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Edited Transcript of 055550.KS earnings conference call or presentation 25-Oct-19 7:00am GMT

Q3 2019 Shinhan Financial Group Co Ltd Earnings Call

Seoul Oct 29, 2019 (Thomson StreetEvents) -- Edited Transcript of Shinhan Financial Group Co Ltd earnings conference call or presentation Friday, October 25, 2019 at 7:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Cheol Woo Park

Shinhan Financial Group Co., Ltd. - Deputy Head of IR

* Sunghun Yu

Shinhan Financial Group Co., Ltd. - Deputy President & CFO

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Conference Call Participants

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* Han Lee Kim

KTB Investment & Securities Co., Ltd., Research Division - Research Analyst

* Jaewoo Kim

Samsung Securities Co. Ltd., Research Division - Analyst

* Jin-Sang Kim

HMC Investment Securities Co., Ltd., Research Division - Analyst

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Presentation

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Cheol Woo Park, Shinhan Financial Group Co., Ltd. - Deputy Head of IR [1]

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Good afternoon, ladies and gentlemen. My name is Cheol Woo Park, in charge of IR in Shinhan Financial Group. Thank you very much for joining our earnings conference call. We will now start the earnings conference call for 2019 third quarter. We have, our CSO, Woo Hyuk Park; CFO, Sunghun Yu; as well as Mr. [Tae-yeon Kim], in charge of Treasury and Finance, attending today's call. We will start with a presentation on our third quarter results by our CFO, Yu; followed by a Q&A session.

We will now hear the presentation on our third quarter results from our CFO.

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Sunghun Yu, Shinhan Financial Group Co., Ltd. - Deputy President & CFO [2]

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Good afternoon. This is Sunghun Yu, CFO, in charge of Finance and Treasury at Shinhan Financial Group. Thank you for joining our third quarter 2019 earnings conference call. I would like to now start our presentation on the group's business results for the third quarter.

Please turn to Page 3, which is our performance highlights. Shinhan Financial Group's third quarter net income was KRW 981.6 billion, which is a 15.8% year-over-year increase. Year-to-date net income was KRW 2,896,000,000,000, which is an increase of 9.6% year-over-year. The third quarter results reflect the strength of the further diversified nonbanking business as well as improved growth and profit base and our stronger global operations, which we have achieved through our 2020 SMART Project, which we have been committed to during the past 3 years.

There are 5 key points to our third quarter results. First is that with the growth of our nonbanking and global business profitability, we maintained recurring net income of about KRW 900 billion for 3 consecutive quarters, maintaining a step change in our profit growth trend. In particular, the global business has become the new growth engine for our group, recording KRW 292.1 billion, which is a 19.2% year-over-year growth and the largest-ever overseas earnings. The nonbanking business also recorded a profit of KRW 1,009,400,000,000, which is a 14.6% year-over-year growth based on organic growth and M&A and increased its profit contribution to 34%.

Second is the group's interest income, which continued solid growth based on a well-balanced loan portfolio. In particular, our Korean loan assets maintained its preemptive growth momentum starting from the first quarter, delivering SME and SOHO loan growth of 6.5% and 8.2% growth, respectively, year-over-year. Despite the interest rate cuts that happened last July and the drop in the NIM driven by expectations of further rate cuts, the bank's interest income actually grew by 6.4% year-on-year and 1.8% quarter-on-quarter through stable asset growth.

Third highlight is that we have been continuously shifting away from the traditional reliance on interest income and moving towards the growth driven by noninterest income. The group's noninterest income share has reached 30%. In particular, the positive performance of our nonbank affiliates, such as cards, life and capital was coupled with visible improvements in the performance of Asia Trust and [REITs] delivering 37.3% year-over-year growth in the group's noninterest income. The group's noninterest income foundation will continue to expand with a balanced growth strategy and portfolio adjustments for greater profitability.

The fourth highlight is that the group has achieved the best level of cost income ratio in the industry through our continuous strategic cost management efforts. Together with stable growth in operating income and cost management, our business process improvements have continued in terms of using -- increase in customers using digital services and enhanced cost efficiency, and our cost income ratio has dropped to 42.6% as of Q3, which is the lowest in the recent 8-year period.

Lastly, we maintain a systematic risk management and consistent credit policy in anticipation of future down cycle. During the first half, we focused on preemptive response to possible deterioration in asset quality by changing our credit risk RC and adopting stricter regular credit rating calculation processes for our SME customers of the bank. This did increase the group's credit cost by 6 bp year-over-year to 33 bps, but this is still well within our anticipated and manageable levels.

