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 Fiscal Year 2014 despite your busy schedule. The access to this conference is being provided via Internet and conference call, being webcast real-time for Korea and abroad. During the Q&A session, you may call in to ask questions. Joining us in today's earnings conference, we have with us KBFG's CFO, Jong-Hee Yang, and executives from KBFG's subsidiaries. The conference will consist of the earnings presentation by our CFO, Jong-Hee Yang, on the earnings results for fiscal year 2014, followed by a Q&A session, at which time you may call in for questions. Let me now present our CFO, Jong-Hee Yang for the earnings presentation.

Good afternoon. My name is Jong-Hee Yang, the newly appointed CFO of KB Financial Group. Before going into the earnings results, I would like to provide a brief overview of our business for 2014. KB financial group suffered lackluster results, affected by the data compromise of the credit card business in Q1 resulting in segment loan growth and contracting card payment volume. However, starting from Q2 our renewed marketing endeavors led to loan growth and interim fee income. As for NIM, factors such as the bank maturing of the high yield debt led to a relatively sound NIM level up to Q3. During Q4 however, the two policy rate drops implemented in August and October narrowed the NIM. Although the G&A increased during Q4 due to seasonal factors and the bank impairment loss on Taihan Electric Wire and POSCO shares led to sluggish quarterly earnings, the cost side showed a well-controlled stable trend attesting to the group wide cost cutting efforts and stabilization of asset quality. In 2015 we will step up our efforts to realize even more stable results. For year intimation and dividend for fiscal year 2014 is 781 per share. The payout ratio has been fixed at 21.5% of profit before loan loss provisioning. We will continue to further enhance our shareholder value. With that let me begin the earnings presentation of KB Financial Group for fiscal year 2014. First, the financial highlights on Page 3. KBFG's profit for 2014 posted KRW1.401 trillion, expanding KRW129 billion year-on-year. The Q4 profit recorded KRW203 billion edging down by KRW243 billion quarter-on-quarter. The drivers for the annual profit increase year-on-year include the reduced credit cost from improved asset quality as well as the base effect of the BCC equity method loss recognized back in 2013. Affected by the impairment loss…

That was an earnings presentation by our CFO. We will now begin the Q&A session. [Operator Instructions] We will take the question from Dongbu Securities, Mr. Byung-Gun Lee. Please go ahead sir.

I have the following two questions. First of all, it's a very simple question really. It has to do with your dividend policy. Your common equity ratio compared to your peers is relatively high, and compared to another bank, which announced its earnings yesterday which has lower common equity ratio, you have actually announced a similar dividend ratio. So I was wondering, do you have plans to raise the dividend ratio or payout ratio going forward? Number two, when it comes to conforming loans and NIM I have a question. Relatively speaking, because you have a large market share in the home equity loans, I guess your share of conforming loans for securitization is higher. But it seems that you have sold about 40% of the conforming loans last quarter, and of course I understand that you had to meet the FSS guideline of the fixed rate loans. But still compared to your peers in the industry, your share of the fixed rate loans has been higher and of course your home equity loan has been sold quite a bit as well. So I was wondering, going forward into the rest of 2015 would you be actively utilizing the conforming loans for securitization as well? And relatively, your margin has been squeezing quite a bit. So what is the reason for the NIM drop up to Q4 last year and what -- how do you foresee the future outlook?

Let me first answer your questions in dividend area. Let me answer in the following three ways. First of all, earnings has to precede to give out higher dividend and of course we have to think about payout ratio and we have to think about the 15.5% BIS ratio that we have to meet by next year. You mentioned that our peer and our dividend ratio was about the same. Perhaps it is because of the Basel III requirement that we actually meet until 2019. Our position is that we will do our best to maximize dividend payout for our shareholders. So rather than simply looking at the payout ratio itself, I think that we should more be focus on the earnings enhancement, so that ultimately we could payout more dividend per share. And when it comes to confirming loans for securitization and also your question about NIM, let me answer those questions. On KB Kookmin Bank typically had always had a higher portion of the confirming loans, and also the FSS guideline of fixed rate loans has been raised last year from 17% to 20%. So because of that we have to meet that guideline and we sold more fixed rate loans. And this year we were given another guideline of 25% for 2015. It would definitely be a burden for us but this year yes we have some expectations about another policy rate drop in the first quarter. So we have created a taskforce team to review outlook. So last year we grew the loan assets basically on the fixed rate products. So it was a little lopsided. So this year we will move away from that and we will seek more balance growth. And also when it comes to the growth of the fixed rate loans, we will not be only focused on the Q4 period, but we will even it out throughout the year. So we are looking at various measures to deal with this issue. So as we enter into 2015 we believe that the overall NIM is expected to be around 2.49%. So this year if we can we will do our best to maintain the NIM at the previous level.

