EX-99.2 3 ck0001263043-ex99_2.htm EX-99.2 EX-99.2

Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

 

SHINHAN FINANCIAL GROUP CO., LTD.

AND SUBSIDIARIES

 

 

 

 

 

 

Consolidated Interim Financial Statements

 

June 30, 2024 and 2023

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

Contents

 

 

 

 

Page

 

 

 

Independent Auditors’ Review Report

 

1

 

 

 

Consolidated Interim Statements of Financial Position

 

3

 

 

 

Consolidated Interim Statements of Comprehensive Income

 

4

 

 

 

Consolidated Interim Statements of Changes in Equity

 

6

 

 

 

Consolidated Interim Statements of Cash Flows

 

8

 

 

 

Notes to the Consolidated Interim Financial Statements

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Independent Auditors’ Review Report

Based on a report originally issued in Korean

 

 

The Board of Directors and Stockholders

Shinhan Financial Group Co., Ltd.:

 

 

Reviewed Financial Statements

We have reviewed the accompanying condensed consolidated interim financial statements of Shinhan Financial Group Co., Ltd. and its subsidiaries (hereinafter referred to as the “Group”), which comprise the condensed consolidated interim statement of financial position as of June 30, 2024, the condensed consolidated interim statements of comprehensive income for the three-month and six-month periods ended June 30, 2024 and 2023, the condensed consolidated interim statements of changes in equity and cash flows for the six-month periods ended June 30, 2024 and 2023, and notes, comprising a summary of material accounting policy information and other explanatory information.

 

Management’s Responsibility

Management is responsible for the preparation and fair presentation of these condensed consolidated interim financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) No.1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

Auditors’ Review Responsibility

Our responsibility is to issue a report on these condensed consolidated interim financial statements based on our reviews.

 

We conducted our reviews in accordance with the Review Standards for Quarterly and Semiannual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements referred to above do not present fairly, in all material respects, in accordance with K-IFRS 1034 Interim Financial Reporting.

 

Other Matters

The procedures and practices utilized in the Republic of Korea to review such condensed consolidated interim financial statements may differ from those generally accepted and applied in other countries.

 

The consolidated statement of financial position of the Company as of December 31, 2023, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, were audited by us in accordance with Korean Standards on Auditing and our report thereon, dated March 4, 2024, expressed an unqualified opinion. The accompanying consolidated statement of financial position of the Company as of December 31, 2023, presented for comparative purposes, is consistent, in all material respects, with the audited consolidated statement of financial position from which it has been derived.

 

 

1

 


 

 

 

 

 

 

 

 

KPMG Samjong Accounting Corp.

Seoul, Korea

August 14, 2024

 

 

This report is effective as of August 14, 2024, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying condensed consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that the above review report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

 

2

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Interim Statements of Financial Position

As of June 30, 2024 and December 31, 2023

 

(In millions of won)

 

Note

 

June 30, 2024(Unaudited)

 

 

December 31, 2023

 

Assets

 

 

 

 

 

 

Cash and due from banks at amortized cost

 

4, 7

W

35,010,082

 

34,629,251

Financial assets at fair value through profit or loss

 

4, 8

 

74,487,460

 

71,216,564

Derivative assets

 

4, 9

 

6,317,567

 

4,711,421

Securities at fair value through other comprehensive income

 

4, 10

 

88,821,773

 

90,311,979

Securities at amortized cost

 

4, 10

 

36,007,704

 

35,686,487

Loans at amortized cost

 

4, 11

 

434,524,032

 

411,739,562

Property and equipment

 

 

 

3,968,103

 

3,972,304

Intangible assets

 

 

 

6,178,741

 

6,217,946

Investments in associates

 

12

 

2,760,114

 

2,692,031

Current tax receivable

 

 

 

36,792

 

30,590

Deferred tax assets

 

 

 

174,680

 

153,719

Investment property

 

 

 

354,231

 

257,806

Net defined benefit assets

 

16

 

176,112

 

114,378

Insurance contract assets

 

18

 

866

 

10,654

Reinsurance contract assets

 

18

 

113,438

 

88,353

Other assets

 

4, 11

 

38,711,097

 

29,925,844

Assets held for sale

 

 

 

37,091

 

36,444

Total assets

 

 

W

727,679,883

 

691,795,333

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Deposits

 

4

W

402,755,997

 

381,512,664

Financial liabilities at fair value through profit or loss

 

4, 13

 

2,265,327

 

1,868,977

Financial liabilities designated at fair value through profit or loss

 

4, 14

 

7,638,048

 

7,796,727

Derivative liabilities

 

4, 9

 

6,239,753

 

5,038,416

Borrowings

 

4

 

57,197,232

 

56,901,352

Debt securities issued

 

4, 15

 

86,249,347

 

81,561,725

Net defined benefit liabilities

 

16

 

92,227

 

67,620

Provisions

 

17

 

1,369,861

 

1,369,666

Current tax payable

 

 

 

231,466

 

92,253

Deferred tax liabilities

 

 

 

507,799

 

542,595

Insurance contract liabilities

 

18

 

49,667,364

 

48,333,208

Reinsurance contract liabilities

 

18

 

116,490

 

93,240

Investment contract liabilities

 

 

 

1,369,005

 

1,572,685

Other liabilities

 

4

 

54,377,687

 

48,722,340

Total liabilities

 

 

 

670,077,603

 

635,473,468

 

 

 

 

 

 

 

Equity

 

20

 

 

 

 

Capital stock

 

 

 

2,969,641

 

2,969,641

Hybrid bonds

 

 

 

4,201,088

 

4,001,731

Capital surplus

 

 

 

12,094,968

 

12,094,968

Capital adjustments

 

 

 

(706,879)

 

(658,664)

Accumulated other comprehensive loss

 

 

 

(1,967,062)

 

(1,074,453)

Retained earnings

 

 

 

38,245,507

 

36,387,314

Total equity attributable to equity holders of Shinhan Financial Group Co., Ltd.

 

 

 

54,837,263

 

53,720,537

Non-controlling interests

 

 

 

2,765,017

 

2,601,328

Total equity

 

 

 

57,602,280

 

56,321,865

 

 

 

 

 

 

 

Total liabilities and equity

 

 

W

727,679,883

 

691,795,333

 

 

 

See accompanying notes to the consolidated interim financial statements.

