Greetings. I am Cheol Woo Park, in charge of IR. From the previous quarter, we have been presenting our earnings results through our digital platform utilizing our YouTube channel and Zoom app and not via the internet-based web method we have been using. To briefly explain about our connection method, you can view our presentation in Korean language via YouTube, and if you have any questions, please contact us via Zoom. In addition, since only Korean language will be used via YouTube, please connect via Zoom and click English if you would like to hear English interpretation. Please refer to our website for further details about our connection method. This method will increase ease of approachability to more investors, thus we would like more investors to take an interest in our event going forward. Now we will begin our Shinhan Financial Group 2021 full year business results presentation.
Here with us today at the business results presentation, we have newly appointed Group CFO, Lee Taekyung, Group CDO, Kim Myung-hee, Group CSO, Go Suk-Hyun, Group CMO, Heo Young-taek, Group CRO, Bang Dong-kwon, Shinhan Bank CFO, Jeong Sang-hyuk, Shinhan Card CFO, Moon Dong-kwon, and Shinhan Investment CFO, Kim Sung-won here with us. We will first hear about the 2021 yearly business results presentation highlights from Group CFO, Lee Taekyung, and then Group CDO, Kim Myung-hee will also deliver results, and then we will have a Q&A session. I will invite Group CFO, Lee Taekyung, who will deliver 2021 full year business results presentation.
Greetings. I am CFO Lee Taekyung in charge of group finance from this year. First of all, I would like to express my gratitude to everyone who is participating in our 2021 business results presentation despite your busy schedules.
Along with the global spread of Omicron, among pressures for global interest rate hike, there's still very high uncertainty, including concerns over inflation and global supply chain vulnerabilities. In this situation, we have been strengthening our basic fundamentals and securing our future new growth engines and striving to continually increase our shareholder profitability rate. Now let's go to page four of our business results presentation, group business results highlights, and I will cover the 2021 business highlights. In 2021, Shinhan posted KRW 4,019.3 billion of net income, a record high level since we were first established, and the earning level has been on the rise for eight consecutive years.
Excluding non-recurring items which occurred in 2021, including KRW 173.4 billion of increase in ERP cost and KRW 467.6 billion of investment product-related losses, recurring level net income posted a KRW 4.5 trillion level. Interest income along with SME-centered loan asset growth and bank's quarterly margin improving by four basis points grew KRW 898.4 billion. In non-interest income as well, non-banking securities and fee income improved and drove our earnings growth. CIR posted 45.3%, which may seem to have slightly risen year-over-year, but excluding ERP effect, CIR posted 43.1%, a 1.3 percentage point improvement year-over-year.
Lastly, despite the additional provisioning preparing for uncertain economic outlook and termination of COVID-19 forbearance programs, our credit cost ratio, CCR, posted 27 bps, a 14 bp improvement YoY, and is in a downward stabilization trend. From the next page, I would like to elaborate on the current status of investment product losses, which was pointed out to be a factor of uncertainty for our group. Until 2020, according to our conflict settlement process, we recognized expenses which was limited to the investment products which could be recognized as expenses. However, from 2021 latter half, in order for customer confidence recovery and removal of uncertainties regarding losses, we actively implemented private reconciliation. Accordingly, constructive obligation occurred, and it became possible to reasonably recognize costs, and the maximum amount of losses was assumed according to the accounting standard in 2021.
KRW 467.6 billion of investment product losses was recognized as non-operating expenses and minimize uncertainty going forward. However, there are parts where losses could not be recognized according to accounting standard as of late last year, and we expect that there could be after-tax KRW 90 billion to a maximum of KRW 200 billion of losses that can occur during the next two to three years. However, we improved all processes from product sourcing to sales so that such incidents do not occur again. Next, I would like to explain in more detail regarding net interest income. Group interest income posted KRW 9,053.5 billion, an 898.4 billion won increase, 11.0% growth.
This was driven by the bank's margin, quarterly four basis points improvement and growth in bank loans, 9% growth, focusing on SME loans, and I would like to explain about the group non-interest income on page seven. Group non-interest income posted KRW 3,638.1 billion. A 7.7% increase YOY. However, excluding insurance related non-interest income centering on non-banking, it increased 19.7% YOY. Fee income increased KRW 292.1 billion, a 12.3% increase. When you look at the details in the table below, you can see that there was an increase of trust fee income on the back of Shinhan Asset Trust trust income and bank ERP pension trust balance growth, as well as a sizable increase in FX fee income, investment banking, and lease financing fees.
