6-K 1 form_6k-20240814.htm 6-K 6-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

———————

FORM 6-K

———————

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the Month of July 2024

 

Commission File Number: 001-31798

 

———————

 

SHINHAN FINANCIAL GROUP CO., LTD.

(Translation of registrant's name into English)

 

———————

20, Sejong-daero 9-gil, Jung-gu, Seoul 04513, Korea
(Address of principal executive offices)

 

———————

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F Form 40-F

 

 

1

 

INDEX

 

No.

Description

1.

2.

Summary of 1H 2024 Business Report

Exhibit 99.1 Shinhan Financial Group Review Report for the 1H 2024 (Seperate)

3.

Exhibit 99.2 Shinhan Financial Group Review Report for the 1H 2024 (Consolidated)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

Summary of 1H 2024 Business Report

 

On August 14, 2024, Shinhan Financial Group (“SFG”) filed its 1H 2024 Business Report (the “Business Report”) with the Financial Services Commission of Korea and the Korea Exchange pursuant to the Financial Investment Services and Capital Market Act of Korea. This is the summary of the Business Report translated into English. Non-material or previously disclosed information are omitted or abridged.

The financial information in this report has been prepared in accordance with Korean International Financial Reporting Standards.

Table of Contents

1. Introduction of the Group

2. Business Results

3. Other Financial Information

4. Independent Auditor

5. Corporate Governance

6. Major Shareholders and Market Price Information of our Common Shares and ADRs

7. Directors, Executive Officers and Employees

8. Related Party Transactions

9. Material Information after the reporting period

 

3

1. Introduction of the Group

Company History (from Jan. 2010 through the reporting date)

 

▪
Jan. 2010: Shinhan Data System became a direct subsidiary of SFG
▪
Aug. 2010: Shinhan Macquarie Financial Advisory was disaffiliated from SFG
▪
Feb. 2011: Shinhan BNP Paribas Asset Management (Hong Kong) Ltd. became an indirect subsidiary of SFG
▪
Nov. 2011: Shinhan Bank Vietnam was merged with Shinhan Vina Bank
▪
Dec. 2011: Shinhan Savings Bank became a direct subsidiary of SFG
▪
Nov. 2012: Shinhan AITAS Co., Ltd. joined SFG as a direct subsidiary
▪
Jan. 2013: Yehanbyoul Savings Bank joined SFG as a direct subsidiary
▪
Apr. 2013: Shinhan Savings Bank merged with Yehanbyoul Savings Bank. As a result of the integration, Shinhan Savings Bank has been liquidated and Yehanbyoul Savings Bank now exists under the name of “Shinhan Savings Bank” as an existing legal entity
▪
Nov. 2014: LLP MFO Shinhan Finance (Kazakhstan) became an indirect subsidiary of SFG
▪
Jul. 2015: Shinhan Securities Vietnam Co., Ltd became an indirect subsidiary of SFG
▪
Oct. 2015: Banco Shinhan de Mexico became an indirect subsidiary of SFG
▪
Nov. 2015: PT Bank Shinhan Indonesia became an indirect subsidiary of SFG
▪
Dec. 2015: PT. Shinhan Indo Finance became an indirect subsidiary of SFG
▪
Dec. 2015: PT Centratama Nasional Bank became an indirect subsidiary of SFG
▪
Jun. 2016: Shinhan Microfinance Co., Ltd. became an indirect subsidiary of SFG
▪
Jul. 2016: PT Shinhan Securities Indonesia became an indirect subsidiary of SFG
▪
Dec. 2016: Launched new integrated PT Bank Shinhan Indonesia
▪
Oct. 2017: Established Shinhan REITs(Real Estate Investment Trusts) Management Co.,Ltd. as SFG subsidiary
▪
Dec. 2017: Shinhan K REITs became an indirect subsidiary of SFG
▪
Apr. 2018: Shinhan Alpha REITs (formerly known as Shinhan K REITs) was disaffiliated from SFG’s indirect subsidiary due to a change in the largest shareholder
▪
May 2018: GX SHINHAN INTERVEST 1st PEF became an indirect subsidiary of SFG
▪
May 2018: Shinhan DS Vietnam became an indirect subsidiary of SFG
▪
Sep. 2018: Shinhan Alpha Yongsan REIT became an indirect subsidiary of SFG
▪
Oct. 2018: SFG entered into a share purchase agreement with Asia Trust Co., Ltd. for the 100% acquisition.
▪
Feb. 2019: Orange Life Insurance, Ltd. joined SFG as a direct subsidiary (acquisition from majority shareholders)
▪
May 2019: Asia Trust. Co., Ltd. joined SFG as a direct subsidiary
▪
Aug. 2019: Shinhan AI Co., Ltd. incorporated and joined as a direct subsidiary
▪
Jan. 2020: Orange Life Insurance, Ltd. became a wholly-owned subsidiary (acquisition of remaining interests by effecting a comprehensive stock exchange)
▪
Sep. 2020: Neoplux Co., Ltd. joined SFG as a direct subsidiary (acquisition from majority shareholder)
▪
Dec. 2020: SFG acquired the remaining interests in Neoplux by effecting a small-scale stock exchange and hence Neoplux has become our wholly owned subsidiary and was renamed to Shinhan Venture Investment.
▪
Jan. 2021: SFG acquired the remaining 35% interests in Shinhan BNPP Asset Management and it became a wholly-owned subsidiary. Shinhan BNPP Asset Management changed its legal name to Shinhan Asset Management.
▪
May. 2021: Shinhan Naotic No. 1 Private Equity Joint Venture joined SFG as a direct subsidiary as a sub-subsidiary.
▪
May. 2021: JS Shinhan Private Equity Limited joined SFG as a direct subsidiary as a sub-subsidiary.

4

▪
July. 2021: Integrated Shinhan Life Insurance Co., Ltd launched after the merger between Shinhan Life Insurance and Orange Life Insurance, wholly-owned subsidiaries of Shinhan Financial Group.
▪
Jan. 2022: Shinhan Asset Management Co., Ltd. and Shinhan Alternative Investment Management Inc. have merged to form a holding company named Shinhan Asset Management Co., Ltd.
▪
Jun. 2022: SFC acquired 94.54% of the total issued shares of Shinhan EZ General Insurance, Ltd (formerly, BNP Paribas Cardif Life Insurance Ltd.) after the Financial Services Commission approved the incorporation of subsidiary
▪
July 2022 Shinhan Credit Information Co., Ltd. (hereinafter “Shinhan Credit Information”) has been dissolved from the list of group’s direct subsidiaries and became an indirect subsidiary of SFG.
▪
Oct 2022 Shinhan Financial Investment Securities Co., Ltd. has changed its legal name to Shinhan Securities Co., Ltd.
▪
April 2023 AITAS Co., Ltd has changed its legal name to Shinhan Fund Partners.
▪
July 2024 Shinhan AI has been dissolved from the list of group’s direct subsidiaries

 

5

Overview of the Business Group

 

Principal(Direct) Subsidiaries under Korean Law (as of the reporting date)

Subsidiaries

 

Ownership by SFG

Shinhan Bank

 

100%

Shinhan Card

 

100%

Shinhan Securities

 

100%

Shinhan Life Insurance 1)

 

100%

Shinhan Capital

 

100%

Shinhan Asset Management 2)

 

100%

Jeju Bank 3)

 

75.3%

Shinhan Savings Bank 4)

 

100%

Shinhan Asset Trust 5)

 

100%

Shinhan DS

 

100%

Shinhan Fund Partners 6)

 

99.8%

Shinhan REITs Management

 

100%

Shinhan Venture Investrment 7)

 

100%

Shinhan EZ General Insurance 8)

 

85.1%

SHC Management

 

