Greetings everyone, I am GH Park, Head of IR at Hana Financial Group. I express my deepest gratitude to all market participants who are participating in today's business results presentation despite your busy schedules.

We will now begin our 2026 Q3 business results presentation. I would now like to introduce executives from our group and major subsidiaries who are here with us for today's business results presentation.

Group CFO Jong-moo Park is here with us. Group CRO Jae-hyuk Kang is here with us today.

Group CSO Ho-sik Nam is also here with us. Next, from Hana Bank, Hana Bank CFO Young-seok Jung is here with us.

Hana Bank CRO Chang-uk Bae is here with us today. Last but not least, Hana Securities CFO Dong-shik Kim is here with us.

Today, we will first have a business results presentation, and then engage in a Q&A session. Please note that the forward-looking statements regarding the results discussed today may differ materially from actual business results depending on changes in macroeconomic and market conditions.

I would now invite Group CFO Jong-moo Park to walk us through 2026 Q3 business results.

Greetings everyone, I am Hana Financial Group CFO Jong-moo Park. I express my deepest gratitude to all of our stakeholders, including shareholders, investors, and analysts, for taking time out of your busy schedules to join us today for Hana Financial Group's earnings presentation.

I will now cover our 2026 Q3 group business results. First, these are our group business results' main highlights.

Please refer to page 1 of the materials. Hana Financial Group's 2026 Q3 net income posted 1 trillion 221.4 billion won, a 2.4% QoQ increase.

Although fee income decreased QoQ due to subdued stock market trading activity, the absence of performance-related compensation and one-off provisioning cost led to a 5.9% QoQ decline of G&A expenses and 14.7% QoQ decline of provisioning expenses, which enabled QoQ net income improvement. As a result, Hana Financial Group has been recording around 1.2 trillion won of quarterly net income for 3 consecutive quarters, starting from Q1 of this year.

Despite the presence of one-off factors in each quarter, the group maintained a stable level of earnings, which we believe demonstrates an improvement in its underlying earnings-generating capacity. Next, group's 2026 Q3 cumulative net income posted 3 trillion 624.3 billion won, a 5.6% increase YoY, and achieved an all-time high on a Q3 cumulative basis.

The main factor behind that performance improvement was group's core earnings. Group's core earnings, a sum of group's Q3 cumulative net interest—Q3 cumulative interest income and fee income, posted 9 trillion 626 billion won, an increase 14.2% YoY.

Out of this, group's interest income increased 10.4% YoY, and group's fee income increased 29.8% YoY, and showed a steep growth trend. Accordingly, the proportion of fee income in group's core earnings increased 2.7 percentage points from 19.6% in the same period from the previous year to 22.3%.

Driven by solid growth in key fee income categories, including not only asset management-related fees, but also credit card fees and underwriting and M&A advisory fees, the group continued to make progress in diversifying its revenue streams, and Q3 cumulative group ROE posted 10.6% and maintained the previous year's level. Next, Q3 end group CET1 ratio is expected to stand at 13.45%, a 18 bp increase QoQ.

While continuing to pursue our growth strategy centering on RORWA, the group saw a decline in risk-weighted assets, driven by the appreciation of the Korean won and the rationalization of operational risk loss recognition. As a result, the group CET1 ratio improved QoQ.

Next, I will cover shareholder return. At today's BOD meeting, 250 billion won of share buyback and cancellation and 1,165 won per share of Q3 cash dividend was approved.

2026 total cumulative share buyback and cancellation amount, including 250 billion won which was approved today, is at a 950 billion won level, a 26% increase YoY, and is at a record high level. In addition, dividend per share this year consistently increased each quarter, after year-end dividend payout, this year's annual cash dividend amount is expected to increase more than 10% YoY.

In addition, from 2026 year-end dividend, which will be paid out early next year, we will implement tax exemption dividends so that retail investors will actually receive higher post-tax dividend yields. Hana Financial Group's active shareholder return policy is a result of the firm will of the BOD and management to improve our corporate value, and going forward, based on solid fundamentals and effective shareholder return strategy, we will do our best to continuously improve our corporate value.

Next, I will cover the details of our group's management performance. Please refer to page 4.