Securities and FX derivative income posted KRW 289.5 billion, a 25% growth, and this was on the back of good performance in securities transaction gains and financial investment self-trading. I would like to explain in more detail regarding expenses from page eight. 2021 G&A posted KRW 5,754.3 billion, a 10.2% increase YOY. Excluding the sizable ERP expense of KRW 268.1 billion in the previous year, G&A growth rate posted 7%. The high growth rate compared to average years was due to group digital platform and new business-related advertisement and promotion expense increased. The strategic expenses which was saved through digital transformation is being utilized in new businesses, including activation of digital platforms.
As aforementioned, the CIR excluding ERP expenses posted 43.1%, a 1.3 percentage point improvement YOY. On the other hand, group provisioning on the back of the fading of the 2020 COVID-related additional provisioning due to the underlying effect decreased KRW 394.2 billion, a 28.3% drop YOY. Despite the KRW 187.9 billion of additional provisioning preparing for uncertain economic situation, including the spread of Omicron and the termination of COVID-19 financial forbearance programs, the credit cost ratio posted 27 basis points, showing stabilization. Delinquency rate, which can be seen as a leading indicator of credit costs, as you can see on the table on the right, is showing downward stabilization for both bank and card. Next is page nine, Capital and Major Income Indicators.
CET1 ratio is 13.0%, a 13 basis points improvement YTD. CET1 ratio based on the standard before the adoption of revised Basel III credit risk is forecast to be 11.8%. On the other hand, with the profit expansion in businesses with high ROE, including capital and asset management, group ROE improved by 0.8 percentage points YOY. Please refer to the graph in the lower right side of the slide for our CET1 movement in 2021. We plan to continuously improve capital adequacy and profitability, including establishing core earnings basis and solid net income growth.
The group's common share year-end dividend for the fiscal year of 2021 was resolved at the BoD to be 1,400 KRW per share, and including the quarterly dividend in the previous year, it is now 1,960 KRW, and the common share dividend payout ratio posted 25.2%, and the total dividend payout ratio, including preferred share, is 26%. We will strive forward to continuously improve shareholder value, including making equal payout for quarterly dividends and make them routine. Next is page 10, Results for Different Businesses. For the group's 2021 net profit, the non-bank contribution is approximately 42%. Within the non-banking sector, the profit contribution of the capital market sector, including Shinhan Capital and Shinhan Investment, expanded to 40%, confirming the diversified business portfolio despite the uncertain business environment.
For the digital strategy on the next pages 11 and 12, I'd like to invite the new CDO in charge of the group's digital strategy, Vice President Kim Myung-hee.
Hello, I am Kim Myung-hee, as was introduced. I will talk about the group's digital strategy. In 2021, the group has continued its efforts to improve customer experience and provide services close to life on the digital platform, which is a customer contact channel. As a result, MAU of Shinhan SOL and Shinhan pLay grew 25% and 28% respectively YOY, recording the highest growth rate in the industry. In particular, Shinhan Bank conducted various gamification-based marketing with KBO Metaverse Baseball Field and Nexon KartRider for the MZ generation, and is currently promoting the establishment of Hey Young Campus through an agreement with a university. In October last year, Shinhan Card newly launched pLay, which converges various life services with the existing pay-oriented service, and recently introduced services that apply new technology such as My NFT.
In addition, Shinhan Bank and Card are promoting their business in earnest this year as they acquired the MyData business license last year, and Shinhan Investment and Life are preparing to acquire the license. Each subsidiary plans to provide differentiated services by integrating data into their main businesses such as banking, payment, investment, and healthcare. In addition, we plan to enhance customer value through bold attempts in non-financial as well as financial areas such as How-FIT, an AI motion recognition-based home training platform, and Ddaenggyeoyo, the first delivery app launched by a financial company. For detailed digital coverage and cost savings from digital channels, please refer to the document. Next page. The group is also actively pursuing investment and alliances with digital new technology companies.