100%
1)
Shinhan Life Insurance and Orange Life Insurance merged on July 1st, 2021 and became Shinhan Life Insurance Co., Ltd
2)
On January 15, SFG acquired remaining 35% interests in Shinhan BNP Paribas Asset Management and it became our wholly-owned subsidiary (changed its legal name to Shinhan Asset Management)
3)
Jeju Bank is currently listed on the Korea Exchange.
4)
On January 30, 2013, Yehanbyoul Savings Bank joined SFG as a direct subsidiary. On April 1, 2013, Shinhan Savings Bank merged with Yehanbyoul Savings Bank, both of which were direct subsidiaries of Shinhan Financial Group. As a result of the integration of the two savings banks, the previous Shinhan Savings Bank has been liquidated and is thus no longer a subsidiary of Shinhan Financial Group and instead, Yehanbyoul Savings Bank now exists under the name of “Shinhan Savings Bank” as an existing legal entity constituting a member of Shinhan Financial Group.
5)
The Group has acquired remaining shares of Asia Trust Co., Ltd during the period, and Asia Trust Co., Ltd became its wholly-owned subsidiary. Asia Trust Co., Ltd has changed its name to Shinhan Asset Trust Co., Ltd.
6)
On November 30, 2012, Shinhan AITAS Co., Ltd. joined SFG as a direct subsidiary. Prior to November 30, 2012, Shinhan AITAS was an indirect subsidiary of SFG under Shinhan Bank, a wholly-owned bank subsidiary of SFG. On April 03, 2023, Shinhan AITAS changed its legal name to Shinhan Fund Partners.
7)
On January 11, Neoplux changed its legal name to Shinhan Venture Investment.
8)
On June 30, 2022, SFG acquired remaining 94.54% stake from BNP Paribas Cardiff and it became our wholly-owned subsidiary (changed its legal name to Shinhan EZ General Insurance) On November 03,2022, KT and Douzone Bizon acquired 9.9% and 5% shares of Shinhan EZ General Insurance, respectively.
9)
On July 2024, Shinhan AI has been dissolved from the list of group’s direct subsidiaries

 

 

 

 

 

 

 

 

 

 

6

Indirect subsidiaries held through direct subsidiaries (as of the reporting date)

Direct Subsidiaries

 

Indirect Subsidiaries

 

Ownership by the Parent

Shinhan Bank

 

Shinhan Bank America

 

100%

 

Shinhan Bank Japan 1)

 

100%

 

Shinhan Bank Europe

 

100%

 

Shinhan Bank Cambodia

 

97.5%

 

Shinhan Bank Kazakhstan

 

100%

 

Shinhan Bank China Limited

 

100%

 

Shinhan Bank Canada

 

100%

 

Shinhan Bank Vietnam

 

100%

 

Banco Shinhan de Mexico

 

99.9%

 

PT Bank Shinhan Indonesia

 

99.0%

Shinhan Card

 

LLP MFO Shinhan Finance

 

75%

 

PT. Shinhan Indo Finance

 

76%

 

Shinhan Microfinance Co., Ltd.

 

100%

 

Shinhan Vietnam Finance Co. Ltd.

 

100%

 

 

Shinhan Credit Information Co.Ltd

 

100%

Shinhan Securities

 

Shinhan Securities New York

 

100%

 

Shinhan Securities Hong Kong

 

100%

 

Shinhan Securities Vietnam Co., Ltd

 

100%

 

PT Shinhan Securities Indonesia 2)

 

99%

 

 

Shinhan Smilegate Global PEF1

 

10.0%

 

 

Shinhan SKS PEF3)

 

9.59%

 

 

Shinhan Praxis K-Growth Global Private Equity Fund 4)

 

14.1%

Shinhan Life Insurance

 

Shinhan Financial Plus

 

100%

 

 

Shinhan Life Care Co., Ltd.

 

100%

 

 

Shinhan Life Insurance Vietnam Limited Liability Company

 

100%

Shinhan Capital

 

Shinhan-We Venture Debt Fund

 

34.5%

Shinhan Asset Management

 

Shinhan Asset MGT HK, Limited

 

100%

 

 

Shinhan Private Equity Fund 2nd

 

66.3%

 

 

JS Shinhan Private Equity Fund

 

0.06%

 

 

Shinhan Nautic Private Equity Fund I

 

9.23%

Shinhan DS

 

Shinhan DS Vietnam Co. Limited

 

100%

Shinhan Venture Investment

 

Neoplux 3rd PEF

 

10.0%

1) SBJ DNX: SBJ Bank own 100% in the aggregate.

2) PT Shinhan Asset Management Indonesia : PT Shinhan Securities Indonesia own 75% in the aggregate.

 

 

 

 

 

 

 

 

 

7

Credit Ratings (as of June 30, 2024)

Date

Types of Issuance

Credit

Rating

Rating Company

(Rating Range)

2024.01.19

Write-down Contingent

Capital Securities

AA-

Korea Rating(AAA~D) / KIS Rating(AAA~D) /

NICE Investors Service(AAA~D)

2024.01.29

Debentures

AAA

Korea Rating(AAA~D) / KIS Rating(AAA~D) /

NICE Investors Service(AAA~D)

2024.03.22

Debentures

AAA

Korea Rating(AAA~D) / KIS Rating(AAA~D) /

NICE Investors Service(AAA~D)

2024.04.25

Debentures

AAA

Korea Rating(AAA~D) / KIS Rating(AAA~D) /

NICE Investors Service(AAA~D)

2024.05.21

Debentures

AAA

Korea Rating(AAA~D) / KIS Rating(AAA~D) /

NICE Investors Service(AAA~D)

2024.05.21

Commercial Paper

A1

Korea Rating(A1~D)

2024.05.21

Electronic

Short-term Bond

A1

Korea Rating(A1~D)

2024.06.24

Commercial Paper

A1

KIS Rating (A1~D)

2024.06.24

Electronic

Short-term Bond

A1

KIS Rating (A1~D)

2024.06.28

Commercial Paper

A1

NICE Investors Service (A1~D)

2024.06.28

Electronic

Short-term Bond

A1

NICE Investors Service (A1~D)

 

 

Capital Structure

 

Number of Shares (as of June 30, 2024)

Types of Shares

 

Number of Shares

Number of shares authorized

for issuance

 

1,000,000,000

Number of common shares issued (1)

 

509,393,214

Number of preferred shares issued

 

-

Total outstanding shares

 

509,393,214

Treasury stocks (2)

 

3,175,154

Total outstanding shares
with voting rights

 

506,218,060

1) SFG issued 8,232,906 shares of common stock in relation to a comprehensive stock exchange between SFG and Orange Life Insurance on January 28, 2020. On September 29, 2020, SFG had a paid-in capital increase and issued 39,130,000 common shares (third-party allocation). On December 30, 2020, SFG issued 72,719 shares of common stock in relation to a small-scale stock exchange between SFG and Neoplux.

2) SFG acquired 1 share of treasury stocks through the acquisition of fractional shares as a result of a stock exchange between SFG and Orange Life Insurance on January 28, 2020 and between SFG and Neoplux on December 30, 2020 and 3,175,153 shares through the acquisition of treasury shares as a result of trust contract for acquisition of treasury stock signed on April 26, 2024.

3) SFG canceled treasury shares of 5,035,658 on June 01, 2020, 3,665,423 on 25 April, 2022, 4,149,252 on 23 November, 2022, 3,676,470 on 28 March,2023, 4,243,281 on 16 June 2023, 2,842,929 on 31, August 2023, and 2,744,718 on 27 December 2023, and 3,366,257 on 22 March 2024 after completion of share repurchase program. Capital does not change due to the cancellation of acquired stocks within the range of dividend payable income.

4) 17,482,000 shares of Convertible Preferred Shares had automatically converted to common shares on 1 May 2023 upon the completion of conversion claim period.

 

 

 

8

Dividends

 

 

(KRW million)

Items

1H 2024

(Jan. 01 ~ Jun. 30)

FY 2023

(Jan. 01 ~ Dec. 31)

FY 2022

(Jan. 01 ~ Dec. 31)

Par value per share (Won)

5,000

5,000

5,000

(Consolidated) Net Income

2,747,011

4,868,035

4,665,643

(Separate) Net Income

1,736,881

1,671,011

1,249,251

(Consolidated Earnings per share (Won)

5,219

8,048

8,498

Total Cash dividends

548,427

1,086,317

1,092,813

Total stock dividends

-

-

-

(Consolidated) Cash dividend payout ratio (%)

19.96

24.87

23.42

Cash dividend yield (%) – common shares

2.28

4.78

5.49

Cash dividend yield (%) – preferred shares

-

-

-

Stock dividend yield (%)

-

-

-

Cash dividend per share (Won)

1,080

2,100

2,065

Stock dividend per share

-

-

-

1) Cash dividend payout ratio on a common share basis for FY 2022 is 22.65%, and FY 2023 is 24.66%.

2) FY2022 has been restated retrospectively to reflect newly applied K-IFRS no.1117 ‘Insurance Contract’ from FY2023.