Group's Q3 interest income posted 2 trillion 674.9 billion won, a 16.2% increase QoQ. This can be explained by the increase following the variable insurance accounting effect from Hana Life, and excluding this, group's Q3 interest income maintained the previous quarter's level and grew around 9.3% YoY.

Group's Q3 cumulative interest income posted 7 trillion 483.2 billion won, an increase 10.4% YoY. Out of this, Hana Bank's Q3 cumulative interest income posted 6 trillion 777.3 billion won, and on the back of asset expansion through growth focused on profitability, it grew 14.1% YoY, and led the improvement trend of group's interest income.

Next, looking at NIM, Hana Bank's Q3 NIM posted 1.57%, a 4 bp decline QoQ. The increase—the decrease—was mainly attributable to higher funding costs resulting from a decline in the proportion of low-cost core deposits, and this reflected a seasonal decrease in core deposits from public institutions due to fiscal spending in the second half of the year, as well as a shift of corporate funds into time deposits amidst rising benchmark interest rates.

Group's Q3 NIM posted 1.83%, and along with the bank NIM decline that I have aforementioned, with the card credit—with the card NIM decrease effect following funding cost increase, it went down 5 bp QoQ. Hana Bank's Q3 Korean won-denominated loan increased 1.7% on a QoQ basis.

Household loan increased 1.0% versus end of Q2, especially around group loans and loans for new apartment final payments. Corporate loans increased 2.3% versus end of Q2, reflecting liquidity and funding demand support to large corporations as well as SMEs, which is in line with our RORWA-focused loan growth policy.

Next, page 5 looks at our group's non-interest income. Group's Q3 fee income was 655.4 billion Korean won, which is a 20% QoQ decline.

This decrease is mainly attributed to less asset management fees, including brokerage fee, which is linked to trading volume and affected by the less stock market activity versus Q2. That said, on a YoY basis, Q3 fee income increased 15% and remains above the solid pace of 600 billion won per quarter.

YTD Q3 group fee income was 2 trillion 142.8 billion Korean won, which is 29.8% increase YoY, thanks to asset management-related fee growth. YTD Q3 brokerage fee is 327.7 billion, which is YoY 142.2% increase.

Trust fee income was 341.6 billion, which is a 37.1% increase. Wrap account fee income was 90.1 billion, which is a significant increase versus the 17 billion won of last year.

Credit card income was 306.4 billion, which is a 7.3% growth YoY with increased credit card usage volume. M&A and advisory fee was 153.5 billion, which is a 55.6% YoY growth and demonstrating the growing performance of the group's IB business.

Q3 group disposition and valuation gain was 291.5 billion, which is a 55.6% decrease QoQ, mainly reflecting the Hana Life's variable insurance-related account reclassification, which on the disposition and valuation gain side had a decreasing effect. Group's YTD Q3 disposition and valuation gain is 951.6 billion, decreasing 15% YoY due to a drop in bond-related gains under rising market rates.

Please now turn to page 6, which looks at group G&A expenses. Group's Q3 G&A was 1 trillion 214.4 billion, which is a 5.9% decrease from the previous quarter, which had increased labor cost tied to Hana Bank and Hana Securities bonus payouts in Q2.

Q3 YTD group G&A was 3 trillion 703.4 billion, which is a 8.5% increase YoY, but Q3 YTD CI ratio is at 38.4%, which is a 0.4 percentage point improvement on a YoY basis. Despite the increase in education tax by 90.6 billion Korean won YoY due to change in tax regulations starting from this year, the group's cost efficiency has been under stable control through stronger group-wide cost control efforts.

Next, page 7 looks at the group asset quality. Group's Q3 provisioning expense was 356.2 billion Korean won, which is a 17.4% decrease QoQ.

Q3 YTD provisioning expense was 1 trillion 19.2 billion, which is a 10.4% increase on a YoY basis. This increase is mainly explained by the Jungang Group corporate rehabilitation-related 74.9 billion of one-off provisioning expenses accrued in Q2.

Group's Q3 YTD credit cost ratio is at 0.30%, stable and within our original business plan. Now, if you turn to page 8, the group's NPL ratio as of end of Q3 was at 0.93%, similar to last quarter.

Our NPL coverage ratio as of end of Q3 was 90.2%, which is a 3.8% improvement QoQ thanks to less new NPL formation. Group's delinquency ratio was at 0.70%, which is up 11 bp QoQ.