Now if you will turn to Page 4, I will go over the P&L in more detail. The left-hand chart shows that the group's interest income was about KRW 5.9 trillion, which is a 5.3% year-over-year growth. The bank's Korean won loans grew by 0.7% during Q3 and grew by 5.3% year-over-year, with a balance between household and corporate loans. We were able to maintain a solid pace of growth with a differentiated approach focused on high-quality SOHO loans. The bank's NIM was 1.53%, which is a 5 bp drop quarter-on-quarter due to the July rate cuts possibilities of further rate cuts.

Meanwhile, the bank's consolidated NIM, including overseas branches, was 1.57%, maintaining higher profitability compared to the domestic-only operations. We will continue to focus on maintaining a solid stream of interest income with profitability oriented asset management and stable sourcing of liquid deposits.

Now Page 5. The group's noninterest income was KRW 2,586,700,000,000, which is a 37.3% growth year-over-year, thanks to insurance-related income with the inclusion of Orange Life and increase in securities-related gains. Securities-related gains grew by about 35% year-over-year, thanks to the investment-related gains from the growth of GIB business and increased earnings from the fixed income trading.

Fee income also recorded noticeable growth in all sectors of around 9.8% year-over-year growth, except for credit card and brokerage commission. In particular, the IB-related fees and the lease of financing fees grew by 96.5% and 82.1%, respectively, thanks to increase in IB deal arrangements and efforts to increase new lease businesses.

Next, the group's SG&A. The group's SG&A is up 9.9% Y-o-Y on the back of increase in labor-related costs with Orange Life Insurance and Asia Trust becoming new subsidiaries of the group. When the inclusion effect is removed, it is up 4.6%. Given the increase in reserve for retirement allowance with the recent drop in interest rates and increase in manpower from overseas business expansion, a stable level of 8% is being maintained.

Going forward, the increase of SG&A is expected to be maintained at an appropriate level of strategic cost savings -- cost-saving efforts leveraging the digital infrastructure gradually materializes. The cost-to-income ratio of the group and the bank has improved 1.4% percentage point and 0.1 percentage points, respectively, to post 42.6% and 43.1%, respectively, and this is the lowest level in recent periods.

Next is the group's credit costs. On a cumulative basis for the third quarter, the group's credit cost ratio in Q3 is 33 bp, having improved by 6 bp over the historical average over the past 5 years, but is up 6 bp Y-o-Y. This is due to the fact that provisionings have increased on the back of strength in credit policy that take into account the growth of the card operating assets, including card loans, installer financing and leasing as well as the sluggish economic situation. Going forward, we will continue to engage in preemptive credit risk management and asset rebalancing to minimize any volatility in terms of profit.

Next on Page 6, the group's asset quality. As of the end of September, the group's NPL ratio is up 0.07 percentage point Y-o-Y to reach 0.6%. This is because of the growth in NPL assets as the regular credit rating assessment of the SOHOs were strengthened conservatively this year.

The bank's delinquency ratio is 0.33%, up slightly Y-o-Y as the write-off and sales fell KRW 120 billion, but the card delinquency ratio improved 3 bp Y-o-Y to post 1.41% as the delinquency ratio of card loans and cash advances stabilized.

So despite concerns for a possible deterioration of asset quality, they'll still be maintained at a stable level. As of the end of September 2019, the group NPL coverage ratio stood at 14.2% and 16.5%, while the CET1 ratio is expected to become -- it is expected to come to 11.4% for the group and 14.2% for the bank, respectively.

The group's CET1 ratio is down 20 bp due to the treasury buyback in Q3. But based on the group's stable ordinary profit margins, it is expected to recover going forward. For more information, please refer to the group's major subsidiary detailed performance and business highlights in the presentation materials.

Now following our performance on Page 7. I would now like to briefly walk you through the results of the implementation of the 2020 SMART Project, our midterm goal for 2020 by major strategies. First, in terms of balanced growth strategy of the group, the 2020 strategy platform is bearing fruit. And in the nonbank, noninsurance segment, income growth is being accelerated. The bank's net income growth rate is 3% Y-o-Y, while the noninterest segment is 15% Y-o-Y, maintaining a solid growth trend. And interest income, noninterest income also posted an income growth rate of 5% and 37%, respectively.