 

9

2. Business Results

 

Operating Results

 

 

(KRW billion)

 

1H 2024

(Jan. 01 ~ Jun. 30)

FY 2023

(Jan. 01 ~ Dec. 31)

FY 2022

(Jan. 01 ~ Dec. 31)

Net interest income

5,638

 10,818

 10,597

Interest income

14,435

 27,579

 20,092

Interest expense

8,798

 16,761

 9,496

Net fees and commission income

1,419

 2,647

 2,414

Fees and commission income

2,186

 4,175

 3,884

Fees and commission expense

767

 1,528

 1,471

Net insurance income

301

 598

 1,849

Insurance income

1,584

 3,088

 3,629

Insurance expense

1,283

 2,490

 1,780

Net gain(loss) on securities and FX trading/derivatives

1,540

 2,485

-381

Provision for credit loss and impairment loss

-988

-2,251

-1,318

Net other operating income(expense)

-1,146

-2,300

-1,616

General and administrative expenses

2,844

 5,895

 5,644

Net operating income

3,921

 6,101

 5,906

Equity method income

-15

 125

 122

Other non-operating income(expense), net

-244

-261

 339

Profit before income taxes

3,662

 5,965

 6,367

Income tax expense

863

 1,487

 1,611

Consolidated net profit

2,799

 4,478

 4,756

Net profit attributable to equity holders of the Group

2,747

 4,368

 4,666

Net profit attributable to non-controlling interest

52

 110

90

1) Some of the totals may not sum due to rounding..

2) FY 2022 has been restated retrospectively to reflect newly applied K-IFRS no.1117 ‘Insurance Contract’ from FY2023.

 

10

 

Source and Use of Funds

Consolidated Basis

(KRW billion, %)

1H 2024

FY 2023

FY 2022

Jan. 01 ~ Jun. 30

Jan. 01 ~ Dec. 31

Jan. 01 ~ Dec. 31

Average

Balance1)

Propor-tions

(%)

Interest

Paid

Interest

Rate

(%)

Average

Balance1)

Propor-tions

(%)

Interest

Paid

Interest

Rate

(%)

Average

Balance1)

Propor-tions

(%)

Interest

Paid

Interest

Rate

(%)

Source

Deposits

393,366.2

55.4

5,009.6

2.56

383,064.0

56.3

9,790.8

2.56

374,433.2

57.3

4,642.7

1.24

Borrowings

56,391.6

7.9

984.2

3.51

38,083.3

5.6

1,291.3

3.39

34,678.8

5.3

669.3

1.93

Debt Securities Issued

84,170.3

11.9

1,637.9

3.91

76,797.0

11.3

2,735.4

3.56

78,719.1

12.1

1,901.5

2.42

Other Liabilities

118,920.4

16.8

-

-

126,335.2

18.6

-

-

113,498.0

17.4

-

-

Total Liabilities

652,848.5

92.0

-

-

624,279.5

91.8

-

-

601,329.1

92.1

-

-

Total Stockholder's Equity

56,896.6

8.0

-

-

55,597.4

8.2

-

-

51,819.8

7.9

-

-

Total Liabilities & SE

709,745.1

100.0

-

-

679,876.9

100.0

-

-

653,148.9

100.0

-

-

Use

Cash & Due from Banks

34,947.1

4.9

382.1

2.20

34,892.3

5.1

590.8

1.69

29,660.1

4.5

282.9

0.95

Loans

424,658.9

59.8

11,165.3

5.29

410,463.6

60.4

21,823.8

5.32

398,391.1

61.0

16,146.9

4.05

  Loans in KRW

331,579.4

46.7

8,201.3

4.97

317,950.0

46.8

16,093.6

5.06

308,197.4

47.2

11,760.0

3.82

  Loans in Foreign Currency

42,569.0

6.0

1,174.9

5.55

40,341.7

5.9

2,160.6

5.36

36,601.1

5.6

1,551.6

4.24

  Credit Card Accounts

27,710.3

3.9

1,111.9

8.07

27,965.4

4.1

2,162.1

7.73

27,229.1

4.2

1,979.3

7.27

  Others

22,800.2

3.2

677.2

5.97

24,206.5

3.6

1,407.5

5.81

26,363.5

4.0

856.0

3.25

FVOCI Financial Assets

87,039.0

12.3

1,342.8

3.10

84,680.8

12.5

2,341.9

2.77

86,538.1

13.2

1,837.8

2.12

AC Financial Assets

35,756.9

5.0

551.7

3.10

34,708.0

5.1

1,062.1

3.06

29,778.9

4.6

691.8

2.32

Other Assets

83,235.6

11.8

-

-

115,132.2

16.9

-

-

108,780.7

16.7

-

-

Total Assets

709,745.1

100.0

-

-

679,876.9

100.0

-

-

653,148.9

100.0

-

-

1)The “Average Balance” is the arithmetric mean of the ending balance of each quarter.

2) FY 2022 has been restated retrospectively to reflect newly applied K-IFRS no.1117 ‘Insurance Contract’ from FY2023.

11

 

3. Other Financial Information

 

1) Capital Adequacy

Consolidated BIS Ratio (Shinhan Financial Group)

 

 

 

(KRW billion)

 

Jun. 30, 2024

Dec. 31, 2023

Dec. 31, 2022

Aggregate Amount of Equity Capital (A)

52,567.6

50,192.5

46,981.8

Risk-Weighted Assets (B)

333,650.5

314,180.7

291,542.6

BIS Ratio (A/B)

15.76%

15.98%

16.11%

Note:

▪
Calculated in accordance with Basel III
▪
The figures as of June 30, 2024 are preliminary

 

 

 

Capital Adequacy Ratios (Subsidiaries)

 

 

 

 

(%)

Subsidiary

Capital Adequacy Ratio

Jun. 30,

2024

Dec. 31, 2023

Dec. 31, 2022

Shinhan Bank

BIS Capital Adequacy Ratio

18.0

18.1

17.8

Shinhan Card

Adjusted Equity Capital Ratio

19.7

19.7

18.6

Shinhan Securities

Net Capital Ratio

1,285.1

926.6

1,112.9

Shinhan Life Insurance

Risk Based Capital Ratio(K-ICS)

238.0

250.8

267.7

Shinhan Capital

Adjusted Equity Capital Ratio

17.9

19.0

16.4

Shinhan Asset Management

Equity Capital (KRW billion)

289.3

233.2

213.3

Minimum Capital Requirement (KRW billion)

48.5

49.1

46.8

Jeju Bank

BIS Capital Adequacy Ratio

18.0

17.5

16.4

Shinhan Savings Bank

BIS Capital Adequacy Ratio

18.6

14.4

12.4

Shinhan Asset Trust

Net Capital Ratio

413.7

926.8

1,107.7

Shinhan EZ Gen. Insurance

Risk Based Capital Ratio(K-ICS)

376.2

469.4

620.8

Notes :

▪
Basel III was applied in calculating Shinhan Bank and Jeju Bank’s BIS Capital Adequacy Ratio.
▪
Shinhan EZ General Insurance became SFG’s wholly-owned subsidiary on June 30, 2022.
▪
The figures as of June 30, 2024 are preliminary
▪
Shinhan Life and Shinhan EZ General Insurance upgraded its insurance risk measurement system in anticipation of a new regulatory solvency regime for insurance companies, the Korean-Insurance Capital Standard (the “K-ICS”). As of the date of submission of the 2Q report in 2024, the above payment capacity ratio is preliminary calculated, and the finally confirmed ratio will be amended and disclosed in Shinhan Life's 1H 2024 business report and Shinhan EZ General Insurance's 1H2024 management disclosure.
▪

 

 

 

 

 

 

 

 

2) Liquidity

Won Liquidity Ratio

 

 

 

(KRW billion, %)

Company

Jun. 30, 2024

Dec. 31, 2023

Dec. 31, 2022

Won Assets

Won Assets

Won Liquidity Ratio(%)

Won Assets

Won Liabilities

Won Liquidity Ratio(%)

Won Liabilities

Won Liabilities

Won Liquidity Ratio(%)