Last year, we created a KRW 300 billion digital strategic investment fund, a first for a domestic financial company, and invested KRW 173 billion in 11 companies, expanding our efforts to improve customer contact points, capture future markets early, and secure new technologies. In addition, we are expanding the ecosystem of win-win growth with startups through Shinhan Future's Lab, the first accelerator launched in the financial sector. In the Baby Unicorn 200 fostering project hosted by the Ministry of SMEs and Startups, 10 companies, the largest number in the financial sector, were selected and their expertise was recognized, playing a pivotal role in accelerating the group's DT. In addition, we are strengthening cooperation for future businesses through strategic partnerships with other industries such as fintech and ICT.
Recently, we signed a digital alliance with KT in the form of a share swap of KRW 440 billion. The two companies plan to jointly advance to a digital company that goes beyond finance and telecommunication in fields such as AI, metaverse, and NFT. The group declared a new vision of how finance should be more friendly, more secure, more creative, which is consistent with the group's interest income shifts and economic fluctuations. As confirmed in the Q4 results, margin improvement due to interest rate rise and loan asset growth led interest income growth has expanded. With the base effect of margin improvement and asset growth made during 2021, there will be a significant increase in interest income in 2022 as well.
In addition to this, interest income is expected to increase further this year if margins continue to improve due to an upward rate revision and if the effect of asset growth is taken into account. According to our internal estimate, a 25 basis points rise in the base rate will affect the bank margin by about three-four basis points for a year. Considering the number of rate hikes expected by the market, margin improvement is expected to be larger than the previous year. Asset growth expectation is currently in the mid-5% range by bank standards. Page 17, I will explain the loss-absorbing capacity according to economic uncertainty. Due to economic uncertainty and the scheduled end of the COVID-19 forbearance program, concerns about further asset deterioration in 2022 are growing. In this regard, first, we maintain the PD for collective assessment, the same conservative level as 2021.
The effect of increase in PD this year due to sluggish economy will likely be limited. Considering the end of the COVID-19 support program, there was additional provisioning of KRW 187.9 billion for vulnerable borrowers according to individual assessment, maintaining enough buffer. The following pages include detailed performance descriptions of the group and subsidiaries and key business indicators. This concludes my presentation, and now we will proceed with Q&A. Thank you very much.
We will now take questions. If you have a question, please log in to the Zoom session and then use the Raise Hand function. The same goes for English-speaking participants. Please press Raise Hand, if you want to ask a question. We are going to provide a simultaneous interpretation throughout the Q&A session.
We could have some pause until we get the first question, so please hold. The first question is from Hyundai Motor Securities. Mr. Kim Jinsung is on the line. Please ask your question, sir.
For your treasury shares, I know you have some plans to use them going forward. Is there any plan for cancellation of those treasury shares? Do you have any plans to have any changes in the ownership? Second question is about your G&A growth because even excluding the ERP cost at 7%, which is quite high, and we know that you have had a lot of costs going into digital platform, but compared to your peers. It may seem that your digital platform costs are maybe a bit larger. Is that a reason? Is there a special reason why it is quite high?
For this year, what is your expected growth for digital platform investment? I know that there was a high base last year, so do you believe that it will go down this year?
Thank you very much for your questions, Mr. Kim, and we will soon answer your questions. Please hold.
Group CFO and
Our Group CFO, Lee Taekyung, will answer your question.
Uh,
You asked a question about our capital policy, and for the quarterly dividend, we had been executing it since last year and for this year. We also want to make this routine with the fixed amount, as was aforementioned. We mentioned the share buyback, and regarding whether we're going to do it or not, we are not going to make a comment now. When we do, we will communicate this to the market. Of course, we will keep in mind cancellation as well. For our G&A, we will hear from our Group CMO, Heo Young-taeg, and then from our CDO, Kim Myung-hee.
I am Group CMO Heo Young-taek. Regarding G&A expenses, compared to the previous year, what was extraordinary is ERP. In the past, for ERP, it was mostly took place at banks in the past. However, for the previous year, there were many subsidiaries because there was ERP for the credit card, which takes place every two years, and at Life, there was a sizable ERP. From Capital as well, we had ERP, which was not something that happens often. That happened often last year, so it might seem that we had a high growth in G&A costs. However, excluding all that, we believe that we can have disciplined management of G&A expenses. We do not believe there are other expected burden on the G&A costs going forward.
I am Lee Taekyung, our Group CFO. For this year, regarding investment in digital or new growth areas, we will make continuous investments. For CIR, we are going to have a downward pressure, so the CIR ratio for this year is about 43.7% that we are forecasting. We are going to keep with our cost management. Thank you very much.
