Good afternoon. My name is Kyu Sul Choi, the Head of IR at KB Financial Group. Thank you for taking part in today's earnings conference of KB Financial Group for year 2013, despite your busy schedules. The access to this conference is being provided via Internet and conference call, being webcast realtime for Korea and abroad. During the Q&A, you may call in to ask questions. Joining us in today's earnings conference, we have with us KBFG's CFO, Woong-Won Yoon; and executives from KBFG's 5 subsidiaries. Your conference will consist of the earnings presentation by our CFO, Woong-Won Yoon, on the earnings results for year 2013, followed by a Q&A session, at which time you may call in for questions. Let me now present our CFO, Woong-Won Yoon, for the earnings presentation for year 2013.

Good afternoon. My name is Woong-Won Yoon, the CFO of KB Financial Group. Before starting the earnings conference, I would like to extend my sincere apologies for the recent customer data compromise. Deeply feeling the magnitude of this circumstance, the management at KB Financial Group promises to build the most robust information protection and management system to prevent any repeated incidents of this kind. We will also do our utmost to minimize the negative impact from this incident, while making extensive efforts to rebuild the customer's trust. Once again, my deepest apologies and appreciation are extended to all of you who for your unwavering support. First, let me give you an overview on the business results last year. 2013 was marked by proactive cost controls and continuous risk management, which resulted in lower G&A and provision for credit losses, stabilizing the expense front. In the meantime, the persistent margin squeeze and low growth led to declining interest income, compressing both the top line and the overall profitability. However, we anticipate 2014 to be a year of solid loan growth, in line with the economic growth rate and modest enhancement in NIM, resulting in the rebound in the top line. On the expense front, we expect a sustained stabilization following the previous year. KBFG will do its best to boost the bottom line by pursuing a business strategy focusing on the basics. Allow me to present the earnings results for 2013 for KB Financial Group. Let me remind you that the existing presentation structure has been revised into a group consolidated format to be more closely in line with the Financial Group's earnings and trends. We also added some interest areas of the investors for your convenience. Let me begin with the financial highlights. KBFG's 2013 annual profit posted KRW 1,283,000,000,000.…

[Operator Instructions] We will take the first question from Morgan Stanley, Mr. Hojoon.

I have the following 2 questions. First of all, it has to do with your credit card business. I believe that your results were pretty sound in 2013. But this year, because of the lack of one-off gains and also there would be the suspension of new user acquisitions, some operation suspensions. So what is your outlook on the card business in terms of the profitability and what would be the impact coming from the operations suspensions? Second question, I believe that the real estate market is showing some signs of recovery. So relatedly, do you have any specific targets for mortgage loans for 2014? And do you think that it could possibly boost the NIM going forward?

Yes. Let me answer your questions. First of all, regarding the credit card-related operation suspension ruling, you asked about the financial impact. I could discuss both direct and indirect impacts. When I say direct impact and the related expenses, I'm referring to diverse types of direct expenses. For instance, there can be some reissuance of cards that will involve some expense. And there are some postal expenses, as well as the exemption placed on the SMS text message related fees being exempted. So altogether, we are looking at about KRW 36 billion. But already -- out of that amount, about KRW 10 billion was already reflected in Q4 numbers already. Aside from such direct impact, you are also asking about the possible impact going forward coming from the suspension of operations, but it's difficult for us to give you an exact number at this particular juncture. But as we mentioned before, this suspension of operation only has to do with acquisition of new customers and new sales activities only. Therefore, when it comes to existing card accounts. For those cardholders with card loan optionalities and cash advance limits already placed on them, there will not be any disturbance to such services. So of course, we could experience some type of indirect type of erosion of a certain level of loyalty and some convenience on the part of the customers. We are making all our efforts to minimize the impact. Your second question had to do with the mortgage outlook for 2014, and you also linked your question with our NIM outlook as well. Last year, when it comes to the retail banking, we mainly led the loan growth mainly around the mortgage loans. So going forward, in 2014, we believe that the real estate market will not be that weak after all. If you recall, in 2013, the market actually grew, mostly led by the non-banking sector rather than the banking sector. Going forward, I think that there will be continuing demand for mortgages. So I believe that, compared to 2013, our basic sales and business direction will not be changing too significantly. As for NIM, we believe we pretty much bottomed out in Q4 2013. So starting from the first half, especially from the first quarter of this year, we believe that it will begin to gradually rebound. Of course, we have to keep in mind that the first half NIM for 2013 was pretty high. So on an annual basis, I believe that the annual NIM for 2014 might be slightly hovering below that of 2013, but we will do our best to minimize the negative impact.

We will take the next question from Mr. Chung Uk Choi from Daishin Securities.

I am Chung Uk Choi from Daishin Securities. My first question is on a non-interest aspect other than the loss on the sales of the loan receivables, I think there is other one-off, especially, the NHS-related aspects. I think some other banks have recorded certain figures. So could you elaborate on that? Second question has to do with BCC. I understand is that your book value for Q3 was KRW 147 billion, but you mentioned -- I think it was KRW 73.6 billion, so that's about half the previous size. So I am wondering, was this impairment actually booked based on some of the due diligence that you've implemented and how did you come up with this number, KRW 73.6 billion? Because basically when you write down loans [ph] and people don't expect for additional impairment losses, but that didn't seem to be the case. So I am wondering whether would there be future cases of additional write-downs for the impairment loss of BCC. Is there that possibility going forward? My last question is that, for KB Card, you've mentioned potential financial impact and you mentioned direct cost and financial cost, we could define some of the assumptions and we could run some scenarios. But one aspect that's a little bleak or opaque has to do with the lawsuit. And I know that the lawsuit has not yet been emerged, but Lotte Card has mentioned that they're even considering to compensate people for psychological impact. But when you calculate your plans for your profit going forward, do you also have to consider those aspects as well?