This is mainly due to exposure to that previously mentioned large corporate newly being classified as delinquency starting from this quarter. Without this factor, delinquencies would be 0.63%, which is a 4 bp increase on a QoQ basis.

With higher rates continuing, managing asset quality is becoming a more important key focus for us, we will emphasize proactive management of various risk factors and secure sufficient loss-absorbent buffers to be well prepared against both internal and external uncertainties. The rest of the deck has been prepared for your reference, and this completes my presentation on the Hana Financial Group's Q3 results.

Thank you very much.

Thank you. Now we will start the Q&A session.

If I briefly explain how to ask for a question opportunity, if you have a question, please use the hand button on the center bottom of the screen. If you have a question in English, your English question will be consecutively translated into Korean before answering.

We will wait for questions. The first question has come up.

We have from Korea Investment & Securities, Tae-joon Chung. Hello, sir?

Yes, I am Tae-jung Chung from Korea Investment. Thank you very much for this opportunity.

I have two questions. Looking at your net interest margin, it seems that the growth has been a little bit subdued, and can you expect a margin reversal from Q4, and can you give us your take on what the level will be?

Secondly is about the coverage ratio and asset quality. Looking at your NPL coverage ratio, it seems that compared to the past quarter it has improved, but still it is a bit shy of 100% or so.

Can you tell us about the coverage ratio, how much improvement you expect, and what is the expected credit cost ratio that you expect going forward?

Thank you very much for your questions, and we will soon answer them.

I am the CFO of Hana Bank, Young-seok Jung. For your first question about your Q4 NIM outlook, let me answer.

In Q3, the NIM compared to Q2 went down 4 bps, and in July and August, we had the rate hike, and with this rate hike by BOK, it has direct and indirect impact on the bank's profitability. Regarding what is directly impacted in our funding, you can see MMDA or our short-term borrowing, which will be affected directly in many cases.

For indirect effect, you can see that there will be impact from the market interest rate from the mass [unclear], and there will be an impact, and there will be our public rates that will be changed as well. It seems that there will be funding impact in the first hand, NIM will be impacted.

Then on our loan interest rate it will be effective, there will be 2 to 3 bps of impact that will come into being when we have about 25 bps as the standard. In the case of Q3—well, in Q4, we have seasonal funding impact that is quite large, and with the year-end liquidity effect, I think we have actually made room for this, so that has led to more cost ratio, we had the adjustment in Q3.

In Q4, we believe that in the lending there will be some impact from the uplift, and it seems that we will have more of the impact from our bonds, I think that for our lending we will have some improvement, we will have this actually materialize in Q4. I think Q3 will be the low end, and we will see only improvement from this point.

Thank you.

I would like to answer the second question. I am Jae-hyuk Kang, the Group CRO.

Regarding our NPL ratio and asset quality, we had some decline, and I think it was included in the presentation materials. There was some workout from large corps and other procedures, which led some to negative impact on our assets.

The sell-off market for NPL market has been subdued, we couldn't have sufficient NPL sell-off until Q3. That is why we believe in Q4 we will be able to engage in more sufficient asset sell-off, and we believe that the NPL increase will fall within our expectation, and through this sell-off, we believe the coverage ratio, compared to now, in Q4 will go into the three digits compared to the current level we have today.

For credit cost, we do believe that partially can actually go up, and we believe that about 35 bps was our outlook, but it's now at a 30 bps, we believe that it could have a slight increase, but we will manage to keep it in realm. Thank you very much.

We will take the next question. Next question is from UBS, Joo-sang Baik.

Good afternoon.

Yes, this is Joo-sang Baik from UBS. Good afternoon.

I have a question about the capital ratio. On a QoQ basis, your CET1 did improve, but I think the increments, the size of that improvement, wasn't as large as what we had expected.

There are these other factors that attribute to this less-than-expected increase, what was that impact of these other factors in Q3, and what will be your guidance on CET1 in Q4?

Yes, please give us a moment to coordinate our answers.

Yes, this is Jong-moo Park, Group CFO. Versus Q2, our CET1 did come up by 18%—we're expecting an 18—excuse me, 18 bp improvement.

We have to explain that at the capital level and the RWA, there was net income of 1.2 trillion in Q3. That is a 40 bp improvement effect on our capital.

