Park Cheol Woo: And second question, given global financial crisis, given the current economic recesssion, we mentioned that there can be KRW200 billion additional credit costs according to our stress test. And so, even if we set that aside, it won’t be set aside all at once. It will be distributed across different quarters. And I would like to highlight that the asset — given the asset quality we have sufficient provisioning. We are just preparing ourselves for uncertainty in the economy and we are going to maintain our conservative provisioning policy. So in the second half our credit cost was around 53 bps. It was quite high. In the second half it’s going to come down, but maybe I think it will be around 4 bps. And so like you’ve mentioned, we are increasing the target of CET 1 or 12% to 13% and this has impacted the size of our cancellation.
As we move up the CET 1 ratio, if we maintain 13%, we’ll be able to continue. Even if we maintain at 13%, we’ll be able to continue the initial capital return policy that we announced earlier this year.
Operator: The next question will be by [indiscernible].
Unidentified Analyst: Thank you for the opportunity to ask the question. There’s one question from my side. So for the overseas commercial real estates, there have been continuous issues raised. I would like to get color on your exposure.
Park Cheol Woo: Thank you for your question. Please give us some time to prepare for our answers. So yes, for our commercial real estate exposure, our Group CRO will take the question.
Bang Dong Kwon: So yes, I’m Dong Kwon Bang, the Group CRO. Thank you for the good question. If we look at our overseas real estate investment, it’s around KRW4 trillion, but to just add a little bit of explanation to that, there is about KRW1 trillion substandard and mostly in hotels around KRW100 billion and America KRW2.5 trillion and KRW800 billion in Europe and others are in Asia. We did a full scale investigation into the current status and the additional loss that’s expected. We are going to carry out proactive monitoring and because of COVID until now, due diligence onsite was quite difficult, but now things have changed. So onsite due diligence activities are possible. So we are looking at the plans of how we could do so on site at the group level. If we take a look at the exposure, it’s around KRW4 trillion Korean one as explained. Thank you.
Operator: So we are waiting for the questions to come in. So while we wait for the questions, please bear with us for one moment. The next question is from [indiscernible] from Hana Securities.
Unidentified Analyst: [Indiscernible]
Park Cheol Woo: Yes, we cannot hear you. Yes, we can hear you now.
Unidentified Analyst: I was on mute, I’m sorry for that. In the second half I was already assuming 150 billion cancellation of stock. It has gone down to 100 billion. And I think given the changes, the number of shares the subject for dividends can actually increase from last year. So regarding the stress capital buffer, there can be some announcement by government in the second half of this year. The target you mentioned was 12% and I think all the minimum regulatory requirement adds up to 10.5%. If the stress capital buffer is around 2% to 3%, then do you still have room to buy back and cancel shares? So what are your expectations for the stress capital? And you know, what are your plans regarding this? And can you still maintain 100 billion to 150 billion cancellation every quarter even with the changes in the minimum regulatory requirement? And so I would like to add for some more details here.