 

3


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income

For the six-month periods ended June 30, 2024 and 2023

 

 

 

 

 

 

June 30, 2024

(Unaudited)

 

June 30, 2023

(Unaudited)

(In millions of won)

 

Notes

 

Three-month

 

Six-

month

 

Three-month

 

Six-

month

Interest income

 

 

W

7,244,965

 

14,435,457

 

6,814,724

 

13,307,663

Interest expense

 

 

 

(4,423,122)

 

(8,797,744)

 

(4,120,541)

 

(8,039,638)

Net interest income

 

22

 

2,821,843

 

5,637,713

 

2,694,183

 

5,268,025

 

 

 

 

 

 

 

 

 

 

 

Fees and commission income

 

 

 

1,121,853

 

2,186,078

 

1,045,050

 

1,995,691

Fees and commission expense

 

 

 

(405,945)

 

(766,769)

 

(395,747)

 

(742,963)

Net fees and commission income

 

23

 

715,908

 

1,419,309

 

649,303

 

1,252,728

 

 

 

 

 

 

 

 

 

 

 

Insurance income

 

 

 

778,581

 

1,543,924

 

727,261

 

1,412,926

Reinsurance income

 

 

 

8,148

 

22,959

 

10,194

 

23,256

Insurance service expenses

 

 

 

(491,515)

 

(967,462)

 

(457,677)

 

(901,012)

Reinsurance service expenses

 

 

 

(21,908)

 

(38,706)

 

(19,010)

 

(37,594)

Net insurance income

 

18

 

273,306

 

560,715

 

260,768

 

497,576

 

 

 

 

 

 

 

 

 

 

 

Insurance finance income

 

 

 

4,933

 

16,750

 

13,247

 

26,518

Insurance finance expense

 

 

 

(138,677)

 

(276,541)

 

(75,221)

 

(364,844)

Net insurance finance expense

 

19

 

(133,744)

 

(259,791)

 

(61,974)

 

(338,326)

 

 

 

 

 

 

 

 

 

 

 

Dividend income

 

 

 

74,465

 

153,554

 

60,729

 

129,201

Net gain on financial instruments at fair value through profit or loss

 

 

 

648,935

 

1,034,083

 

510,034

 

1,611,169

Net gain (loss) on financial instruments designated at fair value through profit or loss

 

 

 

(199,011)

 

(231,253)

 

15,707

 

(438,793)

Net gain on foreign currency transaction

 

 

 

207,415

 

341,746

 

25,117

 

226,176

Net gain (loss) on disposal of financial securities at fair value through other comprehensive income

 

10

 

5,162

 

27,280

 

5,599

 

(13,559)

Net gain (loss) on disposal of securities at amortized cost

 

10

 

(2)

 

(4)

 

(1)

 

356

Provision for allowance for credit loss

 

24

 

(605,501)

 

(977,480)

 

(522,279)

 

(983,483)

General and administrative expenses

 

25

 

(1,471,614)

 

(2,843,851)

 

(1,442,922)

 

(2,798,848)

Other operating expenses, net

 

 

 

(484,619)

 

(941,242)

 

(458,217)

 

(919,989)

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

1,852,543

 

3,920,779

 

1,736,047

 

3,492,233

 

 

 

 

 

 

 

 

 

 

 

Equity method income

 

12

 

(7,359)

 

(14,958)

 

22,365

 

67,334

Other non-operating income (expense), net

 

 

 

26,255

 

(243,877)

 

(29,996)

 

25,612

Profit before income taxes

 

 

 

1,871,439

 

3,661,944

 

1,728,416

 

3,585,179

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

27

 

420,453

 

863,129

 

459,636

 

902,056

Profit for the period

 

 

W

1,450,986

 

2,798,815

 

1,268,780

 

2,683,123

+

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the consolidated interim financial statements.

 

4


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income (Continued)

For the six-month periods ended June 30, 2024 and 2023

 

(In millions of won, except earnings per share data)

 

 

 

June 30, 2024

(Unaudited)

 

June 30, 2023

(Unaudited)

 

 

Notes

 

Three-

month

 

Six-

month

 

Three-

month

 

Six-

month

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss) for the period, net of income tax

 

20

 

 

 

 

 

 

 

 

Items that are or may be reclassified to profit or loss:

 

 

 

 

 

 

 

 

 

 

Valuation gain (loss) on securities at fair value through other comprehensive income

 

 

W

518,833

 

(85,638)

 

(745,255)

 

866,917

Equity in other comprehensive income (loss) of associates

 

 

 

(27)

 

(37)

 

4,261

 

6,154

Foreign currency translation adjustments for foreign operations

 

 

 

16,287

 

113,243

 

(53,452)

 

126,087

Net change in unrealized fair value of cash flow hedges

 

 

 

20,739

 

(21,513)

 

(29,693)

 

(7,300)

Net finance income (expense) on insurance contract assets (liabilities)

 

 

 

(944,731)

 

(1,012,217)

 

766,658

 

(164,257)

Net finance income (expense) on reinsurance contract assets (liabilities)

 

 

 

600

 

(495)

 

9,229

 

(3,831)

 

 

 

 

(388,299)

 

(1,006,657)

 

(48,252)

 

823,770

Items that will never be reclassified to profit or loss:

 

 

 

 

 

 

 

 

 

 

Remeasurement of the net defined benefit liabilities (assets)

 

 

 

62,182

 

61,063

 

(33,198)

 

(36,614)

Valuation gain (loss) on securities at fair value through other comprehensive income

 

 

 

12,914

 

53,554

 

(17,780)

 

(67,538)

Gain (loss) on disposal of securities at fair value through other comprehensive income

 

 

 

478

 

(2,508)

 

-

 

(1,260)

Changes in own credit risk on financial liabilities designated at fair value through profit of loss

 

 

 

(1,265)

 

(3,299)

 

(3,666)

 

883

 

 

 

 

74,309

 

108,810

 

(54,644)

 

(104,529)

Total other comprehensive income (loss), net of income tax

 

 

 

(313,990)

 

(897,847)

 

(102,896)

 

719,241

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

 

W

1,136,996

 

1,900,968

 

1,165,884

 

3,402,364

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to:

 

 

 

 

 

 

 

 

 

 

Equity holders of Shinhan Financial Group Co., Ltd.

 

 

W

1,425,479

 

2,747,011

 

1,238,265

 

2,626,223

Non-controlling interests

 

 

 

25,507

 

51,804

 

30,515

 

56,900

 

 

 

W

1,450,986

 

2,798,815

 

1,268,780

 

2,683,123

Total comprehensive income attributable to:

 

 

 

 

 

 

 

 

 

 

Equity holders of Shinhan Financial Group Co., Ltd.

 

 

W

1,110,843

 

1,848,764

 

1,135,245

 

3,343,340

Non-controlling interests

 

 

 

26,153

 

52,204

 

30,639

 

59,024

 

 

 

W

1,136,996

 

1,900,968

 

1,165,884

 

3,402,364

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

28

 

 

 

 

 

 

 

 

Basic and diluted earnings per share in won

 

 

W

2,706

 

5,219

 

2,295

 

4,847

 

 

See accompanying notes to the consolidated interim financial statements.

5

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity (Continued)

For the six-month period ended June 30, 2024444

(In millions of won)

 

June 30, 2023

 

 

Equity attributable to equity holders of Shinhan Financial Group Co., Ltd.