The next question is from Mr. Lee Byung-keun from DB Securities. Please go ahead.
Yeah.
Hello, I am Lee Byung-keun from DB. Thank you for wonderful results. I have two questions. This may be too narrow of a question, but earlier you were talking about the investment products, and you took care of the accounting, and I do appreciate that. There were some items that could not be taken care of accounting-wise, and it could be KRW 92 billion-KRW 200 billion. What kinds are these, and how will you take care of these? Second question is about credit card. Consumption is expected to recover, so we are seeing good signs. What we are concerned about is the funding rate is going up, and with the DSR regulation in place, the loan assets will be affected in June and July because of the loan asset regulation.
What is the amount of asset size that will be affected? So DSR, the loan contraction, how will you deal with these issues? Thank you.
Thank you very much for the questions. Please hold as we prepare for the answer.
Yes, the first question will be answered by the CFO, Kim Sung-won of Shinhan Investment.
Hello, I am Kim Sung-won, the CFO of Shinhan Investment. As for the provisions that can be possible accounting-wise, we have done what we are required to do, but we have to wait for the decision by the Financial Dispute Mediation Committee, and we may see a change in the price of the underlying assets, and so the compensation might change.
Within the next 3 years, as was mentioned by the Group CFO, it is expected to be in the range of KRW 90 billion-KRW 200 billion. Thank you.
Hello, I am Moon Dong-kwon, the CFO of Shinhan Card. I'd like to answer the questions you posed about Card. Looking at the financial institutions, it seems like there are concerns about the Card business. The funding rate growing and regulations and merchant fees, these are the three challenges, and they could be downside risks. Shinhan Card is coming up with the necessary strategies. As for your question, the rise in the funding rate and the DSR regulations and the merchant fee and its impact on the income, it could be in the range of KRW 200 billion. For several years, we have anticipated these changes.
As was mentioned by the Group CFO, we are getting the preparations, and we declared a vision in 2019 for sustainable growth and solid fundamentals. These were the vision and the strategies. Looking at the details, we have diversified into new businesses. For example, the merchant fees, we have been able to deal with these, so non-settlement, non-payment was supported. 40.9% of the business is for non-settlement businesses, card loan and cash advance services. The loan assets, we are confirming that, and we are also increasing the auto loans. As of 2021, we expect the general assets to be KRW 1.8 trillion and auto loans to be about more than KRW 8 trillion. We do have earnings power in the loan assets.
We have data sales business and platform-based businesses which garner actual profits. Last year, with the income from the data sales, we were able to sign a contract of KRW 10 billion, and so we are making the visions into a reality. Second, the group strategy was to save cost by building a digital platform. We were able to save KRW 100 billion with the digital transformation, and we plan to cut additional KRW 120 billion. These will be quite positive in our changes. As for ERP, we have been very aggressive. Looking at the global business, we have our subsidiaries, and we were able to preemptively deal with the losses in the four subsidiaries overseas. We believe that these earlier efforts will be visible this year.
I know this year is challenging, but of the card companies in Korea, Shinhan Card is differentiated in that we were able to make earlier preparations for the previous four years, and so we are able to deal with the three challenges mentioned. Thank you.
It seems that, there are no questions as of now, so if you have any questions, please log into Zoom and raise your hand. Use the Raise Your Hand button.
Next question is from J.P. Morgan, Jihyun Cho . Director Jo, you're on the line.
Thank you for the opportunity. In Q4, your provisioning, you said that you have preemptively reflected some for COVID-19 related programs, but compared to your peers, looking at the increase of provisioning, it seems a bit low. As I understand it, the government has been wanting to have more provisioning and for the different companies looking at macro assumptions or provision standards, I think they're different. Can you tell us the reason why? Can you tell us about your conservative assumptions and how you are provisioning in March? People are saying that COVID-19 related forbearance programs are going to be terminated. Can you tell us about your exposure, how you're going to manage them, and what kind of provisioning you have in store to prepare for the termination of those forbearance programs?
Thank you very much, Director Jo, for your program. We will soon answer your question, so please hold.
CFO Lee Taekyung will answer your question.
Thank you very much for your question. Compared to, I think, other banks, you have made a comparison and I think maybe you are talking about the NPL coverage ratio because compared to other banks, the market probably thinks that we have a lower NPL coverage ratio. NPL ratio is about provisioning against the delinquent or potentially delinquent loans. According to the types of collateral, the provisioning rates are different.