Last August 21, the group's 16th subsidiary, [Jinan] AI, was completely brought into the group, sold, and we expect the expansion of the nonbanking sector's profit base to further accelerate.

Second, the group's global business achieved the strongest income yet in Q3 on a cumulative basis, expanding the share of the overseas business up to 10% in terms of profit led by Vietnam, Japan and other key Asian markets, stable performance is maintained and the global nonbanking business also continues to post a solid business performance as the [FGFC] localization strategy is [maintains that] fee.

Meanwhile, Shinhan Bank Vietnam became the first foreign bank approved to apply the Basel II standard. So going forward, we intend to further strengthen our position as a leading foreign bank in Vietnam through a proactive localization strategy. Moreover, we are committed to seek growth in quality through onsite inspections, risk system improvements and other measures to strengthen internal controls.

Finally, the digital Shinhan upgrade results. Major subsidiaries of flagship platforms continue to be operated from the perspective of One Shinhan, and the contribution to operating income is also [up] KRW 125.9 billion Y-o-Y to reach KRW 1.88 trillion.

Also, we launched [INO] talk last September, a digital platform to identify and support innovative growth companies. Going forward, we'll continue to expand the group's digital capabilities, both in and out of the company, to create an ecosystem of innovation. Up until now a differentiated growth strategy has been pursued in a consistent manner through our midterm strategy 2020 SMART Project. This was explained to you.

And finally, along with differentiated performance improvement, we will further commit ourselves to implementing sustainable business practices in Korea.

So the Q3 performance and our 2020 [forecast] been explained to you. Thank you very much.

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Questions and Answers

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Operator [1]

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Now we will take questions. (Operator Instructions) There will be consecutive interpretation for those asking questions in English. So please wait until your English questions are consecutively translated into Korean.

Also, currently, the presentation actually can be seen by our new app -- our IR app for the Android users. If you search Shinhan Finance IR or SFG IR, you'll be able to download the IR app. For Apple iOS users, you can search m.shinhangroup.co.kr and download the IR app.

There may -- we may need to wait for a few moments before our first question is connected.

Currently, we actually have no questions. We will take a few more minutes to wait for those with questions. (Operator Instructions)

We'll take our first question from Cape Investment & Securities, Mr. [Seung Kah Shim].

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Unidentified Analyst, [2]

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Orange Life, can you give us some scheduled updates about completing acquisition? And what about merging Orange Life with Shinhan Life after buying 100% of it, do you have any plan?

Also, second question is about the loan deposit ratio for third quarter and fourth quarter guidance.

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Unidentified Company Representative, [3]

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About Orange Life and our plans of completing the acquisition of Orange Life shares, as you mentioned in your question, we do have plans of bringing that into a fully owned subsidiary. As we mentioned during the second quarter earnings conference call, we do see the need to resolve any market uncertainty, and we would like to therefore complete that acquisition sooner than later.

However, we don't have any finalized schedules about that acquisition, but we will reflect the market expectations and what the market wants to see, so that we will be bringing in Orange Life into our fully owned subsidiaries.

Regarding the consolidation or merger with Orange Life and other life businesses we have, we do have a joint management committee that does preparation work for consolidation or merger integration work. Once we have that plan laid out, perhaps closer to late next year or the year after early 2021, we may look for further integration.

We do know that what the market wants to see is to bring 100% of Orange Life into the group and also combine the 2 life businesses so that we can maximize synergies. We do know that expectation. We are continuing to prepare those steps. About details such as synergies, we will keep you up to date.

Regarding your second question about the loan deposit ratio, our current loan deposit ratio is up to 96.4 -- down to 96.4% due to various factors, including that during third quarter, our quarter asset growth was 0.7%. So it was a slow growth quarter. And then we are actually preemptively managing our loan deposit ratio. So our funding has been increasing steadily.

And so we are at a lowest loan deposit ratio. Under the new loan deposit ratio, we are around 100%. So in terms of meeting the new loan deposit ratio criteria, we don't feel any burden, especially our growth strategy is not too burdensome on the loan growth side. So given that strategy that we have, we do not think the new loan deposit ratio will put that additional burden on our margins.

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Operator [4]

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As there is no further incoming questions, we will wait to for further questions. (Operator Instructions) Your next questioner is from KTB Securities, Kim Haney.

