A risk manager at a bank is speaking to a group of analysts about estimating credit losses in loan portfolios. The manager presents a scenario with a portfolio consisting of two loans and provides information about the loans as given below:

| | Loan 1 | Loan 2 |

|---|---|---|

| Amount borrowed | CNY 15 million | CNY 20 million |

| Probability of default | 2% | 2% |

| Recovery rate | 40% | 25% |

| Default correlation between Loan 1 and Loan 2 | 0.6 |

Assuming portfolio losses are binomially distributed, what is the estimate of the standard deviation of losses on the portfolio?