 

 

 

 

 

 

Capital

stock

 

Hybrid

bonds

 

Capital

surplus

 

Capital

adjustments

 

Accumulated

other compre-hensive income(loss)

 

Retained earnings

 

Sub-total

 

Non-controlling interests

 

Total

Balance at January 1, 2023

W

2,969,641

 

4,196,968

 

12,095,043

 

(582,859)

 

(1,910,750)

 

33,963,799

 

50,731,842

 

2,691,716

 

53,423,558

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

 

-

 

-

 

-

 

-

 

-

 

2,626,223

 

2,626,223

 

56,900

 

2,683,123

Other comprehensive income, net of income tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on valuation and disposal of securities at fair value through other comprehensive income

 

-

 

-

 

-

 

-

 

796,612

 

-

 

796,612

 

1,507

 

798,119

Equity in other comprehensive income of associates

 

-

 

-

 

-

 

-

 

6,154

 

-

 

6,154

 

-

 

6,154

Foreign currency translation adjustments for foreign operations

 

-

 

-

 

-

 

-

 

125,391

 

-

 

125,391

 

696

 

126,087

Net change in unrealized fair value of cash flow hedges

 

-

 

-

 

-

 

-

 

(7,300)

 

-

 

(7,300)

 

-

 

(7,300)

Net finance loss on insurance contract assets (liabilities)

 

-

 

-

 

-

 

-

 

(164,257)

 

-

 

(164,257)

 

-

 

(164,257)

Net finance loss on reinsurance contract assets (liabilities)

 

-

 

-

 

-

 

-

 

(3,831)

 

-

 

(3,831)

 

-

 

(3,831)

Remeasurement of defined benefit liabilities (assets)

 

-

 

-

 

-

 

-

 

(36,535)

 

-

 

(36,535)

 

(79)

 

(36,614)

Changes in own credit risk on financial liabilities designated at fair value through profit or loss

 

-

 

-

 

-

 

-

 

883

 

-

 

883

 

-

 

883

Total other comprehensive income

 

-

 

-

 

-

 

-

 

717,117

 

-

 

717,117

 

2,124

 

719,241

Total comprehensive income

 

-

 

-

 

-

 

-

 

717,117

 

2,626,223

 

3,343,340

 

59,024

 

3,402,364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other changes in equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual dividends

 

-

 

-

 

-

 

-

 

-

 

(455,215)

 

(455,215)

 

-

 

(455,215)

Quarterly dividends

 

-

 

-

 

-

 

-

 

-

 

(274,357)

 

(274,357)

 

-

 

(274,357)

Dividends to hybrid bonds

 

-

 

-

 

-

 

-

 

-

 

(91,954)

 

(91,954)

 

-

 

(91,954)

Issuance of hybrid bonds

 

-

 

398,831

 

-

 

-

 

-

 

-

 

398,831

 

-

 

398,831

Repayment of hybrid bonds

 

-

 

(134,678)

 

-

 

(322)

 

-

 

-

 

(135,000)

 

-

 

(135,000)

Transfer to retained earning of redemption loss of hybrid bonds

 

-

 

-

 

-

 

317

 

-

 

(317)

 

-

 

-

 

-

 

Acquisition of treasury stock (Note 20)

 

-

 

-

 

-

 

(285,947)

 

-

 

-

 

(285,947)

 

-

 

(285,947)

Retirement of treasury stock (Note 20)

 

 -

 

-

 

-

 

285,947

 

-

 

(286,005)

 

(58)

 

-

 

(58)

Preferred stock converted to common stock

 

-

 

-

 

(75)

 

-

 

-

 

-

 

(75)

 

-

 

(75)

Change in other capital adjustments

 

-

 

-

 

-

 

55

 

-

 

(462)

 

(407)

 

-

 

(407)

Change in other non-controlling interests

 

-

 

-

 

-

 

(60)

 

-

 

-

 

(60)

 

48,004

 

47,944

 

 

-

 

264,153

 

(75)

 

(10)

 

-

 

(1,108,310)

 

(844,242)

 

48,004

 

(796,238)

Reclassification between OCI and retained earnings

 

-

 

-

 

-

 

-

 

(2,319)

 

2,319

 

-

 

-

 

-

Balance at June 30, 2023 (Unaudited)

W

2,969,641

 

4,461,121

 

12,094,968

 

(582,869)

 

(1,195,952)

 

35,484,031

 

53,230,940

 

2,798,744

 

56,029,684

See accompanying notes to the consolidated interim financial statements.

6

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity (Continued)

For the six-month period ended June 30, 2024444

 

(In millions of won)

 

June 30, 2024

 

 

Equity attributable to equity holders of Shinhan Financial Group Co., Ltd.

 

 

 

 

 

 

Capital

stock

 

Hybrid

bonds

 

Capital

surplus

 

Capital

adjustments

 

Accumulated

other compre-hensive income(loss)

 

Retained earnings

 

Sub-total

 

Non-controlling interests

 

Total

Balance at January 1, 2024

W

2,969,641

 

4,001,731

 

12,094,968

 

(658,664)

 

(1,074,453)

 

36,387,314

 

53,720,537

 

2,601,328

 

56,321,865

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

 

-

 

-

 

-

 

-

 

-

 

2,747,011

 

2,747,011

 

51,804

 

2,798,815

Other comprehensive income, net of income tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

Loss on valuation and disposal of securities at fair value through other comprehensive income

 

-

 

-

 

-

 

-

 

(34,643)

 

-

 

(34,643)

 

51

 

(34,592)

Equity in other comprehensive income of associates

 

-

 

-

 

-

 

-

 

(37)

 

-

 

(37)

 

-

 

(37)

Foreign currency translation adjustments for foreign operations

 

-

 

-

 

-

 

-

 

113,077

 

-

 

113,077

 

166

 

113,243

Net change in unrealized fair value of cash flow hedges

 

-

 

-

 

-

 

-

 

(21,513)

 

-

 

(21,513)

 

-

 

(21,513)

Net finance loss on insurance contract assets(liabilities)

 

 -

 

-

 

-

 

-

 

(1,012,217)

 

-

 

(1,012,217)

 

-

 

(1,012,217)

Net finance loss on reinsurance contract assets (liabilities)

 

-

 

-

 

-

 

-

 

(495)

 

-

 

(495)

 

-

 

(495)

Remeasurements of defined benefit liability (asset)

 

-

 

-

 

-

 

-

 

60,880

 

-

 

60,880

 

183

 

61,063

Changes in own credit risk on financial liabilities designated at fair value through profit or loss

 

-

 

-

 

-

 

-

 

(3,299)

 

-

 

(3,299)

 

-

 

(3,299)

Total other comprehensive income

 

-

 

-

 

-

 

-

 

(898,247)

 

-

 

(898,247)

 

400

 

(897,847)

Total comprehensive income

 

-

 

-

 

-

 

-

 

(898,247)

 

2,747,011

 

1,848,764

 

52,204

 

1,900,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other changes in equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual dividends

 

-

 

-

 

-

 

-

 

-

 

(268,697)

 

(268,697)

 

-

 

(268,697)

Quarterly dividends

 

-

 

-

 

-

 

-

 

-

 

(275,069)

 

(275,069)

 

-

 

(275,069)

Dividends to hybrid bonds

 

-

 

-

 

-

 

-

 

-

 

(85,806)

 

(85,806)

 

-

 

(85,806)

Issuance of hybrid bonds

 

-

 

398,833

 

-

 

-

 

-

 

-

 

398,833

 

-

 

398,833

 

Repayment of hybrid bonds

 

-

 

(199,476)

 

-

 

(524)

 

-

 

-

 

(200,000)

 

-

 

(200,000)

 

Transfer to retained earning of redemption loss of hybrid bonds

 

-

 

-

 

-

 

102,667

 

-

 

(102,667)

 

-

 

-

 

-

Acquisition of treasury stock (Note 20)

 

-

 

-

 

-

 

(300,050)

 

-

 

-

 

(300,050)

 

-

 

(300,050)

Disposal of treasury stock (Note 20)

 

-

 

-

 

-

 

296

 

-

 

-

 

296

 

-

 

296

Retirement of treasury stock (Note 20)

 

-

 

-

 

-

 

150,000

 

 -

 

(150,056)

 

(56)

 

-

 

(56)

Change in other capital adjustments

 

-

 

-

 

-

 

(604)

 

-

 

(885)

 

(1,489)

 

-

 

(1,489)

Change in other non-controlling interests

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

111,485

 

111,485

 

 

-

 

199,357

 

-

 

(48,215)

 

-

 

(883,180)

 

(732,038)

 

111,485

 

(620,553)

Reclassification between OCI and retained earnings

 

-

 

-

 

-

 

-

 

5,638

 

(5,638)

 

-

 

-

 

-

Balance at June 30, 2024 (Unaudited)

W

2,969,641

 

4,201,088

 

12,094,968

 

(706,879)

 

(1,967,062)

 

38,245,507

 

54,837,263

 

2,765,017

 

57,602,280

See accompanying notes to the consolidated interim financial statements.