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Han Lee Kim, KTB Investment & Securities Co., Ltd., Research Division - Research Analyst [5]

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I'm Kim Haney from KTB Securities. Additional interest rate cut is expected. So our next year's expectations and impact on the margin?

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Unidentified Company Representative, [6]

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Compared to Q1 or Q2, in Q3, it's lower. And in terms of our credit, it has come down [from KRW 35 billion to KRW 33 billion].

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Han Lee Kim, KTB Investment & Securities Co., Ltd., Research Division - Research Analyst [7]

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And with regards to the fees, the market security impact has been quite significant and also the trading-related gains has been significant, so can you provide more details about this?

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Unidentified Company Representative, [8]

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Yes. With regards about the question on growth and then the margin and then the credit cost provisioning, in that order, let me take those questions.

So with regards to growth indicated this year, we have a strategy of high first and low in the second. We grew [2.6%] in the first quarter and [0.2%] in Q2 and [0.7%] in Q3, because that was a growth rate. And early growth has been a strategy for growth this year.

And with regards to asset quality, I do think that there are some concerns about possible cost, asset quality. So we need to transform that growth strategy to one that will focus on quality. So we need to take into consideration that the economic growth rates can be quite low this year due to provisioning, credit card provisioning. And with regard to asset quality we do think that growth (inaudible) on quality is required.

And next year's business plan has not yet been finalized. But given this year, the business has planned 4% of growth rate as expected. But next year, we do think that it will come down a bit next year. And the focus of our growth will be consistent with the strategy that we pursued this year. SME was a focus and especially SOHO was the center of our growth.

And in terms of retail unsecured loans and high credit unsecured loans, we have focused our growth this year. And this focus of our improved strategy will continue. This will be a consistent strategy that we will carry forward to next year.

With regards to margins, as we have explained, from a [5 bp] fall, so from 1.58 to 1.53. As a result, the additional interest rate cost in Q3 will be linked to Q4 as well. So next year, a continued decline of margin is something that we rather expect.

However, with regards to this issue, [just I do] might have because of declined margins, this will have an impact on NIM. This is your concern. But based on our operational capabilities, at a certain level, we will be able to achieve growth. So the interest income, any major fluctuations in the interest income is something that we intend to prevent. So that is the strategy that we tend to implement.

And as you can see, the NIM and NII, despite the decline in margin, it is actually growing, but to prevent this next year we won't limit the strategy to prevent for next year.

With regards to the credit cost provisioning. In the third quarter, there were no special issues compared to the previous quarter. There was a slight decline, but there were some one-off factors. There were write-backs and there was a KRW [53.1] billion in write-backs. And so the credit cost ratio compared to our expectations, I think it was slightly lower.

In the case of next year, the growth rate will come down a bit. And asset quality, if they come down slightly then what we have planned this year compared to the 35 bp that we have planned for this year, I think it will be a bit lower. But with regards to asset quality in hand, we'll ensure that we manage carefully those areas that we have competitiveness in.

And in addition, in the case of gains from trading of marketable securities. You mentioned this, 6 months ago, when we had the earnings presentation then, in the case of our growth, starting from the second half of last year, that is our mark-to-market expectations, interest rate to fall in 2019, additional fall in interest rates. We have this internal view. We have this expectation internally.

And so because of that, in the case of loans, before the interest rate fell, we focused on early growth of the loan assets. And along with that, in the case of fixed income. So we did engage in proactive investments in expectation of the interest rate fall. The interest rate continued to fall, and then it rebounded slightly, and we actually realized some gains on our trading of markets and securities. And gained efforts in getting to proprietary trading. In the bank sector alone, the gains from markets and securities of KRW 45 billion was realized, and then interest rate was increased again. And so we are, again, pursuing a strategy of purchasing fixed income assets.

And next year, growth about next year, let me add to what has been already explained. In the case of next year, the overall economic growth rate expectations is expected to come down. And so in this situation, what our group is thinking about is that we need to segmentize in this kind of situation. We need to get the risk management, and then we have to selectively select those assets which we can grow. So IB, the key currencies and the focus on the fee income, engaging in sell-downs while minimizing ownership of assets is a focus on fee income.

In order to complete earnings that does not match the asset growth, I think that will be the focus of our growth strategy.

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Operator [9]

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We'll take the next question from [Pre-Investment Security], Mr. [Pek].