Shinhan Financial Group

1,790.2

277.5

645.2

721.2

235.9

305.8

875.4

131.7

664.5

Shinhan Card

22,008.5

6,536.6

336.7

21,732.0

5,970.0

364.0

21,102.5

5,863.2

359.9

Shinhan Securities

25,484.6

20,224.9

126.0

25,804.2

21,888.6

117.9

19,341.7

13,867.7

139.5

Shinhan Life Insurance

20,474.6

1,393.3

1,469.5

21,863.8

1,479.1

1,478.2

21,822.0

1,616.3

1,350.1

Shinhan Capital

3,087.9

989.0

312.2

2,760.2

1,064.9

259.2

2,949.0

722.3

408.3

Shinhan Savings Bank

610.9

411.8

148.4

721.7

602.2

119.8

684.1

576.2

118.7

Shinhan Asset Trust

146.7

9.8

1,497.9

185.2

21.2

872.0

314.3

27.3

1,151.2

Shinhan AI

31.9

0.1

484.2

28.0

0.9

30.5

30.3

0.8

36.9

Shinhan EZ General Insurance

123.6

4.8

2,579.5

135.3

2.0

6,788.2

83.5

1.7

4,918.8

Notes:

▪
Shinhan Financial Group: Due within 1 month
▪
Shinhan Life Insurance and Orange Life Insurance: (Won assets due within 3 months /3 months average of Claim payments )*100
▪
Shinhan Card, Shinhan Securities, Shinhan Capital, and Shinhan Savings Bank : Due within 3 months
▪
Liquidity Ratio for Shinhan Bank and Jeju Bank have been replaced by Liquidity Coverage Ratio from Mar 31, 2015

to reflect the recent amendments to detailed regulations on supervision of banking business.

 

Liquidity Coverage Ratio

 

 

 

(KRW billion, %)

Company

Jun. 30, 2024

Dec. 31, 2023

Dec. 31, 2022

High Quality Liquid Assets

Net Cash Outflows

Liquidity Coverage Ratio(%)*

High Quality Liquid Assets

Net Cash Outflows

Liquidity Coverage Ratio(%)

High Quality Liquid Assets

Net Cash Outflows

Liquidity Coverage Ratio(%)

Shinhan Bank

86,717.5

84,480.4

102.6

85,172.4

85,155.4

100.0

82,709.0

83,705.6

98.8

Jeju Bank

985.0

706.0

139.5

1,020.7

813.0

125.6

915.4

823.3

111.8

Notes:

▪
Liquidity Coverage Ratios are the arithmetic mean of daily LCRs.
▪
Financial Services Commission temporarily eased the regulatory minimum from 100.0% to 85.0% by end of June, to 90.0% by end of September 2022, to 92.5% by end of June, 2023. After gradually raising the ratio from July 2023 onward, the plan is to increase it to 97.5% by july 2024 as part of the phased normalization process.

 

 

 

 

 

 

 

 

 

 

 

Foreign Currency (FC) Liquidity Ratio

 

 

 

 

(USD millions, %)

Company

Jun. 30, 2024

Dec. 31, 2023

Dec. 31, 2022

FC

Assets

FC Liabilities

FC Liquidity Ratio(%)

FC

Assets

FC Liabilities

FC Liquidity Ratio(%)

FC

Assets

FC

Liabilities

FC Liquidity Ratio(%)

Shinhan Financial Group

41.6

20.7

200.8

33.3

20.8

160.2

65.0

9.9

655.7

Shinhan Life Insurance

1,956.5

215.8

906.5

2,598.7

174.4

1,490.1

1,123.3

173.7

646.9

Shinhan Securities

9,964.4

8,440.2

118.1

10,318.0

9,117.0

113.2

6,985.2

6,355.4

109.9

Shinhan Capital

63.6

0.6

11,431.5

55.6

0.4

13,556.1

79.6

0.4

18,859.5

Jeju Bank

16.0

14.0

114.1

13.4

2.2

605.7

13.8

14.3

96.9

Notes :

▪
Foreign currency liquidity ratios are computed with assets and liabilities due within 3 months.
▪
Shinhan Bank’s foreign currency liquidity ratio has been replaced by Foreign Liquidity Coverage Ratio.

Foreign Currency (FC) Liquidity Coverage Ratio

 

 

 

(USD millions, %)

Company

2024 1H

2023 4Q

2022 4Q

Jan. 1 ~ Jun. 30

Jan. 1 ~ Dec. 31

Jan. 1 ~ Dec. 31

Shinhan Bank

150.4

157.8

141.1

 

Notes :

▪
Financial Services Commission temporarily eased the regulatory minimum from 80% to 70% by end of June 2022, in order to support the capacity of banks to provide funding to businesses affected by COVID-19. Starting from September 2022, the regulation will be reinstated to 80.0%.
▪
Foreign Currency Liquidity Coverage Ratio is calculated by quarterly average.

 

 

 

3) Asset Quality

SFG Consolidated Basis

(KRW billion)

 

Jun. 30, 2024

Dec. 31, 2023

Dec. 31, 2022

Total Loans

436,851.2

413,664.8

412,421.1

Substandard & Below

3,419.2

2,668.4

2,122.9

Substandard & Below Ratio

0.78%

0.65%

0.51%

Non-Performing Loans

2,730.6

2,176.6

1,800.8

NPL Ratio

0.63%

0.53%

0.44%

Substandard & Below Coverage Ratio

133.68%

165.61%

176.99%

Loan Loss Allowance

4,570.8

4,419.1

3,757.4

Substandard & Below Loans

3,419.2

2,668.4

2,122.9

Separate Basis

(%)

Jun. 30 2024

Dec. 31 2023

Dec. 31 2022

Substandard & Below Ratio

NPL Ratio

Substandard & Below Coverage Ratio

Substandard & Below Ratio

NPL Ratio

Substandard & Below Coverage Ratio

Substandard & Below Ratio

NPL Ratio

Substandard & Below Coverage Ratio 1)

Shinhan Financial Group

-

-

-

-

-

-

-

-

-

Shinhan Bank

0.25

0.19

206

0.24

0.19

233

0.25

0.20

202

Shinhan Card

1.38

0.73

236

1.31

0.70

248

0.92

0.43

315

Shinhan Securites

15.19

15.19

69

12.86

12.86

62

10.16

10.16

57

Shinhan Life Insurance

0.28

0.28

421

0.21

0.21

510

0.06

0.06

357

Shinhan Capital

6.09

3.69

57

1.74

0.74

193

0.93

0.72

118

Jeju Bank

1.42

1.29

96

0.98

0.87

120

0.55

0.46

128

Shinhan Savings Bank

7.75

11.31

61

4.38

9.10

93

2.45

4.27

143

Shinhan Asset Trust

67.81

36.81

51

64.66

64.66

15

23.07

23.07

84

 

 

 

4) Debt to Equity Ratios

Shinhan Financial Group (Separate Basis)

(KRW billion)

 

Jun. 30, 2024

Dec. 31, 2023

Dec. 31, 2022

Debt

11,228.1

11,190.4

10,779.8

Equity

27,103.6

26,099.1

26,676.5

Debt to Equity Ratio

41.43%

42.88%

40.41%

 

Twenty Largest Exposures by Borrower

(KRW billion)

As of Jun. 30, 2024

Consolidated basis

Loans in Won

Loans in Foreign Currency

Securities

Guarantees and Acceptances

Others

Total Exposures

Samsung Electronics

-

2,638.8

1.6

-

-

2,640.4

Woori Bank

1,633.7

-

606.6

-

-

2,240.2

Nong Hyup Bank

499.3

55.5

1,548.4

28.3

-

2,131.5

KB Bank

995.6

-

662.9

17.5

-

1,676.0

LG Display

736.2

694.6

138.1

97.0

-

1,665.9

KEB Hana Bank

900.4

24.2

642.3

37.0

-

1,603.9

Korea Electric Power Corporation

0.3

-

1,515.0

76.6

-

1,591.9

HD Hyundai Heavy Industries Co.,Ltd

0.0

9.7

0.2

1,527.2

-

1,537.1

S-Oil

500.7

827.2

117.0

14.9

-

1,459.8

Mirae Asset Securities

1,110.3

-

292.4

-

-

1,402.7

SK on Co.,Ltd

201.7

904.4

235.8

-

-

1,341.8

National Agriculture Cooperative Federation

79.0

-

1,180.2

-

-

1,259.1

Hotel Lotte

101.4

27.8

541.9

450.0

-

1,121.1

Korea Investment & Securities

830.3

-

227.8

27.8

-

1,085.9

Hyundai Card

33.3

65.4

903.2

65.5

-

1,067.5

Hyundai Steel

447.0

161.8

434.5

7.9

0.0

1,051.3

KT

100.1

-

905.2

44.9

-

1,050.2

LIG NEX1 Co.,Ltd

2.4

-

39.8

1,007.3

-

1,049.5

Samsung Heavy Industries Co.,Ltd

-

-

-

1,032.7

-

1,032.7

SBC PFV

920.0

-

22.5

-

-

942.5

Total

9,091.7

5,409.4

10,015.2

4,434.7

0.0

28,951.0

Note) Some of the totals may not sum due to rounding

 