There's the FX, which the FX rate decreased 130—83 won, so that has a 40 bp upward effect on our capital. As there was easing operational risk regulations, and that had a 15 bp improvement effect.

There was the effects that increased our capital, and then in Q3, there was the dividend payouts and buyback, that which had a 20 bp downward impact. Then there is the OCI side, the other comprehensive income side that I have to explain.

There was 1.5 trillion of decrease factor of OCI, so that has a 48 bp decreasing effect. Then the exchange rate, if it goes up, RWA assets, for example, forwards, FX forwards, that has a impact, decreasing impact, on the bank's RWA.

When the exchange rate falls, there isn't a proportional decreasing effect on the RWA. I think that explains the impact of the exchange rate fluctuations on our CET1.

To give you the Q4 guidance, as we are to maintain 13% of CET1, that's our goal, but we will have some buffer to absorb FX rate changes. There we do not have specific investment plans in the Q4 period, we would expect to maintain CET1 similar to Q3, but then reflect some changes for FX changes and efficiently increasing our RWA.

Overall, we are expecting, as a base case scenario, of maintaining CET1 similar to Q3.

Thank you very much. We will take the next question.

The next question will be from HSBC, Jae-woong Won. You're on the line.

Congratulations on your business results in a challenging environment. I actually have three questions.

The first question is regarding Q4 NIM. I think you mentioned that you could expect a NIM rebound, and I think ambiguously maybe a bit that it could happen, but looking at the flow of recent news, it seems that the money is flowing to time deposits, and banks are giving out the interest rates 3 to 4%, the interest is going up.

The reverse money move, it seems that in Q3 it may end, and then we could have some rebound in Q4, but I think maybe it might not happen. There could be some concerns about that.

Can you give us some color about what your thoughts are? My second question is about the capital ratio, you mentioned the OCI, and it seems that for the additional area, that numbers are quite sizable compared to the past.

In this quarter, can you tell us about more in detail about why OCI greatly decreased? It seems that looking at the capital ratio, OCI volatility will be quite important, if you can give us a take on what impacts that, it will be very helpful.

It seems that for the last question, there was a disposition and interest rate effect from Hana Life variable insurance account, there was the interest income impact. Can you give us your thoughts on going forward?

Do you think that this is an issue that will be limited to Q2, but do you think for Q3 and Q4, whenever we have interest rate change, the disposition and valuation and interest income will maybe be affected? Will this be a important indicator for the securities market or for the banking industry?

Can you tell us about what you think it will effect going forward?

Thank you very much for your questions, and we will soon prepare the answers.

Thank you very much, and I am the CFO of Hana Bank, Young-seok Jung. Let me answer that for Q4 possibility of NIM rebound, I think that was your first question, and you also asked about a question focused on funding.

Yes, it's true that for Q3 and Q4, there will be time deposit maturity of a great volume will be matured, and it is true that it is quite sizable. As during Q2 and Q3 of this year, and for large corporations, there was a great liquidity in time deposits.

For the individual, the fund that went out through money move was complemented by corporate fund coming in. We believe that preemptively there was a volume that in Q3, about 11.3 trillion won, we had preemptively funded that in Q3 for about 6 to 12 months in advance.

Then there is the minimization of the excess funding, and it seems that not really maybe on the funding side, but on lending side, the CD rate for large corporate loans, we have about 60% from that, and looking at the total loans in won, about 30% is CD-linked loans. It seems that looking at the lending yield or rate, we will have an improvement from Q4, from Q3, we can expect a rebound in Q4.

Let me answer the next question, and I'm the CFO of the group, Jong-moo Park. Let me answer your question about OCI in relation to capital ratio.

Looking at the group, bank, securities, and life, the OCI-related bonds, well, there has been more than 50 trillion that we have, and we have the treasuries, which has actually risen more than 100 bps, for treasury and government bonds, so that has been reflected. Looking at the total duration, whether this is sizable or not so, we can't really have apple-to-apple comparison with our competitors, but we believe that it is quite sufficient to cover our needs.

The bonds that we have, well, we think that is an effect from the volume of our bonds. Regarding the account effect from variable insurance, when we calculate NIM, there is the card interest income and the bank that we actually calculate together.