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Unidentified Analyst, [10]

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Yes. I have a question about your dividend policy. This year, in 2019, the group has gone through several M&As and have bought some shareholder -- treasury shares. So the capital ratio is lower than other financial groups. So given that lower capital ratio, how much of a payout ratio are you targeting?

My second question is that the core deposits aren't increasing as much as we have expected. So what is your strategy in driving your core deposit growth?

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Unidentified Company Representative, [11]

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To answer your first question about our dividend policy. We have not yet finalized the full year P&L. And so it is a bit early to talk about dividends in greater detail.

But if you look up to last year, our payout ratio was 23.9%. And from 2015, I think for the past 5 years, on average our payout ratio has been around 24% on the dot. And so we are confident that we will be able to increase our payout ratio versus last year. We have that in mind. And as you mentioned, our shareholders' equity ratio is in 11%, which is relatively low.

Regarding our capital ratio next year, we are not expecting high-growth in RW, and provisioning risk won't be that high next year, assuming that next year, we think that we will be able to maintain our trend in payout ratio growth without much issue.

Also, what we're thinking in terms of our capital management is bringing in Orange Life into our fully-owned subsidiary. So accounting for that, we will prepare a more detailed capital management policy as we approach the end of this year.

Regarding the payout ratio, our basic policy has been at least to maintain the current trend that we have seen in recent years. And we have enough to do that.

To follow-up on that answer. Regarding our capital ratio declining slightly in the third quarter. The reason for that is the treasury stock, the share buyback. That's the largest single impact.

Also, in the global side, our assets have been growing. So we have large global assets, but with the exchange rate increasing, there's that exchange rate or currency impact, too. So we do not expect our capital ratios to continue to decline. We think that this is a temporary, probably the lowest point of our capital ratios, what we've seen currently.

But regarding the Orange Life, converting Orange Life into a full subsidiary, I think the shares that we bought back will be used as some of -- as a fund to buy the remaining shares of Orange Life. So that issue will probably be resolved in the near future. So in terms of the capital ratio as of today has already recovered somewhat from the third quarter numbers.

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Operator [12]

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Our next question is from Kim Jin-Sang from Hyundai Motor Securities.

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Jin-Sang Kim, HMC Investment Securities Co., Ltd., Research Division - Analyst [13]

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I have 2 questions. First of all, next year, the pressure on the margins and the loan growth is expected to become weaker compared to this year. And so in the end, cost has to be tightened or in the nonbanking subsidiaries, their contribution to be included overseas, their contribution deposit has to grow. So these 2 factors, how feasible are they?

The securities and other subsidiaries, can you give a big picture of what next year will look like? And the case of SG&A, what is your target for SG&A growth next year? So those are my questions.

And although your business plan has not yet been finalized, NIM or the credit cost ratio and so what is your expectations about the NIM and the credit cost ratio for next year?

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Unidentified Company Representative, [14]

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With regards to margin pressure next year, so is your first question. Well, there is continuing downward pressure on the margin. That is what we said. The policy rate cut effect, if it goes down by 25 bp on an annual basis a 3 bp margin decline will be produced. So in October, there was an additional rate cut and so this will impact next year as well. And the downward pressure on the margin, we believe, will continue.

And so as we have mentioned, there are 3 ways to alleviate this pressure. First, we need to achieve a certain level of external growth. And second, in the noninterest income [definitely] that you quote. In the case of the card, the emergency has declined and so a high level of income growth, we don't think it will be easy to achieve.

However, in Q3, as you have seen, overall, the cost savings have been achieved, and the costs have become more efficient. And recently, the installment assets has been increased, and the card loans have increased. So in terms of fee income and interest income, we seek to grow in that area. As also next year's business plan is not yet out compared to this year, cards we believe we'll be able to defend in a stable manner.

In Q3's performance that we have seen compared to market expectations, we thought that we had exceeded market expectations. That was because of the healthy performance that was performed by the card business. And also, with regards to security, 660 (inaudible) of recapitalization or right issue was done. And because of expansion of operations next year we do believe there is some room -- significant room for income increase in the securities area. And so defending the income in the securities segment will contribute significantly in stabilizing the earnings of the group as a whole.

And with regards to SG&A that you have mentioned, the most important part, actually. In the case of our group, we are in the stage of establishing our business plan, and strategic management of the cost is a very big focus for us. And this year as well, about 3% of SG&A growth had been expected. And next year as well, a level similar to this year is -- make sure that this kind of level will be maintained, we will establish that this is planned accordingly, although it has not been finalized as yet. So it's rather premature for us to give you any concrete figures. But as soon as the business plan is out, let me engage in further communications with you about the details.