 

 

 

 

 

Exposure to ten Main Debtor Groups

(KRW billion)

As of Jun. 30, 2024

Consolidated basis

Loans in Won

Loans in Foreign Currency

Securities

Guarantees and Acceptances

Others

Total

Exposures

Samsung

175.5

3,509.0

1,542.3

1,753.9

0.0

6,980.6

SK

1,620.8

1,237.3

2,417.5

973.5

0.0

6,249.0

Lotte

1,827.4

390.5

2,337.5

872.3

0.0

5,427.8

Hyundai Motor Company

1,174.2

1,056.2

2,250.1

482.9

9.0

4,972.4

Hyundai Heavy Industries

505.2

92.6

148.7

3,070.1

-

3,816.6

LG

1,131.8

826.6

1,092.1

266.7

-

3,317.2

Hanwha

1,051.1

406.0

815.6

829.0

0.0

3,101.8

LS

235.8

917.5

179.2

951.9

0.3

2,284.7

Shinsegae

872.8

44.5

540.0

155.7

-

1,613.1

KT

179.7

127.9

1,040.8

173.4

-

1,521.8

Total

8,774.3

8,608.2

12,363.7

9,529.4

9.3

39,284.9

Note) Some of the totals may not sum due to rounding

 

 

Top Twenty Non-Performing Loans

(KRW billion)

Borrower

Industry

Gross Principal Outstanding

Substandard & Below

Allowance for Loan Losses

A

Other financial service activities n.e.c.

145.2

145.2

35.2

B

Other financial service activities n.e.c.

125.5

125.5

125.5

C

Other financial service activities n.e.c.

64.2

64.2

64.2

D

Other financial service activities n.e.c.

56.5

56.5

56.5

E

Other financial service activities n.e.c.

41.7

41.7

1.0

F

Other financial service activities n.e.c.

40.4

40.4

21.5

G

Other financial service activities n.e.c.

27.8

27.8

27.8

H

Other financial service activities n.e.c.

27.1

27.1

1.1

I

Development and subdividing of other real estate

22.4

22.4

6.7

J

Other financial investment businesses

21.8

21.8

20.8

K

Other financial investment businesses

20.0

20.0

15.4

L

Renting of non-residential buildings

20.0

20.0

0.2

M

Development and subdividing of residential buildings

20.0

20.0

1.1

N

Management of residential real estate

20.0

20.0

0.6

O

Development and subdividing of residential buildings

20.0

20.0

2.1

P

Manufacture of sections for ships

21.9

19.9

20.2

Q

Other financial service activities n.e.c.

19.4

19.4

2.4

R

Other financial service activities n.e.c.

19.0

19.0

17.6

S

Other financial service activities n.e.c.

17.3

17.3

10.3

T

Other non-residential building construction

17.2

17.2

1.4

Total

767.3

767.3

431.6

Notes :

▪
Consolidated basis as of Jun. 30, 2024
▪
Some of the totals may not sum due to rounding.

 

 

 

4. Independent Auditor

Audit Opinion for the last 3 years

 

1H 2024

FY 2023

FY 2022

Independent Auditor

KPMG Samjong

Accounting Corp.

KPMG Samjong

Accounting Corp.

PwC Samil

Accounting Corp.

Audit Opinion

Unqualified

Unqualified

Unqualified

 

 

Compensation to the Independent Auditor for Audit and Review Services

 

The following is a description of the fees for audit and review services performed by our independent auditor for the last three years in connection with our financial statements preparation.

 

Year

Auditor

Payment 1) 
(KRW mil.)

Details

Working hours

1H 2024

KPMG Samjong

Accounting Corp.

615

(quarterly basis)

Review/Audit of Financial Statements

3,717

Hours

KPMG Samjong

Accounting Corp.

68

(quarterly basis)

K-IFRS Report Package Audit for Shinhan Savings Bank

270

Hours

FY 2023

KPMG Samjong

Accounting Corp.

1,187

(annualized basis)

Review/Audit of Financial Statements

11,311

Hours

KPMG Samjong

Accounting Corp.

133

(annualized basis)

K-IFRS Report Package Audit for Shinhan Savings Bank

1,207

Hours

FY 2022

PwC Samil

Accounting Corp.

987

(annualized basis)

Review/Audit of Financial Statements

9,235

Hours

PwC Samil

Accounting Corp.

130

(annualized basis)

K-IFRS Report Package Audit for Shinhan Savings Bank

1,004

Hours

1) Excluding value-added taxes.

* In addition to above mentioned description of fees for audit and review services, also provided services related to US listing and ICOFR audit in accordance with the standards of the PCAOB which we agreed to pay KRW 2,351 million(excluding value-added taxes) for FY2024.

 

 

 

5. Corporate Governance

Board of Directors and committees of the Board of Directors

Our board of directors, which currently consists of one executive director, one non-executive director and 9 outside directors, has the ultimate responsibility for the management of our affairs.

Our board of directors are appointed in accordance with the Act on Corporate Governance of Financial Companies and related regulations. See “7. Directors, Executive Officers and Employees” for information about the member of board of directors.

Our board of directors meets on a regular basis to discuss and resolve material corporate matters. Additional extraordinary meetings may also be convened at the request of the chairman and chief executive officer or a director designated by the board.

 

• Committees of the Board of Directors

We currently have seven management committees that serve under the board:

-
the Risk Management Committee;
-
the Audit Committee;
-
the Remuneration Committee;
-
the Committee for Recommending Candidates for Independent Directors and Members of Audit Committee;
-
the Committee for Recommending Candidates for CEO;
-
the Environment, Social and Governance (ESG) Strategy Committee; and
-
the Committee for Subsidiary’s CEO Recommendation

Each committee member is appointed by the board of directors, except for members of the Audit Committee, who are elected at the general meeting of shareholders.

• Risk Management Committee

The Risk Management Committee currently consists of 3 outside directors, namely Song Seongjoo (Chair), Lee Yong Guk and Choi Young-Gwon. The committee oversees and makes determinations on all issues relating to our comprehensive risk management function. In order to ensure our stable financial condition and to maximize our profits, the committee monitors our overall risk exposure and reviews our compliance with risk policies and risk limits. In addition, the committee reviews risk and control strategies and policies, evaluates whether each risk is at an adequate level, establishes or abolishes risk management divisions, reviews risk-based capital allocations, and reviews the plans and evaluation of internal control. The committee holds regular meetings every quarter.

• Audit Committee

The Audit Committee currently consists of 3 outside directors, namely Kwak Su Keun (Chair), Yoon Jaewon, and Bae Hoon. The committee oversees our financial reporting and approves the appointment of and interaction with our independent auditors and our internal audit-related officers. The committee also reviews our financial information, audit examinations, key financial statement issues and the administration of our financial affairs by the board of directors. In connection with the general meetings of stockholders, the committee examines the agenda for, and financial statements and other reports to be submitted by, the board of directors for each general meeting of shareholders. The committee holds regular meetings every quarter.

• Remuneration Committee

The Remuneration Committee currently consists of 3 outside directors, namely Choi Young-Gwon (Chair), Kwak Su Keun, Kim Jo Seol. At least one-half of the members of this committee must be outside directors and currently all members of Remuneration Committee are outside directors. This committee is responsible for reviewing and approving the management’s evaluation and compensation programs. The committee meetings are called by the chairman of this committee, who must be an outside director.