7

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Interim Statements of Cash Flows

For the six-month periods ended June 30, 2024 and 20234

 

 

 

 

 

Six-month periods ended June 30

 (In millions of won)

 

Notes

 

2024 (Unaudited)

 

2023 (Unaudited)

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

Profit for the period

 

 

W

2,798,815

 

2,683,123

Adjustments for:

 

 

 

 

 

 

Interest income

 

22

 

(14,435,457)

 

(13,307,663)

Interest expense

 

22

 

8,797,744

 

8,039,638

Dividend income

 

 

 

(153,554)

 

(129,201)

Corporate tax expense

 

 

 

863,129

 

902,056

Net fees and commission expense

 

 

 

147,925

 

157,811

Net insurance contract income

 

 

 

(560,715)

 

(497,576)

Net insurance finance expense

 

 

 

259,791

 

338,326

Net gain on financial instruments at fair value through profit or loss

 

 

 

(683,255)

 

(834,246)

Net gain on derivatives

 

 

 

(169,142)

 

(81,328)

Net gain on foreign currency translation

 

 

 

(189,553)

 

(100,267)

Net loss on financial instruments designated at fair value through profit or loss

 

 

 

101,742

 

208,735

Net loss (gain) on disposal of securities at fair value through other comprehensive income

 

10

 

(27,280)

 

13,559

Net loss (gain) on disposal of securities at amortized cost

 

10

 

4

 

(356)

Provision for allowance for credit loss

 

24

 

977,480

 

983,483

Employee benefits

 

 

 

91,689

 

64,966

Depreciation and other amortization

 

25

 

615,151

 

574,869

Other operating expense

 

 

 

358,781

 

323,624

Equity method expense (income)

 

12

 

14,958

 

(67,334)

Other non-operating expense (income)

 

 

 

204,722

 

(54,792)

 

 

 

 

(3,785,840)

 

(3,465,696)

 

 

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

Due from banks at amortized cost

 

 

 

(1,456)

 

347,259

Securities at fair value through profit or loss

 

 

 

(2,719,145)

 

(618,632)

Loans at fair value through profit or loss

 

 

 

333,352

 

183,730

Financial instruments designated at fair value through profit or loss

 

 

 

(264,933)

 

(317,074)

Derivative instruments

 

 

 

(244,535)

 

(598,208)

Loans at amortized cost

 

 

 

(21,426,996)

 

2,680,673

Insurance contract assets

 

 

 

9,788

 

29

Reinsurance contract assets

 

 

 

(25,085)

 

11,935

Other assets

 

 

 

(9,468,937)

 

(6,309,298)

Deposits

 

 

 

21,002,712

 

2,437,804

Net defined benefit liabilities (assets)

 

 

 

(27,942)

 

64,631

Provisions

 

 

 

(286,763)

 

(360,213)

Insurance contract liabilities

 

 

 

(437,651)

 

(767,657)

Reinsurance contract liabilities

 

 

 

6,436

 

(6,348)

Investment contract liabilities

 

 

 

(235,094)

 

40,623

Other liabilities

 

 

 

5,680,859

 

9,000,634

 

 

 

 

(8,105,390)

 

5,789,888

 

 

 

 

 

 

 

Income taxes paid

 

 

 

(387,800)

 

(1,017,312)

Interest received

 

 

 

14,050,319

 

12,735,007

Interest paid

 

 

 

(7,385,202)

 

(5,449,043)

Dividends received

 

 

 

152,206

 

134,959

 Net cash flow from operating activities

 

 

W

(2,662,892)

 

11,410,926

 

8

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Interim Statements of Cash Flows (Continued)

For the six-month periods ended June 30, 2024 and 20234

 

 

 

 

 

Six-month periods ended June 30

(In millions of won)

 

Notes

 

2024 (Unaudited)

 

2023 (Unaudited)

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Decrease in financial instruments at fair value through profit or loss

 

 

W

2,156,164

 

2,594,339

Acquisition of financial instruments at fair value through profit or loss

 

 

 

(2,693,066)

 

(3,198,182)

Decrease in financial securities at fair value through other comprehensive income

 

 

 

22,556,397

 

21,223,747

Acquisition of securities at fair value through other comprehensive income

 

 

 

(20,063,332)

 

(19,567,268)

Decrease in securities at amortized cost

 

 

 

3,415,016

 

1,522,609

Acquisition of securities at amortized cost

 

 

 

(3,616,448)

 

(3,144,825)

Proceeds from disposal of property and equipment

 

 

 

5,215

 

9,028

Acquisition of property and equipment

 

 

 

(95,939)

 

(106,041)

Proceeds from disposal of intangible assets

 

 

 

4,752

 

19,167

Acquisition of intangible assets

 

 

 

(302,855)

 

(190,136)

Proceeds from disposal of investments in associates

 

 

 

194,453

 

179,849

Acquisition of investments in associates

 

 

 

(444,474)

 

(194,930)

Proceeds from disposal of investment property

 

 

 

5,281

 

166,712

Acquisition of investment property

 

 

 

(1,394)

 

(3,135)

Disposal of assets held-for-sale

 

 

 

-

 

1,576

Change in other assets

 

 

 

(8,791)

 

(188,154)

Proceeds from settlement of hedging derivative financial

 instruments

 

 

 

29,102

 

6,440

Payment of settlement of hedging derivative financial instruments

 

 

 

(64,077)

 

(30,063)

Net cash flow from investing activities

 

 

W

1,076,004

 

(899,267)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Issuance of hybrid bonds

 

 

W

398,833

 

398,831

Repayment of hybrid bonds

 

 

 

(200,000)

 

(135,000)

Net change in borrowings

 

 

 

(339,276)

 

1,016,778

Proceeds from debt securities issued

 

 

 

21,087,248

 

18,953,921

Repayments of debt securities issued

 

 

 

(17,873,570)

 

(22,197,747)

Increase in financial liabilities designated at fair value through profit or loss

 

 

 

-

 

209,969

Changes in other liabilities

 

 

 

(61,336)

 

60,286

Dividends paid

 

 

 

(629,266)

 

(821,158)

Proceeds from settlement of hedging derivative financial instruments

 

 

 

1,423,450

 

1,307,419

Payments of settlement of hedging derivative financial instruments

 

 

 

(1,427,307)

 

(1,232,115)

Acquisition of treasury stock

 

 

 

(300,050)

 

(285,947)

Disposal of treasury stock

 

 

 

296

 

-

Costs for retirement of treasury stock

 

 

 

(56)

 

(57)

Increase(decrease) in non-controlling interests

 

 

 

(289,382)

 

47,531

Repayments of lease liabilities

 

 

 

(129,236)

 

(136,777)

Conversion costs for preferred stock to common stock

 

 

 

-

 

(75)

Net cash flow from financing activities

 

 

 

1,660,348

 

(2,814,141)

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents held

 

 

 

104,611

 

51,707

Increase in cash and cash equivalents

 

 

 

178,071

 

7,749,225

 

 

 

 

 

 

 

9

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Consolidated Interim Statements of Cash Flows (Continued)

For the six-month periods ended June 30, 2024 and 20234

Cash and cash equivalents at the beginning of the period

 

30

 

30,416,884

 

24,413,946

 

 

 

 

 

 

 

Cash and cash equivalents at the end of the period

 

30

W

30,594,955

 

32,163,171

See accompanying notes to the consolidated interim financial statements.

