meritz Financial Group

First and foremost, on the occasion of the 14th Annual General Meeting, I extend my deepest gratitude to our shareholders for your unwavering support and interest in Meritz Financial Group.

Since the end of the COVID-19 pandemic, the global economy has been facing increased uncertainty due to the side effects of inflation and high-interest rates. While aggressive rate hikes by monetary authorities have stabilized inflation, the economy continues to suffer from high-interest rates and prices. Despite these challenging circumstances, Meritz Financial Group has achieved its best-ever performance.

Meritz Fire & Marine Insurance has recorded its highest-ever consolidated net profit of KRW 1.5672 trillion, driven by value-based management and profitability pursuit, even amidst the changed accounting standards. This marks a 25% increase year-over-year.

Meritz Securities recorded a consolidated net profit of KRW 590 billion, marking a decrease of 29% year-over-year, attributable to the deterioration of the domestic and international real estate finance markets and the impact of high-interest rates. Nonetheless, Meritz Securities remains the top-performing company in the securities industry.

Meritz Capital also experienced a decline in performance compared to the previous year, attributed to the downturn in capital and real estate finance markets. It recorded a consolidated net profit of KRW 217.6 billion, marking a decrease of 14% year-over-year.

Thanks to the outstanding performance of our major subsidiaries, Meritz Financial Group's consolidated assets increased by 14.9% year-over-year to KRW 102.2358 trillion, while consolidated equity grew by 18.2% year-over-year to KRW 10.972 trillion. The consolidated net profit amounted to KRW 2.1254 trillion, marking the highest-ever performance in its history.

In 2023, Meritz Financial Group completed its transition to a fully-holding company structure through comprehensive stock exchanges and finalized organizational restructuring for stable management succession, thus launching into a governance structure under the banner of One Meritz. The Group's competitiveness has been significantly strengthened through efficient capital allocation and streamlined decision-making. With the holding company in the center, our subsidiaries are united as One Team, striving to lead the market as a leading financial group again this year.

To achieve this, Meritz Financial Group will continue to pursue the following three initiatives:

• First, we will prioritize "Customers and Shareholders" and strive to become a respected financial group through continuous shareholder return policies.

  The value of one share held by a major shareholder is equal to that held by an individual shareholder. We will fearlessly embrace challenges by leveraging the operational efficiency secured through the group's governance restructuring to enhance customer and shareholder value. Additionally, we will execute transparent and proactive shareholder return policies, aiming to become a respected financial group.

• Second, we will continue to create the best performance through "Value-based management"

  The group has consistently adhered to value-based management principles over the past few years. We will continue to pursue strategies that elevate the real value of companies through precise market analysis, product development, and sales based on accurate pricing and investments. Value-based management is an indispensable principle for us. This year, we will once again strive to build the best financial group, with all subsidiaries achieving outstanding performance based on value-based management.

• Third, we will become a solid financial group through rigorous "Risk management and internal controls."

  We will continuously monitor the market, sensitively detect risks, and proactively respond to them. Additionally, regarding the significant internal control issues recently highlighted within financial institutions, we will ensure that employees maintain awareness and compliance in the best possible manner.

In 2024, all employees of Meritz Financial Group will operate under the umbrella of One Team centered around the holding company, aiming to enhance corporate value and satisfy both customers and shareholders. We sincerely request your continued trust and generous support.

We wish you and your family good health and happiness.

Thank you.

Chief Executive Officer
Kim Yong Beom