• Committee for Recommending Candidates for Independent Directors and Members of Audit Committee

The Committee for recommending candidates for independent directors and members of audit committee currently consists of 4 outside directors, namely Choi Jae Boong (Chair), Kim Jo Seol, Song Seongjoo and Jin Hyun-duk. Members of this committee will be appointed by our board of directors only to the extent necessary to recommend and nominate candidates for our outside director positions, audit committee members and related matters. However, when the procedure for final recommendation of outside director and audit committee member candidates commences, all outside directors are called to participate in the committee and in this case, all outside directors are deemed as enrolled. The committee meetings

 

are called by the chairman of this committee, who must be an outside director. This committee is responsible and authorized for: (i) establishment, review and reinforcement of policies for outside director and audit committee member selection, (ii) recommendation of outside director and audit committee member candidates for approval at the general shareholders’ meeting and (iii) continual recruitment and screening of potential outside director candidates.

• Committee for Recommending Candidates for CEO

The Committee for recommending candidates for Chief Executive Officer (CEO) was established in March 2012 and currently consists of 5 directors, namely Yoon Jaewon (Chair), Jin Hyun-duk, Choi Young-Gwon, Bae Hoon and Choi Jae Boong. However, when the meeting for final selection of candidates for Chief Executive Officer, all outside directors are called to participate in the committee and in this case, all outside directors are deemed as enrolled. This committee is responsible for matters concerning the recommendation of candidates for the CEO including establishing and reviewing our management succession plan and its operation, setting and evaluating the qualifications and criteria for the CEO and CEO candidate pool and other matters necessary for improving our overall corporate governance structure. The chair of the committee must be an outside director, and the incumbent CEO may be restricted from participating and voting on matters related to the CEO selection.

• Environmental, Social and Governance (ESG) Strategy Committee

The ESG Strategy Committee was established in March 2015 and currently consists of 1 executive director, 3outside directors and 1 Non-executive director namely Lee Yong Guk (Chair), Kim Jo Seo, Choi Jae Boong, Jin Okdong and Jung Sang Hyuk. This committee is responsible for setting the corporate policy for sustainable management, corporate disclosure of sustainability report and discussing specific business agenda in relation to socially responsible management and other matters such as corporate strategy toward climate change.

• Committee for Subsidiary’s CEO Recommendation

The Committee for subsidiary’s CEO Recommendation was established in March 2021 and currently consists of 1 executive director and 4 outside directors, namely Jin Okdong (Chair), Kwak Su Keun, Bae Hoon, Yoon Jaewon and Lee Yong Guk. This committee is responsible for matters concerning the evaluation of subsidiary management leadership, establishment of subsidiary CEO qualifications, verification and recommendation of subsidiary CEO candidates and other matters deemed necessary by the committee.

 

 

6. Major Shareholder and Market Price Information of our Common Shares and ADRs

Major Shareholders1) of Shinhan Financial Group (as of Jun. 30, 2024)

Name

No. of Common Shares owned

Ownership%2)

National Pension Service

42,070,912

8.26%

BlackRock Fund Advisors3)

29,063,012

5.71%

Employee Stock Ownership Association4)

25,860,474

5.08%

1) Shareholders who own beneficial ownership of 5% or more (common share basis).

2) Ownership is based on the total number of common shares issued, 509,393,214 shares.

3) Based on the large equity ownership discloser by BlackRock Fund Advisors with the Financial Supervisory Service on Sep. 27, 2018.

4) The number of stocks owned by Employee Stock Ownership Association is the sum of 25,790,029 shares owned in the Employee Stock Ownership accounts and 70,445 shares in the ESOA account.

 

Common Shares Traded on the Korea Exchange

 

 

 

 

 

(KRW, number of shares)

 

Jan. 2024

Feb. 2024

Mar. 2024

Apr. 2024

May. 2024

Jun. 2024

Price per share

High

40,850

45,300

51,500

46,850

49,000

48,150

Low

36,350

41,350

44,050

40,550

45,800

45,400

Avg.

38,041

43,289

47,640

43,724

47,243

46,897

Trading Volume

26,658,216

57,765,714

80,366,313

40,458,781

26,878,635

21,090,411

Highest Daily Trading Volume

6,962,512

10,298,785

23,699,462

3,657,539

2,926,485

1,914,676

Lowest Daily Trading Volume

356,649

1,443,410

1,218,353

1,127,773

763,379

728,944

American Depositary Receipts traded on the New York Stock Exchange

 

 

 

 

 

(USD, number of shares)

 

Jan. 2024

Feb. 2024

Mar. 2024

Apr. 2024

May. 2024

Jun. 2024

Price per share

High

30.69

33.85

37.94

34.28

36.12

35.20

Low

27.23

31.15

32.61

29.33

33.62

33.21

Avg.

28.83

32.57

35.76

32.06

34.78

34.09

Monthly Trading Volume

3,089,730

2,533,291

2,924,340

3,466,803

1,834,047

1,922,675

Highest Daily Trading Volume

253,439

407,870

361,538

440,272

149,856

138,770

Lowest Daily Trading Volume

74,314

52,046

58,745

59,007

41,848

60,850

Note) 1 ADR = 1 Common Shares

 

 

 

 

 

 

7. Directors, Executive Officers and Employees

 

Directors and Executive Officers

1) Executive Director

Name

Date of Birth

Position

Executive

Director Since

Date Term Ends(1)

Jin Okdong

Feb. 21, 1961

Chief Executive Officer

March 23, 2023

March 2026

Note: The date on which the term will end will be the date of the general shareholders’ meeting in the relevant year.

 

Jin Okdong is our Chief Executive Officer. Prior to being elected to his current position on March 23, 2023, Mr. Jin served as the chief executive officer of Shinhan Bank from 2019 to 2023. Mr. Jin served as the deputy president of Shinhan Financial Group from 2017 to 2018, the deputy president of Shinhan Bank in 2017 and the chief executive officer of Shinhan Bank Japan from 2015 to 2016. Mr. Jin received a master’s degree in business administration from Chung Ang University.

 

2) Non-Executive and Outside Directors

Non-executive directors are directors who are not our employees and do not hold executive officer positions with us. Outside directors are non-executive directors who also satisfy the requirements set forth under the Financial Investment Services and Capital Markets Act to be independent of our major shareholders, affiliates and management. Our non-executive directors are selected based on the candidates’ talents and skills in diverse areas, such as law, finance, economics, management and accounting. Currently, 1 non-executive director and 9 outside directors are in office, all of whom were nominated by our board of directors and approved at a general meeting of shareholders.

Our non-executive and outside directors are as follows:

Name

Date of Birth

Position

Director Since

Date Term Ends(1)

Yoon Jaewon

Aug. 29, 1970

Outside Director

March 26, 2020

March 2025

Bae Hoon

Jun. 30, 1953

Outside Director

March 25, 2021

March 2025

Lee Yong Guk

May 11, 1964

Outside Director

March 25, 2021

March 2025

Kim Jo Seol

Dec. 5, 1957

Outside Director

March 24, 2022

March 2025

Choi Jae Boong

Feb. 18, 1965

Outside Director

March 25, 2021

March 2025

Kwak Su Keun

Aug. 16, 1953

Outside Director

March 25, 2021

March 2025

Jin Hyun-duk

Sep. 10, 1955

Outside Director

March 26, 2020

March 2025

Song Seongjoo

Mar. 26, 1971

Outside Director

March 26, 2024

March 2026

Choi Young-Gwon

Jul. 16, 1964

Outside Director

March 26, 2024

March 2026

Jung Sang Hyuk

Nov. 26, 1964

Non-Executive Director

March 23, 2023

March 2025

Note: The date on which each term will end will be the date of the general shareholders’ meeting in the relevant year.

 

Yoon Jaewon(Chair, Board of Director) has been our outside director since March 26, 2020. Ms. Yoon is currently a professor at Hongik University College of Business Administration and member of the committee for National Tax Service as well as the committee on national accounting policy of the Ministry of Economy and Finance and Korea Custom Service. Ms. Yoon previously served as a non-executive judge at the Tax Tribunal from 2013 to 2019. Ms. Yoon received a Ph.D in accounting from Korea University.

Bae Hoon has been our outside director since March 25, 2021. Mr. Bae is a Korean lawyer and Certified Public Accountant in Japan and currently serves as a representative attorney at Orbis Legal Profession Corporation. Mr. Bae received a master’s degree in business administration from Kobe University.

 

Lee Yong Guk has been our outside director since March 25, 2021. Mr. Lee is a clinical professor at Seoul National University, School of Law. Mr. Lee was previously an attorney at Cleary Gottlieb Steen & Hamilton LLP for 27 years. Mr. Lee received a J.D. from Harvard University Law School.