When there is the gains and losses that we look to calculate, in Q2, we had variable insurance leading to disposition and valuation positive effect, and there was the interest income that went down in the cost side. When you look at the numbers, looking at the stock market, well, when the profitability is high, disposition goes up and interest income goes down, there's that kind of trade-off.

I think this might have led to some distortion in the assumptions, with Hana Life, we are trying to come up with some ways to actually have more transparency in the accounting so that it could be more easily understood. We are seeing I think the accounting standards that are now being revised, I think that will naturally pick up this effect.

Thank you very much for your answers. We'll go immediately to the next question.

Next question will be from IM Securities, Yong-jin Cho. You're connected, please go ahead.

Yes, thank you very much for the opportunity. I also have two questions.

First question is about your 1.2 trillion of commercial paper from the securities side. You may have concerns of a reverse margin, a negative margin.

What currently is your margin expectation for that 1.2 trillion issuance? I also have additional follow-up questions about your NIM, what were some of the factors on both the funding and lending, and there were some issues I've think with something being excluded from the calculation of the NIM this quarter?

Yes, please give us a moment to organize the answers.

Thank you very much for that question. I'm the CFO of Hana Securities.

You mentioned about our commercial paper issue. There were 4 security companies that had a license last year, now this year, we have 5 companies with licenses.

In total, 9 security houses can issue the paper. With the rates going up, there is very fierce competition over pricing between existing players and new entrants.

We are also responding to that price competition among increasing rates. It is very tight, therefore.

I think average margin is just on the asset side. There is the marketable and non-marketable.

We are still at 100 bp more or plus margin, we wouldn't be at this point concerned about a negative margin. We will continue to maintain at current levels.

To answer your question, this is the bank, and during Q4 there is a 4 bp NIM fall on a QoQ basis. If we divide that into the funding side versus lending side, there is the Korean won loan pricing.

There was about 5.2 bp upward, and then from the funding side, there's the time deposit pricing going up, there was a 7.5 bp decrease factor. Then at a portfolio level, on the funding side, in the second half, both institution and retail, their low-cost deposits decrease.

This is sort of a seasonal factor. Then that had to be replaced by time deposits, and there was a negative impact due to increase of time deposits, decrease of low-cost deposits.

Then you mentioned the statutory or legal expenses not being included related with the coded fees. This is no longer reflected on our loan pricing rates.

Just Q3 alone, that had a 0.7 bp declining effect on our NIM. In Q4 and going forward, that would be a larger decreasing factor on our NIM, because in this year, it was effective as of July.

We're thinking about 1.5 or 2 bp decreasing factor combining Q3 and Q4.

We will take the next question. The next question will be from Hanwha Investment & Securities, Do-ha Kim.

You're on the line, ma'am.

Yes, hello. It's great to be here.

Thank you very much for this opportunity. I have questions about capital ratio and shareholder returns, and some minor questions about your securities.

Regarding lending risk, I think that was applied, and for 2024 for ELS, penalties when it was applied, well, I think this might be reflected in the early half of next year, not this year. For your operational risk, I think the impact was about 1 trillion won or so, if I recollect.

If this was not reflected for next year's RWA rationalization, this I think could be included. Does this include all of this based on the decreased RWA growth rate leading to your TSR?

Can you give us the factors in the calculation? The second minor question is about G&A costs.

Looking at the ordinary operating income that was affected, it seems that this was not impacted because for cost or disposition and valuation was not very good, this was easily predicted, and the top line has gone down about 50%, but it seems that the SG&A really did not go down. It seemed that for your profitability and education taxes, did that lead to higher fixed cost?

Can you tell us about what actually happened to SG&A from this environmental factors?

Thank you very much for your questions, and we will soon answer them.

Thank you very much for your questions. I will answer the first question.

I am Jae-hyuk Kang, the CRO. The operational risk recognition rationalization, well, if we have sufficient plans to stop from this occurring again, I think it was recognized.

Regarding its impact on ELS for next year, we can't really say that it will be actually under that rationalization plan like this year. Regarding the operational risk, it happens after 3 years, and then a judgment is made.

Whether it will be reflected next year, we did not actually have that in our plan, and this was not reflected in the numbers.

Let me answer the second question. I am the CFO of Hana Securities.