10

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

1. Reporting entity

 

Shinhan Financial Group Co., Ltd., the controlling company, and its subsidiaries included in consolidation (Hereinafter referred to as the “Group”) are summarized as follows:

 

(a) Controlling company

 

Shinhan Financial Group Co., Ltd. (the “Shinhan Financial Group” or the “Company”), the controlling company, is incorporated on September 1, 2001 for the main purposes of controlling, managing and funding Shinhan Bank, Shinhan Securities Co., Ltd., Shinhan Capital Co., Ltd. and Shinhan BNP Asset Management Co., Ltd. by way of share transfers. The total capital stock amounted to W1,461,721 million. Also, Shinhan Financial Group’s shares have been listed on the Korea Exchange since September 10, 2001 and Shinhan Financial Group’s American Depositary Shares have been registered with the Securities and Exchange Commission (SEC) and listed on the New York Stock Exchange since September 16, 2003.

 

(b) Ownership of Shinhan Financial Group and its major consolidated subsidiaries as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

 

 

 

 

Date of financial information

 

Ownership (%)

Investor

 

Investee (*1)

 

Location

 

 

 

June 30,

2024

 

December 31, 2023

Shinhan Financial Group Co., Ltd.

 

Shinhan Bank

 

Korea

 

June 30

 

100.0

 

100.0

 

Shinhan Card Co., Ltd.

 

 

 

100.0

 

100.0

 

Shinhan Securities Co., Ltd.

 

 

 

100.0

 

100.0

 

Shinhan Life Insurance Co., Ltd.

 

 

 

100.0

 

100.0

 

Shinhan Capital Co., Ltd.

 

 

 

100.0

 

100.0

 

Jeju Bank

 

 

 

75.3

 

75.3

 

Shinhan Asset Management Co., Ltd.

 

 

 

100.0

 

100.0

 

SHC Management Co., Ltd.

 

 

 

100.0

 

100.0

 

Shinhan DS

 

 

 

100.0

 

100.0

 

Shinhan Savings Bank

 

 

 

100.0

 

100.0

 

Shinhan Asset Trust Co. Ltd

 

 

 

100.0

 

100.0

 

Shinhan Fund Partners Co., Ltd.

 

 

 

99.8

 

99.8

 

Shinhan REITs Management Co., Ltd.

 

 

 

100.0

 

100.0

 

Shinhan AI Co., Ltd. (*2)

 

 

 

100.0

 

100.0

 

Shinhan Venture Investment Co., Ltd.

 

 

 

100.0

 

100.0

 

Shinhan EZ General Insurance, Ltd.

 

 

 

85.1

 

85.1

Shinhan Bank

 

Shinhan Bank America

 

USA

 

 

100.0

 

100.0

 

Shinhan Bank Europe GmbH

 

Germany

 

 

100.0

 

100.0

 

Shinhan Bank Cambodia

 

Cambodia

 

 

97.5

 

97.5

 

Shinhan Bank Kazakhstan Limited

 

Kazakhstan

 

 

100.0

 

100.0

 

Shinhan Bank Canada

 

Canada

 

 

100.0

 

100.0

 

Shinhan Bank (China) Limited

 

China

 

 

100.0

 

100.0

 

Shinhan Bank Japan

 

Japan

 

 

100.0

 

100.0

 

Shinhan Bank Vietnam Ltd.

 

Vietnam

 

 

100.0

 

100.0

 

Banco Shinhan de Mexico

 

Mexico

 

 

99.9

 

99.9

 

PT Bank Shinhan Indonesia

 

Indonesia

 

 

99.0

 

99.0

Shinhan Bank Japan

 

SBJDNX

 

Japan

 

 

100.0

 

100.0

 

 

 

 

 

 

11

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

1. Reporting entity (continued)

 

(b) Ownership of Shinhan Financial Group and its major consolidated subsidiaries as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

 

 

 

 

Date of financial information

 

Ownership (%)

Investor

 

Investee (*1)

 

Location

 

 

 

June 30,

2024

 

December 31, 2023

Shinhan Card Co., Ltd.

 

Shinhan Credit Information Co., Ltd.

 

Korea

 

June 30

 

100.0

 

100.0

 

LLP MFO Shinhan Finance

 

Kazakhstan

 

 

75.0

 

100.0

 

PT. Shinhan Indo Finance

 

Indonesia

 

 

76.3

 

76.3

 

Shinhan Microfinance Co., Ltd.

 

Myanmar

 

 

100.0

 

100.0

 

Shinhan Vietnam Finance Co., Ltd.

 

Vietnam

 

 

100.0

 

100.0

Shinhan Securities Co., Ltd.

 

Shinhan Securities America Inc.

 

USA

 

 

100.0

 

100.0

 

Shinhan Securities Asia Ltd.

 

Hong Kong

 

 

100.0

 

100.0

 

SHINHAN SECURITIES VIETNAM CO., LTD.

 

Vietnam

 

 

100.0

 

100.0

 

PT. Shinhan Sekuritas Indonesia

 

Indonesia

 

 

99.0

 

99.0

PT Shinhan Sekuritas Indonesia

 

PT. Shinhan Asset Management Indonesia

 

Indonesia

 

 

75.0

 

75.0

Shinhan Life Insurance Co., Ltd.

 

Shinhan Financial Plus Co., Ltd

 

Korea

 

 

100.0

 

100.0

 

Shinhan LifeCare Co., Ltd.

 

 

 

100.0

 

100.0

 

Shinhan Life Insurance Vietnam Co., Ltd.

 

Vietnam

 

 

100.0

 

100.0

Shinhan Asset Management Co., Ltd.

 

SHINHAN ASSET MGT HK, LIMITED

 

Hong Kong

 

 

100.0

 

100.0

Shinhan DS

 

SHINHAN DS VIETNAM CO., LTD.

 

Vietnam

 

 

100.0

 

100.0

(*1) Subsidiaries such as trust, beneficiary certificate, special purpose company, partnerships and private equity fund which are not actually operating their own business are excluded.

(*2) The major assets were sold to Shinhan Bank, a subsidiary company, in January 2024, and the liquidation was completed after the distribution of remaining assets on July 15, 2024.