For the non-interest line items, and you talked about some of the one-offs, in terms of the National Housing Fund, we have mark-to-market valuation and the losses had been reflected. In terms of the BCC question, if you look at it on a book value basis, we have about KRW 68 billion remaining on our books. Related to the BCC, we have conducted a more rigorous evaluation on the individual aspect, and we have booked for the impairment losses. The basis for this calculation is that, up to-date, for individual assessments to be implemented, there are differences in standards between ours and the local authorities' guideline. So in order to make sure that we are objective, together with the outside accounting firm, we have recalculated the figure. And we have aligned the accounting standards, hence this impact. For additional write-downs going forward, in our judgment, we believe that, realistically speaking, there is not a high possibility for this and as not -- as BCC operations become more normalized rather than to say additional loss, I would think that we are more focused on normalizing BCC -- or business operations. And you talked about potential lawsuits related to the data breach. It was already mentioned in the press that the -- actually, the regulatory authority and the investigational bodies have said that there is not any further damages coming from this data breach, and there had not yet been actual cases of such. And it's very cautious for us to be talking about the specifics related to the lawsuit, but we believe that even if you look at the past precedents, only the liabilities were applied in a very limited basis. So as of this point, we do not think that the risks related to the potential classes [ph] lawsuit is not that high. I hope that answered your question.

We'll take the next question from SK Securities, Jung-hyun Bae.

Earlier, you mentioned that starting from Q1 of this year, you expect the margin to begin to recover. In my view, during the past Q4, if you exclude the one-off margin enhancement factors, I think that -- I'm wondering whether you're guiding us that your NIM would be picking up starting from Q2, perhaps, or Q1. Now from the banking side of the business, your low-cost deposit increased quite a bit. Despite such factors, what is the reason for the bigger margin contraction compared to other banks? I do understand that you are very sensitive to interest rate movement, but that doesn't explain everything. So I was wondering why your margin contraction is more severe. Could you explain about that? And the inflow of low-cost deposits -- now with regards to this low-cost deposit, do you think that such inflow will continue to grow in a solid fashion throughout the rest of the year, or do you think that we should anticipate an outflow?

Yes. I'll give you a very brief answer about that. First of all, regarding margin, you asked a question about that. The contraction in margin mainly has to do with the retail side of the business. As you are well aware, we have been conducting home equity loans for many, many years. And in the past, there are some outstanding home equity loans that were -- that had very high interest rates. But in the process of re-aged loans being refinanced, we had to lower the interest rate quite a bit. So compared to other banks, that did not have such high -- big portfolio of home equity loans. We were impacted in a bigger fashion. Please understand it this way. We believe that, going forward, especially as we go into the second half of this year, our margin will begin to pick up. And you were concerned about the inflow of the low-cost deposit and you are wondering whether it will continue. I believe that, in the market, there is ample liquidity, that's one thing. And also, secondly, in order to secure funding, we have been very much focused on winning more number of settlement accounts. I think that led to such bigger inflow of low-cost accounts. And because we were able to acquire more number of settlement accounts, we are securing and acquiring more steady flow of low-cost deposits. So we don't expect any significant outflow in the near future.

From Kiwoom Securities, Young-Soo Seo.

I would like to pose 2 questions. After the data breach incident, on the non-banking side which includes securities and insurance, there are some concerns that M&A initiatives could be delayed or such M&A initiatives could actually fail. There seems to be some concern in the market. So could you provide us what your position is related to your M&A endeavors? My second question has to do with your household loan. Now you have the home equity as well as mortgage. If you look at home equity, in Q4, it fell. However, your mortgage loans actually increased. So could you explain as to the reason behind this?

After the data breach, and you talked about the potential change in the M&A stand, realistically speaking -- and please bear in mind, I can't provide you a definitive position. But when it comes to M&A endeavors, our tradition has been quite steady. We believe that, currently, in the market, there are assets that are coming out into the market that could help us further strengthen our non-bank portfolio. So those assets that could really contribute to diversifying our portfolio or strengthen our base, if we believe that a certain acquisition is helpful for us in strengthening our business portfolio, then we will very actively discover those M&A opportunities. With regards to what impact the data breach incident would have in our M&A endeavors, we have not yet really delved into that aspect. In terms of your home equity question, I haven't fully understood your question. So I will provide you the answer through our IR team.

Thank you very much. We will make sure that your answers are fully addressed through the IR department later.

We don't have any further questions in the queue. So with that, we will now conclude the earnings conference of KB Financial Group for year 2013. The presentation and VOD of this conference will be available for access anytime on the IR web page of KBFG. Also, if you have more questions, please contact our IR Department. We will do our best to address your questions. Thank you once again for your participation today. Thank you very much.