You need to look at the different types of provisioning because they are different in the types of loans involved. Secondly, regarding the termination of COVID-19 forbearance programs related to the termination of the financial support programs, among the balance for the installment repayment deferrals, there is about KRW 200 billion for high-risk loans, and for the high, the amount that is at most risk, it's about KRW 50 billion, and for interest, the deferral amount, it's about KRW 40 billion, and we believe that our credit exposure amount is about KRW 56 billion, so it's about KRW 100 billion in total. We had provisioned additional KRW 83 billion and, including our previous provisioning, we have more than KRW 140 billion of provisioning.
Even if there is a termination of the repayment deferral, forbearance program, even if there is some deterioration for the borrowers, we believe that we can sufficiently cover them. Going into more macros, in 2020, we had conservative provisioning, and in 2021, we mentioned that we have maintained them. We have actually lengthened the observation period to include the era when we had the defaults. We had made it possible for us to look at any further delinquent possibilities of borrowers. Apart from the KRW 83 billion that I aforementioned for individual borrowers, we had made preparations preemptively to prepare for their delinquencies if they occur. We believe that we are sufficiently covered with our provisioning.
However, when the interest rate goes up, generally in the economy, there could be a recession effect because there could be a more burden for wages, so when the PD gets higher or. Rather than PD getting higher or, when we have effect on borrower because of that overall effect on in the portfolio, looking at the amount of the provisioning increase, that is something that could occur in the economic cycle, so it might occur on a recurring level. We believe that the amount of provisioning might go up compared to similar periods.
I am the Group CRO, Bang Dong-kwon. Regarding assumption-related question that you have asked, for FLC, I think Forward-Looking Criteria is what you have asked.
Regarding stage three, there are individual assessments, but there is the collective assessment, I think that you have asked about, so I will base my answer on that. The portfolio default rate, PD rate, you can see that it is at the minimum, the lowest level. If we assume the risk components on a moving level as we had in the past, it is at a very low level. In order for us to be more conservative, we had changed the observation period to include the financial crisis eras. We have expanded those periods to actually remove the write back cost factors, and we have enough time for observation for RC, and we have made the provisions based on that. Thank you very much.
Thank you very much. The next question is from Yafei Tian from Citi. Please go ahead.
Hi. Thank you for giving me the opportunity. I have a few relatively quick ones. The first one is on the non-operating losses for this quarter. Maybe I missed at the very beginning what that is related to, please? And then secondly, thank you for the detailed discussion on the loan losses trajectory and asset quality. But assuming that there is no increase in delinquency and things remain status quo, does that mean that this year the loan losses could be lower than what we have seen the last two years in the absence of further top-ups? And thirdly, on the life business of Shinhan Life and Orange Life. Could you please give us an update on the integration between these two businesses and also your outlook on these businesses into IFRS 17 implementation, please? Thank you.
Thank you for the questions. Please hold. We will be right back with the answers.
Hello, I am Heo Young-taek, the Group CMO. I'd like to answer the question about the merger effect of Shinhan Life and Orange Life and the introduction of IFRS 17. Last year, Shinhan Life and Orange Life merged, and there was a lot of cost, one time, that incurred. There was ERP for the redundant workforce, KRW 56.6 billion. System integration, KRW 40 billion.
The reason why I'm mentioning the numbers is because in the long term, we have to look at the cost and how the merger is to produce return in the later years. We had reflected the cost last year. This year, the integration cost this year will be much lower. System integration, the amortization, we will have less burden. When the two entities merge, we have efficient workforce, and the effect will kick in this year. From a group level, we can share the customers, and we will have more business opportunities. Orange Life and Shinhan Life had each different business models. One had younger FCs, and Shinhan Life had a GA organization, and there will be synergy produced, and this will become visible starting this year.
According to insurance accounting methods, maybe the signs may not be visible accounting-wise. As for IFRS 17 introduction, the integrated Shinhan Life will have the industry's best capital base. This will serve as an opportunity to shift to profit-making. Starting in 2023, maybe Shinhan Life will be able to record a significant growth in profits. This will be a huge plus for the group as a whole. Thank you.
I would like to take on the next question about the asset quality and loan loss. I am the CRO, Bang Dong-kwon. As for asset quality, we have businesses that focus on sound assets. The asset quality is improving. Looking at the NPL ratios and the delinquency ratios, we see improvement continuously.