 

 

12

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

1. Reporting entity (continued)

 

(c) Consolidated structured entities

 

Consolidated structured entities are as follows:

 

Category

 

Consolidated structured entities

 

Description

 

 

 

 

 

Trust

 

Shinhan Bank (including development trust) and 17 others

 

A trust is consolidated when the Group as a trustee is exposed to significant variable returns, if principle or interest amounts of the entrusted properties falls below guaranteed amount, the Group should compensate it, and the Group has the ability to affect those returns.

Asset-Backed Securitization

 

 

Tiger Eyes 3 Co., Ltd. and 208 others

 

An entity for asset backed securitization is consolidated when the Group has sole decision-making authority to dispose assets or change the conditions of the assets, and the Group is substantially exposed to, or has rights to significant variable returns by providing credit enhancement and purchases of subordinated securities.

Structured Financing

 

-

 

An entity established for structured financing relating to real estate, shipping, or mergers and acquisitions is consolidated, when the Group has the greatest credit to the entity, has sole decision-making authority of these Entities due to the entities default, and is substantially exposed to, or has rights to significant variable returns.

Investment Fund

 

One Shinhan Future's Fund and 168 others

 

An investment fund is consolidated, when the Group manages or invests assets of the investment funds on behalf of other investors as a collective investor or a business executive, or has the ability to dismiss the manager of the investment funds, and is substantially exposed to, or has rights to, the significant variable returns.

 

13

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

1. Reporting entity (continued)

 

(d) Summarized financial information of the subsidiaries

 

i) The summarized financial information of the controlling company and the Group’s major consolidated subsidiaries as of June 30, 2024 and December 31, 2023 is as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Investees(*1)(*2)

 

Asset

balance

 

Liability

balance

 

Equity balance

 

Asset

balance

 

Liability

balance

 

Equity balance

Shinhan Financial Group(separate)

W  

38,331,775

 

11,228,140

 

27,103,635

 

37,289,554

 

11,190,413

 

26,099,141

Shinhan Bank

 

542,458,849

 

507,678,944

 

34,779,905

 

508,497,276

 

474,966,063

 

33,531,213

Shinhan Card Co., Ltd.

 

43,525,075

 

35,415,530

 

8,109,545

 

43,420,162

 

35,365,175

 

8,054,987

Shinhan Securities Co., Ltd.

 

52,392,490

 

46,866,806

 

5,525,684

 

52,497,500

 

47,131,211

 

5,366,289

Shinhan Life Insurance Co., Ltd.

 

58,620,607

 

51,346,683

 

7,273,924

 

58,641,345

 

50,218,211

 

8,423,134

Shinhan Capital Co., Ltd.

 

13,065,928

 

10,813,544

 

2,252,384

 

13,018,880

 

10,791,281

 

2,227,599

Jeju Bank

 

7,250,515

 

6,663,041

 

587,474

 

7,162,714

 

6,626,863

 

535,851

Shinhan Asset Management Co., Ltd.

 

450,145

 

153,463

 

296,682

 

409,246

 

134,030

 

275,216

SHC Management Co., Ltd.

 

10,182

 

-

 

10,182

 

10,051

 

-

 

10,051

Shinhan DS

 

121,115

 

64,384

 

56,731

 

137,141

 

85,417

 

51,724

Shinhan Savings Bank

 

2,915,061

 

2,552,809

 

362,252

 

3,046,110

 

2,696,597

 

349,513

Shinhan Asset Trust Co., Ltd.

 

617,736

 

315,620

 

302,116

 

463,445

 

85,555

 

377,890

Shinhan Fund Partners

 

112,134

 

19,708

 

92,426

 

110,849

 

20,136

 

90,713

Shinhan REITs Management Co., Ltd.

 

87,381

 

14,361

 

73,020

 

72,018

 

9,522

 

62,496

Shinhan AI Co., Ltd.

 

32,877

 

65

 

32,812

 

35,674

 

940

 

34,734

Shinhan Venture Investment Co., Ltd.

 

178,502

 

88,992

 

89,510

 

171,783

 

90,515

 

81,268

Shinhan EZ General Insurance, Ltd.

 

269,849

 

146,579

 

123,270

 

261,204

 

131,875

 

129,329

(*1) The summarized financial statements of the consolidated subsidiaries are based on consolidated financial statements, if applicable.

(*2) Trusts, beneficiary certificates, securitization special limited liability companies, associates and private equity investment specialists that are not actually operating their own business are excluded.

 

14

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

1. Reporting entity (continued)

 

ii) the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

Investees (*1),(*2)

 

Operating

income

 

Net

income

(loss) (*3)

 

Com-

prehensive

income

(loss) (*3)

 

Operating

income

 

Net

income

 (*3)

 

Com-

prehensive

income

(loss) (*3)

Shinhan Financial Group

(separate)

W

1,978,106

 

1,736,881

 

1,735,344

 

1,997,317

 

1,730,323

 

1,729,553

Shinhan Bank

 

23,849,116

 

2,053,795

 

2,385,580

 

20,129,193

 

1,680,697

 

2,044,901

Shinhan Card Co., Ltd.

 

3,069,040

 

380,796

 

369,924

 

2,665,925

 

317,604

 

301,149

Shinhan Investment Corp.

 

6,469,320

 

207,160

 

205,187

 

5,366,404

 

241,858

 

233,718

Shinhan Life Insurance

Co., Ltd.

 

3,589,718

 

312,907

 

(978,472)

 

3,387,237

 

311,682

 

544,971

Shinhan Capital Co., Ltd.

 

657,846

 

108,043

 

107,023

 

613,384

 

190,056

 

185,123

Jeju Bank

 

188,112

 

6,189

 

7,176

 

177,517

 

8,700

 

14,464

Shinhan Asset Management Co., Ltd.

 

155,267

 

45,852

 

45,866

 

70,195

 

14,479

 

14,464

SHC Management Co., Ltd.

 

-

 

131

 

131

 

-

 

164

 

164

Shinhan DS

 

151,645

 

3,354

 

5,008

 

143,428

 

3,696

 

2,276

Shinhan Savings Bank

 

131,433

 

12,467

 

12,739

 

137,983

 

16,993

 

17,055

Shinhan Asset Trust Co., Ltd.

 

53,980

 

(175,099)

 

(175,254)

 

74,897

 

38,327

 

38,151

Shinhan Fund Partners

 

33,626

 

7,810

 

7,810

 

30,840

 

5,030

 

5,030

Shinhan REITs Management
Co., Ltd.

 

16,264

 

10,526

 

10,524

 

4,995

 

864

 

860

Shinhan AI Co., Ltd.

 

-

 

(1,921)

 

(1,923)

 

5,243

 

(1,564)

 

(1,571)

Shinhan Venture Investment Co, Ltd.

 

30,632

 

8,122

 

8,242

 

12,472

 

2,261

 

2,288

Shinhan EZ General Insurance, Ltd.

 

39,019

 

(6,026)

 

(6,059)

 

18,836

 

(721)

 

(544)

(*1) The summarized financial statements of the consolidated subsidiaries are based on consolidated financial statements, if applicable.

(*2) Trusts, beneficiary certificates, securitization-specialized limited liability companies, associates and private equity investment specialists that are not actually operating their own business are excluded.

(*3) It includes non-controlling interest.

 

15

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

2. Basis of preparation

 

(a) Statement of compliance

 

The Group maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (K-IFRS). The accompanying consolidated interim financial statements have been condensed, restructured and translated into English from the Korean language financial statements.