Kim Jo Seol has been newly appointed as our outside director since March 24, 2022. Ms. Kim is a Korean-Japanese professor who teaches economics at Osaka University of Commerce and economist with a high awareness of Northeast Asian economics. Ms Kim received a Ph.D. in economics from Osaka City University.

Choi Jae Boong has been our outside director since March 25, 2021. Mr. Choi currently serves as a professor of mechanical engineering at Sung Kyun Kwan University, College of Engineering and director of Human-centered Convergence Design BK(Brain Korea)21+ Project, which is a human resource development program initiated by the Government. Mr. Choi received a Ph.D. in mechanical engineering from University of Waterloo.

Kwak Su Keun has been our outside director since March 25, 2021. Mr. Kwak currently serves as an honorary professor of accounting at Seoul National University, Business School and chair of Corporate Governance Advisory Board at Korea Listed Companies Association. Mr. Kwak received a Ph.D in business administration from University of North Carolina Chapel Hill.

Jin Hyun-duk has been our outside director since March 26, 2020. Mr. Jin currently serves as the chief executive officer of Phoedra Co., Ltd. since 1988 and councilor of the Korea Educational Foundation. Mr. Jin was previously a professor at Sakushin-gakuin University and Utsunomiya University. Mr. Jin received a master’s degree in business administration from Keio Business School.

Song Seongjoo has been newly appointed as our outside director since March 26, 2024. Ms. Song currently

serves as a professor of statistics at Korea University since 2012 and Director of the Korea Risk Management Society. Ms. Song was previously an Advisory Professor, Economic Statistics Division, Bank of Korea. Ms. Song received a Ph. D in Statistics from University of Chicago.

Choi Young-Gwon has been newly appointed as our outside director since March 26, 2024. Mr. Choi currently serves as an Adjunct Professor, Graduate School of Business Administration, Sogang University and Adjunct Professor, College of Business Administration, Soongsil University. Mr. Choi was previously served the chief executive officer of Woori Asset Management in 2019-2023. Mr. Choi received a Ph.D. in Financial Management from Soongsil University.

Jung Sang Hyuk has been our non-executive director since March 23, 2023. Mr. Jung was the chief executive officer of Shinhan Bank and previously served as the deputy president of Shinhan Bank from 2020 to 2023 Mr. Jung received a bachelor’s degree in economics from Seoul National University.

Any director wishing to enter into a transaction with Shinhan Financial Group or any of its subsidiaries in his or her personal capacity is required to obtain the prior approval of our board of directors. The director having an interest in the transaction may not vote at the meeting of our board of directors at which the relevant transaction is subject to vote for approval.

 

3) Executive Officers

In addition to the executive directors who are also our executive officers, we currently have the following executive officers.

Name

Date of Birth

Position

In Charge of

Chun Sang-yung

Jul. 25, 1969

Deputy President and

Chief Financial Officer

Finance Management Team, Investor Relations Part, Accounting Part, Group Business Synergy Part

Wang Ho-min

Jun. 4, 1964

Deputy President and

Chief Compliance Officer

Compliance Team

Lee Een-kyoon

Apr. 1, 1967

Deputy President and

Chief Operation Officer

Shinhan Leadership Center, Management Support Team, Brand Strategy Team, PR Team

Bang Dong-kwon

Feb. 10, 1966

Deputy President and

Chief Risk Officer

Risk Management Part

Koh Seogheon

Sept. 27, 1968

Executive Director and

Chief Strategy&Sustainability Officer

Strategic Planning Team, ESG Part, Digital Strategy Team, Strategy of ICT&Information Security Team,

Park Hyun Joo

Apr. 22, 1965

Deputy President and

Group Consumer Protection Part

 

Name

Date of Birth

Position

In Charge of

 

 

Chief Customer Protection Part

 

Kim Junhwan

Jun. 23, 1972

Executive Director and

Head of Digital Part

Group Digital Part

Kim Jion

May. 12, 1968

Executive Director and

Chief Audit Officer

Group Audit Part

None of the executive officers have any significant activities outside Shinhan Financial Group.

Chun Sang-yung has been our deputy president and chief finance officer since January 1, 2024. Mr. Chun previously served as the head of group synergy division and business management division of Shinhan Financial Group. Mr. Chun received a bachelor’s degree in business management from Yeonsei University.

Wang Ho-min has been our deputy president and chief compliance officer since January 1, 2019. Mr. Wang previously served as the branch manager of Southern Jam-sil branch, Seoul Southern District Court branch and the head of corporate culture development team. Mr. Wang received a bachelor’s degree in law from Hankuk University of Foreign Studies.

Lee Een-kyoon has been our deputy president and chief operation officer since January 1, 2019. Mr. Lee previously served as the head of management support team and the head of secretary’s office of Shinhan Bank. Mr. Lee received a bachelor’s degree in English literature from Hanyang University.

Bang Dong-kwon has been our chief risk officer since January 1, 2020. Mr. Bang previously served as the head of risk management department of Shinhan Bank. Mr. Bang received a bachelor’s degree in English language and literature from Sung Kyun Kwan University.

Koh Seogheon has been our executive director and chief strategy & sustainability officer since January 1, 2022. Mr. Koh previously served as the head of business management division and strategic planning team of Shinhan Financial Group. Mr. Koh received a bachelor’s degree in economics from Seoul National University.

Park Hyun Joo has been our deputy president and chief consumer protection part since July 1, 2023. Ms. Park previously served as the head of Consumer Protection Division at Shinhan Bank. Ms. Park graduated from Seoul Girl’s Commercial High School.

Kim Junhwan has been our executive director and head of digital part since January 1, 2024. Mr. Kim previously served as the head of digital innovation team at Shinhan Bank. Mr. Kim received a master’s degree in computer application design studies from Korea Advanced Institute of Science & Technology.

Kim Jion has been our executive director and chief audit officer since January 1, 2024. Ms. Kim previously served as the head of PRM marketing team at Shinhan Bank. Ms. Kim received a bachelor’s degree in economics from Yonsei University.

There are no family relationships among our directors and/or executive officers.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation to Directors

 

 

1) Total Amount Approved at the Meeting of Shareholders

(As of Jun. 30, 2024)

 

Total number of persons

Total amount approved

at shareholders’ meeting

(KRW millions)

Notes

Directors

(Outside directors)

11(9)

3,000

No distinction is made between registered directors, outside directors, and members of the audit committee.

Note) Represents the aggregate amount for all directors (including outside directors) excluding long-term incentives.

 

2) Total Amount Paid

(As of Jun. 30, 2024)

 

Total number of

Persons

Total compensation

(KRW million)

Average

compensation

per person

(KRW million)

Notes

Registered Directors

2

1,096

548

-

Outside Directors

6

227

38

-

Audit committee members or internal auditor

3

122

41

-

Notes : Represents the total number of applicable persons as of Jun. 30, 2024.

 

Compensation to Non-registered directors

 

(As of Jun. 30, 2024)

 

Total number of persons

Total compensation
(KRW million)

Average Compensation

per person

(KRW million)

Notes

Non-registered directors

6

2,225

371

-

 

Top 5 Highest-Paid Individuals

 

1) Compensation exceeding Won 500 million- Individual basis

 

(KRW million)

Name

Position

Total Amount

Deferred Compensation

Jin Okdong

CEO

1,096

The performance-linked stock compensation (PS) consists of 11,729 shares, with the payment and amount to be determined later based on the company's long-term performance and stock price from 2024 to 2027.

 

 

 

 

 

2) Calculation criteria and method of compensation

 

(KRW million)

Name

Compensation Type

Total Compensation

Deferred Compensation

Jin Okdong

Earned Income

Salary

425

-The salary is paid monthly by dividing the total annual base salary and job allowance, which are determined by the Board of Directors and the Compensation Committee, within the compensation limit for directors resolved at the general shareholders' meeting. This determination takes into account factors such as position, duties, and contributions.

 

 

 

Bonus

671

-The bonus consists of an annual performance bonus of 332 million won for 2023 and long-term performance bonuses (PS) of 144 million won and 195 million won, which were granted during the period of the individual's tenure as Vice President from 2017 to 2018. The 2023 annual performance bonus was paid in the first quarter of 2024, reflecting the company's annual performance evaluation results based on the criteria established by the Compensation Committee in its first meeting of 2023. The long-term performance bonuses (PS) were also paid in the first quarter of 2024, with the final amounts calculated based on the company's performance over the four years following the grant and the stock price of the company's common stock at the beginning of the year, as determined by the criteria set by the Compensation Committee in each respective year.