As for loan losses, as was mentioned by the CFO, there was 27 bps of credit cost ratio despite the COVID provisioning. We have done stress tests under different scenarios. It used to be 30 bps in 2019, and we expect the credit cost to be in the range. That's our plan. It's a bit higher than the 27 bps of last year, and that's what we are targeting. Thank you. Yes. As for the non-operating losses, we were a distributor of the investment product, and we recognized that as a non-operating loss, and that was KRW 192 billion. Additionally, IFRS 17 and its adoption and how it will affect the insurance business.
I know you're probably familiar with the accounting, but as for the integrated entity, we have a large portion of protection type or guaranteed type insurance company. Compared to the competitors, we believe that we would fare better, and the capital could undergo some changes, but we do have enough capital buffer. Relatively speaking, our business will be safer off. I know you know I do want to talk about numbers to be more specific, but I will be general, but everything will be positive for Shinhan Life and Orange Life. Thank you.
We are waiting for more questions. We have no questions that we can see as of now. If you have any questions, please log in to Zoom and press the Raise Hand button.
Hello, this is Michael Makdad from Morningstar. Can you hear me? I just have one question, which is about your overseas subsidiaries. You know, until the pandemic, I think your strong overseas units like Japan and Vietnam were a differentiation point for Shinhan compared to other Korean banks, you know, contributing 10%-15% of profit. Of course, during the pandemic, you know, Japan seems to be very strong, continuing, and I'm familiar with it, but, you know, Vietnam has been affected. I wanted to ask, what's the outlook for these overseas subsidiaries once the pandemic ends? Maybe 2022 is too early, but once the pandemic ends, how is Vietnam? And then also, any plans for other countries in ASEAN to make them bigger? That's my question. Thank you.
Thank you very much for your question. Please hold. We will soon answer your question. You will hear from our CMO, Heo Young-taeg.
Thank you for your question. I'm CMO Young Taeg Heo. As you are well aware, there was the lockdown in Vietnam, and we had a great challenges because of COVID-19. Despite this, globally, you can see net income. It was about $390 million, so it was very high. In Myanmar, Yangon, you can see we had some losses that we had preemptively recognized. In Vietnam, there was the card business and others, and we had preemptively recognized the provisions. It's about $25 million or so altogether. Excluding all this, compared to the previous year, even in the difficult situation of the previous year, there was about 25% increase that we would have seen. For this year, there are emerging countries and new countries, CLMV countries.
For the emerging markets, we believe that they will see no lockdown or they have announced lockdown opening or ending of lockdown. We believe that there will be a great recovery. What was repressed, suppressed, we believe will be great momentum for growth, in particular for Vietnam and Indonesia. We believe that in the global supply chain, they play very pivotal important roles, so we believe that we will see similar effects. For the advanced markets in the GIB area, we have been making inroads, so we have been doing some IB business, and we have seen some considerable results. Going forward, globally, including what we haven't been able to do for the past two years, we hope that this year will be a year where we can see some feasible results.
Apart from that, we are also looking at inorganic opportunities. Of course, it will depend on the government regulations and others, so we will need to wait and see. Regarding Shinhan's global business, compared to our peers, other financial holdings groups, we believe that Shinhan will see a very good year compared to other financial holdings groups in Korea.
Thank you very much for your answer.
The next question is from Jamie Jieun Park from Goldman Sachs. Please go ahead.
Hello. Thank you for giving me a chance. I have one question. This year and last year also, and even the year before, wealth management and product was, where a conservative stance was taken and booking was made conservatively. Is there a time when there will be a reversal, and what will be the scope? What will be the timeframe and the conditions for the reversal? Thank you very much.
Yes, the CFO, Lee Taekyung, will answer.
I think, related questions keep coming up. Specific numbers, this quarter, next year, we want to be clear with the numbers, but we are not at a place to do that.
There were some funds that were recovered, and some funds we did expect some losses, and we wanted to provision against the losses. According to the reports published, there seemed to be no issues. We did expect losses nonetheless, but we cannot provide you with the exact schedule and the conditions. Of course, the ballpark figure would be about KRW 100 billion, and it could be as long as five years if the dispute prolongs, and it could be as high as KRW 200 billion. We just gave you a range. It's not based on exact calculations. As of 2021 year-end, we did some assessments. There were private reconciliations.