 

The consolidated interim financial statements of the Group are prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”). These consolidated interim financial statements are prepared under K-IFRS 1034, ‘Interim Financial Reporting’ and contains less information than required in the annual consolidated financial statements. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as of and for the year ended December 31, 2023.

 

(b) Use of estimates and judgments

 

The preparation of the consolidated interim financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, incomes and expenses. When estimates and assumptions based on management's judgment as of the end of the interim reporting period differ from the actual circumstances, the related actual results may differ from these estimates.

 

Estimates and underlying assumptions about estimates are continually reviewed, and changes in accounting estimates are recognized for the period in which the estimates are changed and the period to be affected in the future. Income tax expense in the interim period is measured by applying the expected annual income tax rate, i.e. the estimated average annual effective income tax rate.

 

In preparing the consolidated interim financial statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as of and for the year ended December 31, 2023 except for the method of estimation used to determine the income tax expense for the interim period.

 

 

16

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

3. Material accounting policies

 

(a) The Group applies the same accounting policies applied as when preparing the annual consolidated financial statements for the year ended December 31, 2023, except for the following amendments that has been applied for the first time since January 1, 2024 and as described in Note 2. (b).

 

i) Amendment to K-IFRS No. 1001 'Presentation of Financial Statements' - Classification of Liabilities as Current or Non-current

 

The amendments clarify that the classification of liabilities as current or non-current should be based on the substantive rights existing at the end of the reporting period and that the classification is unaffected by management’s intentions or expectations about whether the company will exercise its right to defer settlement of a liability. The amendments also introduce a definition of settlement to make clear that settlement includes the transfer to the counterparty of the company's own equity instruments, however, it would be excluded if an option to settle the liability by the transfer of the company’s own equity instruments is recognized separately from the liability in compound financial instruments. There is no significant impact on the consolidated financial statements from these amendments.

 

ii) Amendments to K-IFRS No. 1007, ‘Cash Flow Statement’ and K-IFRS No. 1107 ‘Financial Instruments: Disclosures’ - Supplier Finance Arrangements

 

The amendments add to the disclosure objectives in K-IFRS 1007, ‘Cash Flow Statement,’ that information about supplier finance arrangements should be disclosed to enable users of financial statements to assess the impact of those arrangements on the Company’s liabilities and cash flows. The amendments also amend K-IFRS 1107, ‘Financial Instruments: Disclosures,’ to add supplier finance arrangements as an example of a requirement to disclose information about an entity’s exposure to concentrations of liquidity risk. There is no significant impact on the consolidated financial statements from these amendments.

 

iii) The following new and amended standards are not expected to have a significant impact on the consolidated financial statements.

- Lease Liability in a Sale and Leaseback (the K-IFRS 1116 'lease')

- Disclosure of Virtual Assets (the K-IFRS 1001 'Financial statement presentation')

 

 

(b) As of June 30, 2024, the newly enacted and disclosed but not yet effective new K-IFRS are as follows:

 

i) Amendment to K-IFRS No. 1021 'Effects of Changes in Foreign Exchange Rates' and No. 1101 ‘First-time adoption of K-IFRS’ – Lack of Exchangeability

 

These amendments define scenarios where exchanges with other currencies are considered possible for accounting purposes, clarify the assessment of exchangeability with other currencies, and specify requirements for estimating and disclosing the spot exchange rate in cases where no exchangeability exists. If exchange with other currencies is not possible, the spot exchange rate must be estimated on the measurement date using observable exchange rates without adjustment or employing alternative estimation techniques. These amendments are set for prospective application to fiscal years beginning on or after January 1, 2025, with early application permitted. Consolidated entities are currently assessing the impacts of these amendments on the consolidated financial statements.

 

17

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

4. Financial risk management

(a) Overview

 

Shinhan Financial Group Co., Ltd. (hereinafter referred to as the “Group”) manages various risks that may occur in each business sector and the major risks to which the Group is exposed include credit risk, market risk, interest rate risk, and liquidity risk. These risks are recognized, measured, controlled, and reported in accordance with risk management guidelines established by the controlling company and each subsidiary.

i) Risk management principles

 

The risk management principles of the Group are as follows:

 

- All sales activities should be carried out in consideration of the balance between risk and profit within the preset risk propensity.

-The controlling company presents the best practices for the group risk management, supervises compliance, and has responsibilities and authorities for monitoring at the group level.

- Operate a risk-related decision-making system that enhances management's involvement.

- Organize and operate risk management organizations independent of the business sector.

- Operate a performance management system that clearly considers risks when making business decisions.

- Aim for preemptive and practical risk management functions.

- Share a careful view to prepare for possible deterioration of the situation even in normal conditions.

 

ii) Risk management organization

 

The basic policies and strategies for risk management of the Group are established by the Risk Management Committee (hereinafter referred to as the "Group Risk Management Committee") within the controlling company's Board of Directors. The Group's Chief Risk Management Officer (CRO) assists the Group Risk Management Committee and consults the risk policies and strategies of the group and each subsidiary through the Group Risk Council, which includes the Chief Risk Management Officer of each subsidiary. The subsidiary implements the risk policies and strategies of the Group through each company's risk management committee, risk-related committee, and risk management organization, and consistently establishes and implements the detailed risk policies and strategies of the subsidiary. The risk management team of the controlling company assists the Group's Chief Risk Management Officer for risk management and supervision.

 

Shinhan Financial Group has a hierarchical limit system to manage the risks of the Group to an appropriate level. The Group Risk Management Committee sets the risk limits that can be affordable by the Group and each subsidiary, while the Risk Management Committee and the Committee of each subsidiary set and manage detailed risk limits by risk, department, desk, and product types.

 

 

 

18

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

4. Financial risk management (continued)

 

(a) Overview (continued)

 

ii) Risk management organization (continued)

 

ii-1) Group Risk Management Committee

 

The Group established the risk management system for the Group and each of its subsidiaries, and comprehensively manages group risk-related matters such as establishing risk policies, limits, and approvals. The Committee consists of directors of the Group.

 

The Committee's resolutions are as follows.

- Establish a basic risk management policy consistent with the management strategy.

- Determination of the level of risk that can be borne by the group and each subsidiary

- Approve the appropriate investment limit or loss allowance limit

- Establishment and revision of group risk management regulations and group risk council regulations

- Matters concerning risk management organizational structure and division of duties.

- Matters concerning the operation of the risk management system.

- Matters concerning the establishment of various limits and approval of excess limits

- Decisions related to the approval of the group's internal rating law for non-retail and retail credit rating systems by the Financial Supervisory Service

- Matters concerning risk disclosure policy

- Results of crisis situation analysis and related capital management plans and financing plans

- Matters deemed necessary by the board of directors

- Matters required by external regulations such as the Financial Services Commission, and matters prescribed by other regulations, guidelines, etc.

- Matters deemed necessary by the Chairperson
 

The resolution of the Group Risk Management Committee is reported to the Board of Directors.

 

ii-2) Group Risk Management Council


In order to maintain the Group's risk policies and strategies consistently, discuss all risk-related matters of the Group and make resolutions on matters necessary to implement the policies prescribed by the Group Risk Management Committee. The members shall be chaired by the risk management officer of the group and shall be comprised of the risk management officer of the major subsidiaries.