With regards to the credit cost ratio, as we have said, this year, the 35 bp was at [this year's] level. But as we have said, our growth rate will go down and asset quality going into next year, if it (inaudible) then the credit cost ratio next year can go slightly up. They're is that possibility. So I think that can be the general direction that we expect.

I think there was a question about the core deposit increase strategy. We didn't have a chance to answer that. I would like to answer that question now. These core deposits, if you look at the past trend of it, when the interest rates go down, during that period, after it comes down, actually these core deposits grow strongly.

We are still drawing up the business plan for next year. So it's too early to share with you the detailed targets of the core deposit increase. But we think that basically, given the various margin situations and also the fact that the interest rates have already declined, next year, we will be focusing on increasing our core deposits.

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Sunghun Yu, Shinhan Financial Group Co., Ltd. - Deputy President & CFO [15]

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This is the CFO. I think one of the questions about next year NIM pressures, what will be our growth strategies for next year? Well, I think one of the highlights of our performance this year was the matrix approach, that this matrix approach have been delivering performance. We have a very unique portfolio that we will leverage. Also Asia Trust has been part of -- become our group. And so we have a total value chain. We will continue to leverage this to pioneer new markets next year. That's another growth opportunity. Also, we will further segment our channels and customer base to create new business opportunities. These are also other ways of addressing business growth next year.

About WM and trusts. These are areas where actually we can deliver profitability without eating into our capital. So by enhancing our profitability structure and also further leveraging our 2020 project initiatives, we'll be able to deliver profits. Also globalizing is not something you do overnight. We have been working at this for several years, and it's starting to show up on our actual tangible performance, which will -- we expect grow even further next year. So these are the ways we plan to address the uncertainties as well as squeeze in NIM next year.

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Operator [16]

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We will wait for a short while for further questions. We will receive just one last question from Samsung Securities, Mr. Jaewoo.

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Jaewoo Kim, Samsung Securities Co. Ltd., Research Division - Analyst [17]

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With regards to dividend, I have some questions. The dividend payout ratio. What we are concerned about is next year, it doesn't seem that the earnings will grow that significantly, given the situation -- actually it's grown faster, then the capital can decrease. So I think capital management will become very important.

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Operator [18]

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Mr. Kim, your phone connection, it's not very smooth. Can you sort of speak further from the mic?

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Jaewoo Kim, Samsung Securities Co. Ltd., Research Division - Analyst [19]

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I'm sorry. So I have questions about the dividend policy and the capital policy. So you said that because income firstly it will fall and RWA growth is in decline as well, then (inaudible) just don't need that much capital.

And if the income growth rate falls, then the RWA will decline as we have seen in year 2000 -- mid-2000. So you might not maintain, -- maybe it's not appropriate for you to maintain the dividend payout ratio. But actually to raise it, it will be more appropriate. So ROE and CET 1, what is your target? And what are your plans for managing these and the treasury buyback?

And so you have invested in Orange Life, but you need to engage a further capital management. Although your business line is not yet out in the mid to long term, what are your principles related to capital management? These are my questions.

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Unidentified Company Representative, [20]

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With regards to our dividend and capital policy, we intend to be very consistent. So in other words, the ROE that we target is a 10% range, and we are actually above the 10% level. But in the case of next year, our income, does continue to grow. And if RWA, [does not] grow, then this can't weigh down on our ROE.

But one of the reasons why ROE exceeds 10%, other factors because of gearing, it's about [10x]. So we do kick in tight on capital management. This has led to such results. And so in the case of CET 1 ratio, it's about 11%. It's rather low. But as you have said, a high level of gearing should be maintained. That is our expectation.

And as you said, in order to realize this, like upward adjustment of the dividend payout ratio of [discount for us]. And in addition to that, treasury buybacks. Given the current valuation, we saw some prices maintain the same level as today, then more proactive on management of the traded stock is required in our view.

So it's still Q3, so it's rather premature to give you more details -- more concrete figures. So we ask for your understanding in this regard. With regard to dividend and treasury. The overall capital policy, we intend to move forward in a very consistent manner. Thank you very much.

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Operator [21]

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Now that completes our third quarter earnings conference call of Shinhan Financial Group. Thank you very much for joining our conference call despite your busy schedules.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]