can continue into Q2 and Q3? That is my first question. My second inquiry pertains to the bank's credit cost, which I think is only 7 basis points. Compared to the past, there must have been some reversals or write-backs in your reserves. When do you anticipate significant write-backs from the reserves that were booked last year to address COVID?

Unidentified Company Representative, Company Representative

Thank you. Just give us one moment to answer that question. Thank you, Ms. Kim Do Ha, for your inquiry. You raised two questions. First, regarding the commission income you mentioned, let me provide an overall explanation on the fee and commission side. At the group level, due to the bullish stock market, we've seen brokerage fee income increase significantly. Regarding the investment banking business, our market competitiveness has strengthened, and in the trust business, we have witnessed some recovery in consumer spending amidst the ongoing pandemic. Overall, we have seen fee and commission income improve across the board. However, regarding sustainability, we are also analyzing the situation to ensure it remains consistent. For WM and our strengthening-related assets, that will be our focus area moving forward. Moreover, in relation to DCM, ECM, and M&A corporate advisory businesses, we aim to expand our sales-related capabilities. I believe that with this strategy, we can achieve double-digit growth on an annual basis regarding commission income. As for your second question, regarding COVID, yes, we preemptively made some reserves, and you inquired about reversals of those reserves. Currently, as we’re still navigating the pandemic and discussing possibilities of a fourth wave, the government’s financial support is ongoing. Therefore, I believe it is premature to discuss any reversals. Only when the overall circumstances normalize will we consider that possibility.

Lee Byung Gun, Analyst

I have two questions. First, compared to your loan growth plans at the beginning of this year, I think there was a noticeable difference. Regarding corporate loans, your growth seems subdued. What is your growth outlook after Q2? I think your initial plan was 5%, but can you share your forecast? Do you think this goal will be met in Q2 and Q3? My second question pertains to the increase in trust fees, which is encouraging. However, there has been a recent reinforcement of customer protection laws, which might create challenges at the tellers or windows in trust operations. Can you describe the atmosphere at your banks physically during the late March to April period? Do you expect these strengthened laws to negatively impact your operations?

Unidentified Company Representative, Company Representative

Thank you for your questions. We will soon provide answers. Thank you very much, Mr. Lee Byung Gun, for your insightful inquiries. Regarding loan growth, I would like to discuss our expectations following Q1. I believe we can provide clarity on your consumer protection law question. As mentioned earlier, Q1 saw bank loans in KRW rise by only 0.4%. Concerning household loans and corporate loans for this year, we recorded 0.6% growth year-to-date for household loans, resulting in KRW 1 trillion of growth. In our annual earnings announcement earlier this year, I mentioned a mid-single-digit growth goal overall. While performance in Q1 has been slower than expected, we are confident in the growth of Jeonse loans and prime unsecured loans. We expect to achieve our mid-single-digit growth goal without significant challenges. The regulations surrounding mortgage loans have affected demand for Jeonse loans, but we anticipate robust demand for higher-quality loans. Regarding corporate loans, we only noted a 0.1% increase year-to-date. Our preemptive management of exposures related to COVID-19 has been exercised. Nonetheless, loan demand remains strong for SOHOs and SMEs, which is encouraging, and we expect Q2 to deliver improved numbers compared to Q1. It is important to reemphasize that we firmly believe our growth goal will be achievable this year. Additionally, we prioritize prudence and asset quality, which will remain our guiding principle moving forward. Thank you very much, Lee Byung Gun. I am the Bank CFO. Regarding the Customer Protection Act, implemented in March, we found that it initially added some confusion at the teller windows, where it could take about 30 to 40 minutes for explanation. This confusion led to frustrating experiences for customers and employees alike. However, as of April, we observed improvements as both parties began to adapt to the changes. We believe that the Customer Protection Act will not adversely impact our performance, and the government will offer a 6-month grace period to review the process based on banks' feedback. If reforms are enacted, we expect our performance to align with expectations. Compared to other financial institutions, we have managed to navigate PF loans with fewer issues, and we anticipate continuing positive revenue trends for trust-related fees this year.

Peter Kwon, Head of IR

Thank you very much. It is already 4:50. Since we don't have enough time, we will take one last question; please contact our IR team for any further inquiries. Thank you.

Operator, Operator

From JPMorgan, Cho Jihyun.

Cho Jihyun, Analyst

I would like to ask three questions. First, due to COVID-19, things were quite difficult. However, if you look at credit card fees, with the government-provided support and benefits, I expected that the number would be quite good. If you examine credit card profit, it actually exceeded my forecast. The government issued disaster subsidies via credit cards, so would this be a one-off impact that has positively skewed results? You mentioned that the CIR of 0.4% was driven by digitalization, since you're doing ERP and digital transformation. However, it doesn’t seem that the CIR improvement is significant. What's your budget plan around the digital transformation and the sustainability of this investment? When can we expect to see meaningful improvement in the CIR ratio? Lastly, most recently, at the National Assembly, they've adopted modifications to provide support to vulnerable classes, requesting about KRW 100 billion in funding from the banking sector. It seems that the government might impose additional measures to engage the banking sector further. In terms of budgeting for such financial support, what are your plans or measures?

Unidentified Company Representative, Company Representative

Just give us one minute. Thank you for your questions. You asked three questions. Responding to your inquiry about the CIR, allow me to clarify that we have seen a downward stabilization trend overall in this aspect. In terms of significant factors impacting this, last year-end included ERP expenses, which we consider an investment into the future. We believe we will be able to recoup this investment within the next five years. Digitalization is a crucial investment necessary to adapt to future changes. Missing out on opportunities could lead to significant adverse impacts, so preemptive investments are required. We will approach this disciplined with a focus on efficient investment to eliminate unnecessary expenditures. In the mid- to long-term perspective, we are targeting a steady, downward stabilizing CIR ratio. You mentioned credit card fee income, which showed a significant year-over-year increase. You asked whether there was any one-off impact related to government support. To clarify, the government provided an allowance in Gyeonggi Province, amounting to around KRW 100,000; we commanded roughly 22% market share of these allowances. Hence, any upward trend resulting from this has been minimal. The primary driver behind the credit card fee income rise is due to a substantial increase in total payment volumes, which escalated by approximately KRW 2.4 trillion. As a result, we have seen a significant boost in merchant fee income. Although there were other one-off impacts, we believe this is an ongoing trend that will persist in the future. Analyzing end-of-last-year credit loss reserves highlighted a significant decline compared to Q1 of last year, where an additional KRW 59 billion was reserved conservatively. We are forecasting a strong overall indication on soundness-related parameters. Thank you for your question. I believe that the government may ask the banking sector to contribute around KRW 100 billion, which would also necessitate that KB supports roughly 20% of that. This has been reported broadly in the media. However, as we continue improving our profitability and generating positive earnings, these financial obligations are manageable for us. As a responsible institution, especially during the challenges posed by the COVID pandemic, we recognize our role within society. We engage in numerous social responsibility initiatives and donations. Hence, we will thoroughly evaluate all these elements to arrive at an appropriate budget. Any future demands will be examined meticulously to determine our response. Thank you. If you have further questions, please contact our IR team; we would be more than happy to assist. With that, we will conclude our earnings presentation. Thank you for your participation.