Despite this low level, we have set aside very conservative provisioning and the asset quality rating has been done in a very conservative manner and also the PF asset evaluation has also been done very conservatively that is the reason why we have set aside large provisions. And the question as to whether we would have additional provisioning this year, so conservative provisioning from the point of view of the present, if we assume the worst case, well, collaterals, and the worst case, how far the price of the collateral can fall that is the basis of our scenario. So from the present point of view, we do believe that sufficient provisioning has already been set aside and so we don’t foresee any additional provisioning for this year, as of the present.
So starting from this year, unless there is any exceptional events in the real estate market, we do believe that we will be able to manage developments going forward.
Operator: Thank you very much for the answer. We will take the next question. We are waiting for the question to come in Please hold. We don’t have any questions in the queue now, so we will wait. We will take the next question from HSBC. We have Jun Jeong on the line.
Jun Jeong: Thank you very much for very superior earnings despite the difficult circumstances, and thank you very much for your shareholder return results. So I would like to ask you about the standard that you have in mind because the KRW320 billion of share cancellation and you mentioned the PCA and the payout ratio. So I think that it is over 38% or so. So Is that all total TSR, or can you give us a little more colour, on whether we should see that these will change so total shareholder return ratio that you have in mind, can you give us guidance for that?
Jae Kwan Kim: Thank you very much. I am CFO of the group Jae Kwan Kim as you had elaborated. I think there will be some changes according to which calendar you are using on a calendar basis for the share buyback and cancellation for this year, when we retrospectively look back to the previous year, it’s 38.6%, as you mentioned, and for share buyback and cancellation this year, we see for 2024, and we had KRW572 billion for last year. So it’s 37.5 percent or so.
Operator: We will receive the next question from Jeong Tae Joon from Yuanta Securities.
Jeong Tae Joon: Good afternoon. My name is Jeong Tae Joon. Thank you very much for the opportunity to ask questions. Recent issue with regards to the ELS, so the company, what is your view on this? And what are your future responses that you are formulating cope with this situation. Thank you very much.
Operator: So while we are preparing the and sir, please wait for a few seconds. Thank you.
Jae Kwan Kim: So, this year, the bank is pretty much focused on the ELS responses and also rebuilding the trust of the customers. The FSS audit is still underway and so there hasn’t been anything decided in terms of, compensation for the damages.
Operator: We will take the next question from Samsung Securities, Kim Jae-Woo. You’re on the line.
Kim Jae-Woo: Thank you very much for your good earnings results and shareholder return results. So regarding the CET1 ratio, I think it is improving and compared to your peers, I think it is very superior. And to what extent do you think total shareholder return can take place? So if it goes beyond 13%, they say that they will have up to 50% of returns to shareholders that exceeds that. So do you have any special guidance that you can remark upon related to that and we also have the quarterly dividends. And can you give us some guidance on quarterly dividends for this year as well? Thank you.
Jae Kwan Kim: I am Jae Kwan Kim, the CFO of the group, regarding shareholder return, I would like to emphasize three factors. First, we have the highest level of earnings power or generating power in the financial industries. So there was a pre-emptive provisioning for social contribution last year, but excluding that, 2023 recurring net profit stands at KRW3.5 trillion level and total operating profit posted about KRW16 trillion a 17.8% growth, a record high level. Our superior earnings power capacity will become a great source for shareholder return. Secondly, according to the mid-to-long term capital management plan we announced in February, we will faithfully implement our shareholder return policies. Through detailed and sophisticated capital management plans, we will secure the highest level of capital adequacy in the industry and for capital in excess that goes beyond 13% of CET1 ratio, we plan to actively utilize this for shareholder return.
If there are no special circumstances related to financial volatility and our company’s management goals. So based on such a principle, the recent decision on shareholder return was made in full consideration of the HSI linked to ELS related uncertainties going forward barring any exceptional events. We intend to carry out our existing long term capital management plan faithfully. The KB Financial Group has, over the years, played a leading role in terms of shareholder returns, and we intend to implement an even stronger shareholder return see going forward. Finally, I understand that there’s a lot of market interest nowadays in enhancing the enterprise value of low PBR stocks. But when a decide, detailed plan for a value of program comes out, we will be sure to put forward proactive responses to ensure that enterprise value is enhanced.
Regarding the quarterly dividends that you asked about, we plan to do so this year as well, and we will discuss in detail with the BOD for details regarding our quarterly dividends this year.
Operator: Next question is from Kim Do-ha from Hanwha Securities.