 

-The CEO's annual performance bonus is determined by reflecting the performance evaluation grade, which is based on factors such as the level of achievement of the group's KPI targets, the group's absolute profit scale compared to the past five years, and the scores of the group's KPIs and strategic tasks. The final payment is made after confirming whether any deductions are necessary based on the company's risk management evaluation score.

 

-In 2023, although the group's net profit decreased by 6.4% year-on-year to 4.368 trillion won, the decrease was attributed to proactive provisions and financial support measures. Despite this, the company maintained strong profit-generation capabilities, with significant increases in non-interest income through the management of its securities portfolio, the launch of the group’s universal app "Super SOL," which improved customer convenience, and the enhancement of customer service through the establishment of an AI contact center, which increased the group's platform MAU. Additionally, the company laid the groundwork for an internal control system by preparing to introduce a proactive governance structure. Considering these factors, the annual performance bonus of 332 million won was paid.

 

-The long-term performance bonuses (PS) granted in 2017 and 2018 were finalized after four years, with the final amounts calculated based on the number of PS units acquired according to evaluation indicators, such as shareholder value and profitability, as well as the absolute profit scale of the group compared to previous years. The final amount was then adjusted based on the stock price of the company’s common stock at the beginning of the year, four years after the grant.

 

 

Stock option

-

Not Applicable

 

 

Other earned Income

-

Not Applicable

 

Name

Compensation Type

Total Compensation

Deferred Compensation

 

 

Retirement Income

-

Not Applicable

 

 

Other Income

-

Not Applicable

 

 

Stock Options

 

None

 

stock-based compensation system

- Cash compensation linked to stock

On February 29, 2024, through a resolution of the Remuneration Compensation Committee, our company granted cash compensation linked stock (PS) equivalent to 36,481 shares of our common stock to 9 executives, and the eligibility and amount of payment will be determined in the future based on the company's long-term performance and stock price from 2024 to 2027.

 

Employees

 

 

Gender

Number of Employees

Average length of Service

Total Salaries and wages

paid in 2024

(KRW million)

Average Payment

per person

(KRW million)

Male

135

3 yrs 2 mths

(15 yrs 9 mths)

12,678

94

Female

48

3 yrs 9 mths

(12 yrs 5 mths)

3,033

64

Total

183

3 yrs 4 mths

(14 yrs 11 mths) 1)

15,711

86

1) Average length of service including services within group subsidiaries

2) Total Salaries and wages is the amount paid from Jan.1,2024 to Jun.30, 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8. Related Party Transactions

Loans to Subsidiaries

(KRW billion)

 

Loans to Subsidiaries
(in KRW bil.)

Type

Origination

Date

Maturity

Date

Lending

Rate

Beginning Balance

(Jan. 1, 2024)

Decrease

Increase

Others1)

Ending Balance

(Mar. 31, 2024)

Shinhan Card

Loan

2019-04-18

2024-04-18

2.04%

100

-

-

-

-

Loan

2019-04-18

2026-04-18

2.09%

100

-

-

-

100

Loan

2019-10-22

2024-10-22

1.76%

40

-

-

-

40

Loan

2019-10-22

2026-10-22

1.81%

60

-

-

-

60

Loan

2020-09-17

2025-09-17

1.48%

200

-

-

-

200

Loan

2020-10-29

2025-10-29

1.46%

150

-

-

-

150

Loan

2021-02-18

2026-02-18

1.54%

150

-

-

-

150

Loan

2021-02-24

2026-02-24

1.62%

150

-

-

-

150

Loan

2021-11-11

2024-11-11

2.39%

170

-

-

-

170

Loan

2021-11-11

2026-11-11

2.55%

10

-

-

-

10

Loan

2022-04-20

2025-06-20

3.71%

100

-

-

-

100

Loan

2022-07-18

2025-07-18

4.21%

100

-

-

-

100

Loan

2022-07-18

2027-07-18

4.25%

100

-

-

-

100

Loan

2023-04-21

2028-04-21

4.21%

100

-

-

-

100

Loan

2023-10-30

2024-04-30

4.69%

50

50

-

-

-

Loan

2023-10-30

2024-04-30

4.81%

100

100

-

-

-

Loan

2019-11-19

2025-02-04

2.79%

516

-

-

40

556

Loan

2021-05-26

2026-05-12

1.53%

39

-

-

3

42

Financial

assets at

FVPL

2022-03-17

2052-03-17

4.01%

389

-

-

9

398

 

Financial

assets at

FVPL

2023-02-14

2053-02-14

5.28%

310

-

-

3

313

Shinhan Securities

Loan

2019-11-19

2025-02-04

2.79%

116

-

-

9

125

Loan

2020-08-20

2025-08-20

2.55%

641

-

-

50

691

Financial

assets at

FVPL

2021-06-14

-

2.93%

315

-

-

24

339

Shinhan

Capital

Loan

2019-02-01

2024-02-01

2.23%

50

50

-

-

-

Loan

2019-05-24

2024-05-24

1.92%

20

20

-

-

-

Loan

2020-04-10

2025-04-10

1.75%

200

-

-

-

200

Loan

2020-12-23

2025-12-23

1.57%

160

-

-

-

160

Loan

2021-03-16

2026-03-16

1.83%

150

-

-

-

150

Loan

2021-05-13

2026-05-12

1.53%

258

-

-

20

278

Financial

assets at

FVPL

2020-04-22

2050-04-22

3.56%

96

-

-

1

97

Financial

assets at

FVPL

2021-07-28

2051-07-28

3.38%

139

-

-

3

142

Shinhan Savings Bank

Loan

2020-05-28

2025-05-28

1.52%

50

-

-

-

50

Loan

2021-04-26

2026-04-26

1.85%

50

-

-

-

50

Loan

2021-05-28

2026-05-28

1.99%

50

-

-

-

50

Shinhan DS

Loan

2023-02-02

2024-02-01

3.86%

15

15

-

-

-

Loan

2024-02-01

2025-01-30

3.78%

-

-

10

-

10

 

Shinhan Venture

Loan

2023-10-26

2024-02-26

4.58%

50

50

-

-

-

Loan

2023-12-11

2024-04-11

4.08%

10

-

-

-

10

Loan

2024-02-26

2025-02-26

3.84%

-

-

50

-

50

Loan

2024-04-11

2024-10-11

3.65%

-

-

10

-

10

Shinhan Asset Trust

Loan

2024-03-25

2027-03-25

3.76%

-

-

100

-

100

Financial

assets at

FVPL

2024-05-23

2054-05-23

4.71%

-

-

100

-

100

Total

5,304

395

270

162

5,341

 

 

9. Material Information after the reporting period

 

Announcement on Quarterly Cash Dividends

In accordance with the resolution of the Board of Directors on July 26, 2024, the Group resolved to pay quarterly cash dividends.

 

Total dividend amount to be paid: KRW 273,357,752,400 (KRW 540 per share)

The total number of shares subject to dividend is 506,218,060 shares

Record date: June 30, 2024

 

Exclusion of Subsidiary from Holding Company (Shinhan AI)

On July 15, 2024, Shinhan Financial Group (hereinafter “SFG”) disclosed that ‘Shinhan AI’ has been dissolved from the list of group’s subsidiaries. SFG announced that reasons for exclusion of Shinhan AI was business liquidation. Cosequently, the total number of subsidiaries of SFG decreased from 16 to 15.

 

Corporate Value-up Plan of Shinhan Financial Group

In accordance with the resolution of the Board of Directors On July 26, 2024, the Group made a resolution to establish “2024 Shinhan Financial Grop Value-up Plan”.

SFG selected the following core targets for enhancement of the corporate valuation to achieve by 2027.

- Based on CET1 Ratio 13% or above, achieving ROE 10% and ROTCE 11.5%

- Increasing Shareholder Return Ratio to 50% level

- Improving TBPS through reducing the number of shares below 500 million by 2024, and down to 450 million by 2027.

 

For more detailed information, please refer to Form 6-K reported on July 26, 2024.

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

 

 

 

Shinhan Financial Group Co., Ltd.

 

(Registrant)

 

 

 

    Date: August 14, 2024

 

By:

/s/ CHUN Sang-yung

 

 

 

 

 

 

Name: CHUN Sang-yung

 

 

Title: Chief Financial Officer