We will take the next question from Samsung Asset Management, Kyu Song Shim. Please go ahead.

My question is regarding business plans for 2015, as much as you can share, would appreciate that. And you've mentioned the NIM. What would be the some of the measures where you could further defend a further squeeze on your NIM?

The overall direction in terms of business plan for 2015 is that in terms of the asset growth, last year it was mostly growth that was driven -- was driven by lopsided growth. But this year we would go towards more balanced growth. So in terms of the household unsecured loan and starting last year we have set up a TF team to come up with different measures. And also if you look at SOHO loans, now we are also going to focus on small amount unsecured loans. So with the inauguration of the new CEO, we are developing many different counter measures. Especially also for the SME sector. We see that there are certain stabilization that is taking place. So internally according to our profit analysis, we are almost meeting the BEP level. So when it comes to the underwriting models, we are in the process of making this model more sophisticated. So in terms of the household unsecured loans and SOHO and SME focus, rather than the home equity or the home equity loans, we're going to shift the focus. And also because of the data reach problem last year, in terms of our sales operation, it was muted. So in terms of the demand deposit, we were able to gain as much as we had hoped or expected. Especially we had been – there was – it was subdued in terms of our attracting credit card users and we weren’t able to provide adequate -- ample amount of asset management services. So for this year we're going to be very active in soliciting credit card users and also attract settlement accounts so that we can increase the demand deposit volume. And in this process we want to regain the trust from our customer base so that we can also further expand on our asset management fees and commissions. And also on the non-banking side, there were some strategies like the M&A. But the organic growth had been lackluster but from this year we are also going to refocus on the importance of strengthening organic growth and we are also reviewing possibility of expanding on the fees and commission. And in terms of the margin. So I'd say this year if there is going to be another rate cut, just like what's the case in August and October of last year, and if there is an additional cut in the first quarter of this year, this will have certain impact. We have measures in place to respond to such movements and we currently have a taskforce team in place. So the asset growth and also in regards to margin -- in the aspect of the funding, what would be the most optimal timing to, as we go about funding or aspects that are being discussed underneath that tax force team. And once that gets finalized we will communicate with you again.

Next question from UBS Securities, Junho Lee. Please go ahead.

I have two simple questions. First of all, it's just as number question. Looking at your cash book between Q1-Q3, your net profit number has been changed I think that your corporate tax amount has been changed. So does it have to do with the reversal of the corporate tax because of the recent winning of lawsuit and how will it impact your accounting going forward? Secondly, what is the progress on your LIG acquisition?

Let me first address your question regarding LIG acquisition. There are two things to consider. First, in the United States, we've to meet the requirement to be a financial holding company. So we have to seek that approval process. Secondly we've to further finalize the price negotiation with LIG. And because this is a two party negotiation I cannot elaborate too much. Now, when it comes to FSC approval, we have sent an executive to FARB in the United States and the Korean government is quite supportive. So that's going to be a matter time. We will be obtaining the approval, I'm sure. Typically it takes about three months to obtain the approval in the United States. It will just take some time. When it comes to some fact related number question we've got in the credit card related litigation, in terms of the cash flow basis, KRW466.6 billion will be reversed or refunded. Accounting wise at FSS, we have given the following guidelines. Now main tax will be recognized as DTA and will be reflected as surplus amount immediately but remaining $199 billion will be reflected in the P&L in the rest of the year.

We don't have any more questions that are coming in. Thank you very much for all your questions. So, ladies and gentlemen with that we will now conclude the earnings conference of KB Financial Group for fiscal year 2014. The presentation and VOD of this conference will be available for access at any time on the IR Web page of KBFG. Also if you have more questions please do contact our IR department. We will do our best to address your questions. Once again, thank you very much for participating today. Thank you.