Regarding the ordinary operating income decrease in Q3 of 2026 compared to Q2, this is based on consolidated net income, and for ordinary operating income and SG&A, well, in Q3, there was the stock market adjustment, and it is true that ordinary cost actually went down 10%. Looking at ordinary operating profits, you can see this is on a consolidated basis.

Looking at dividend and equity valuation gains, well, there is a time lag. For equity, the equity valuation method, I think that is effective.

There is that difference in net income, but for separate net income, looking at Q1, Q2, and Q3, looking at the net income trend, it's within 100 billion won, it is very robust. Regarding the difference with the separate consolidated net income, I think that's something that is a little bit different.

We'll take the next question. Next question is from Samsung Securities, Jae-woo Kim.

Good afternoon.

Yes, hello. I also have two questions.

My first question, to go back to Hana Securities, about a standalone non-consolidated basis, 100 billion, yeah, that I can understand, but then if you look at the financial statements that we have in hand, your disposition and valuation gain has decreased quite significantly. When we look at Q1 and Q2, other income was a positive factor, but in Q3, there is a significant negative on your other income.

Can you explain this? Is it because overseas alternative assets, or what happened in Q3 on your other income?

I do understand the security business is sensitive to markets conditions, situations. How should we interpret this data, for example?

Are you doing something to stabilize your business performance despite market conditions? Second question is TSR, it's close to 50%.

About next year, with RWA or CET1 expected to improve, what do you think is a fair expectation for shareholders and investors regarding your next year TSR levels?

Thank you very much for those questions, and we will take a moment to prepare the answers.

Yes, this is the CFO of Hana Securities. I'll answer your first question about disposition and valuation gain.

I think it's the same mechanism across all of the securities firms. It is interest and fees.

It's around 9 to 10 times leveraged. In the OTC, a lot of the increases are booked in the disposition and valuation gain, and then the others go out in the other income and interest income.

The disposition and valuation gain, without any factors, there's always an expense of 200 billion on a running basis. About overseas alternative, yes, there were some losses, but those are under control, and there are some in Q3, but it's not extraordinary or unusually large.

I think wealth management is a key area where we are focusing. We have mega branches and a mobile trading system that we've launched, that's where we're recruiting new customers.

We also have Hong Kong and Japan WM businesses that we're planning to expand next year to increase our top line. Your second question—we weren't able to hear your question very well due to some technical issues.

Do you mind repeating your question?

Yes, this is about your TSR. What would be a guidance that we can follow for next year TSR?

You are close to 50%, and it seems next year you're expecting interest income to remain solid, your ROE and RWA will remain fair, there would be more upside there. For example, others, financial groups, are already beyond 50% and going up, because you did say last time it's 50% plus alpha.

What is the guidance? Can you give us guidance on TSR next year considering all of those factors?

I think that is the most question we've gotten today thus far, because when we look at 2026, this year, we've already announced the buyback and dividends, you get full visibility of our TSR this year. Now if we look at next year, '27, I'm also, yes, putting thought into that as the person in charge at working level.

What we are currently operating with now is the Value-up Program that we announced last quarter. We will stand by that.

Then when we hear opinions from investors and shareholders, we do sense that maybe we need to increase our buyback versus cash dividend, or changing the formula behind our cash dividends to use average earnings on a 3-year basis. To go back to your question, we are putting a lot of different thoughts into it, but as our framework is based on RWA increase and ROE, but I think our target needs to be aiming for higher ROE and increasing the size of the pie that is available for shareholder return.

That is actually the essence of our second Value-up plan, which means buyback, cancellations, and cash dividends, the right mix, we're trying to figure the optimal share. That has to be something that has to be discussed with top management and the board.

We do hear the investor and shareholder opinions, and we may have to fine-tune our direction a little bit, but ultimately, increasing enterprise value and shareholder return both, I think pursuing both is the best direction. That may not have completely answered your question, but I've done my best.

Thank you very much. It seems that we have no questions in the queue.

I think we enjoyed a very fruitful Q&A session. With this, we will conclude Hana Financial Group's 2026 Q3 business results presentation.

For those who are not able to join us now or who need to actually revisit our business results presentation, please visit our website, and we will upload it tonight. Please contact our IR team if you have any questions or comments.

We will do our best to faithfully answer them. Thank you very much for your participation.