 

iii) Group risk management framework

 

iii-1) Risk Capital Management

 

Risk capital refers to the capital required to compensate for losses in case of a potential risk being realized. Risk capital management refers to the management of the risk assets considering its risk appetite, which is a datum point on the level of risk burden compared to available capital, so as to maintain the risk capital at an appropriate level. The Group and its subsidiaries establish and operate a risk planning process to reflect the risk plan in advance when establishing financial and business plans for risk capital management and a risk limit management system to control risk to an appropriate level.

 

19

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

4. Financial risk management (continued)

 

(a) Overview (continued)

 

iii) Group Risk Management System (continued)

iii-2) Risk monitoring

The Group proactively manages risks by periodically identifying risk factors that may affect the Group’s business environment, through a multidimensional risk monitoring system. Each subsidiary is required to report to the Company any factors that could have a material impact on the group-level risk management, and the Company prepares weekly, monthly and occasional monitoring reports to the Group management including the CRO.

 

In addition, the Group performs preemptive risk management through a “Risk Dashboard” under which the Group closely monitors any increase in asset size, risk levels and sensitivity to external factors with respect to the major asset portfolios of each subsidiary, and to the extent such monitoring yields any warning signals, the Group promptly analyze the causes and, if necessary, formulates and implements actions in response to these warning signals.

iii-3) Risk review

When promoting new products or new businesses and changing major policies, risk factors are reviewed by a pre-defined checklist to block reckless promotion of businesses that are not easy to judge risks and support rational decision-making. The risk management departments of all subsidiaries are required to review all new businesses, products and services prior to their launch and closely monitor the development of any related risks following, should there be any action that involves more than one subsidiary, the relevant risk management departments are required to consult with the risk management team at the controlling company level prior to making any independent risk reviews.

 

iii-4) Crisis management

 

The Group maintains a group-wide risk management system by detecting signals of any risk crisis to respond on a timely, efficient and flexible manner, thereby ensuring the Group’s sustainability. Each subsidiary maintains crisis planning for four levels of contingencies, namely, “cautious’, “alert”, “imminent crisis” and “crisis”, determination of which are based on quantitative and qualitative monitoring and consequence analysis, Under circumstance of any such contingencies, each subsidiary is required to respond according to a prescribed contingency plan. At the controlling company level, the Group establishes and maintains a system that can detect and respond to crisis, consistent group-wide. The Group directly gets involved in a situation when deemed necessary, such as two or more subsidiaries entering into ‘cautious’ level.

 

20

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

4. Financial risk management (continued)

 

(b) Credit risk

 

Credit risk is the risk of potential economic loss that may be caused if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and is the largest risk which the Group is facing. The Group’s credit risk management encompasses all areas of credit that may result in potential economic loss, including not just transactions that are recorded on balance sheets, but also off-balance-sheet transactions such as guarantees, loan commitments and derivative transactions.

 

Shinhan Bank's basic policy on credit risk management is determined by the Risk Policy Committee. The Risk Policy Committee consists of the CRO as the chairman, the Chief Credit Officer (CCO), the head of the business group, and the head of the risk management department. The committee decides the credit risk management plan and the direction of the loan policy for the entire bank. Apart from the Risk Policy Committee, the Credit Review Committee is established to separate credit monitoring, such as large loans and limit approval, and is composed of chairman, the CCO, CRO and the head of the Group in charge of the credit-related business group, the head of the credit planning department, and the senior examination team to enhance the credit quality of the loan and profitability of operation.

 

Shinhan Bank's credit risk management includes processes such as credit evaluation, credit monitoring, and credit supervision. Moreover, measuring credit risk and managing limit for portfolios are included in the process. All loan customers of Shinhan Bank are evaluated and managed with credit ratings. Retail customers are evaluated by summing up the personal information, the bank's internal information and external credit information, and the corporate customers are evaluated by considering financial and non-financial items such as industrial risk, operating risk, and management risk. The evaluated credit rating is used for credit approval, limit management, pricing, credit loss provisioning, etc., and is the basis for credit risk management. The credit evaluation system is divided into an evaluation system for retail customers, a SOHO evaluation system, and an evaluation system for corporate customers. It is subdivided and refined by each model to reflect the Basel III requirements. The corporate credit decision is based on a collective decision-making system, making objective and prudent decisions. In the case of a general credit of loans, the credit is approved based on the consultation between branch’s RM (Relationship Manager) and loan officers of each business division’s headquarters. In the case of a large or important credit, the credit is approved by the review council. In particular, the Credit Deliberation Committee, the highest decision-making body of the loan, reviews for important loans such as large loans. Credits for retail customers are monitored by an automated credit scoring system (CSS) based on objective statistical methods and bank credit policies.

 

The Bank operates a regular monitoring system for the regular management of individual loans. The loan officers and RM evaluate the adequacy of the result of the loan review by automatically searching for anticipated insolvent companies among business loan partners, and if necessary, the credit rating of the corporate is requested for an adjustment. In accordance with these procedures, the corporate customers are classified as an early warning company, an observation company, and a normal company, and then are managed differently according to the management guidelines for each risk stage, thereby preventing the insolvency of the loan at an early stage. The financial analysis support system affiliated with a professional credit rating agency supports credit screening and management, and the credit planning department calculates and manages industrial grades and analyzes and provides industry trends and company information. In order to control the credit risk for the credit portfolio to an appropriate level, credit VaR limits are set and managed for each business and business sector, and to prepare for the credit risk caused by biased exposure to specific sectors, the Group sets and manages exposure limits for each sector by the party, industry, country, etc.

 

Shinhan Card's basic policy on credit risk is determined by the Risk Management Committee. The Risk Management Committee consists of the Risk Management Officer (CRO) as the chairman, the head of each business division and supporting division, and the head of the related departments. Apart from the RMC, the credit committee in charge of monitoring corporate credits and other important credits over a certain amount has been established to credit policy decisions, separate from credit monitoring.

 

Shinhan Card’s credit rating system is divided into ASS(Application Scoring System) and BSS(Behavior Scoring System). Unless a customer falls under “rejections due to policy” (such circumstances include delinquency of other credit card companies) and his/her credit rating is above a certain rate, an application of AS is approved. There is a separate screening criterion for credit card customers, who has maintained its relationship with Shinhan Financial Group for a long-term and has a good credit history. In addition, the elements of credit ratings are used as the basis for setting limits when issuing cards. The BSS, which is recalculated monthly, predicts the delinquency probability of cardholders, and utilizes it to monitor members and portfolio risk.

 

21

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

4. Financial risk management (continued)

 

(b) Credit risk

 

i) Techniques, assumptions, and input variables used to measure impairment

 

i-1) Determining significant increases in credit risk since initial recognition

 

At the end of each reporting period, the Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group uses the change in the risk of default over the expected life of the financial instrument instead of the change in the amount of expected credit losses.

 

To make the assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, available without undue cost or effort and indicative of significant increases in credit risk since initial recognition. Information includes the default experience data held by the Group and analysis by an internal credit rating expert.

 

i-1-1) Measuring the risk of default

 

The Group assigns an internal credit risk rating to each individual exposure based on observable data and historical experiences that have been found to have a reasonable correlation with the risk of default. The internal credit risk rating is determined by considering both qualitative and quantitative factors that indicate the risk of default, which may vary depending on the nature of the exposure and the type of borrower.

 

i-1-2) Measuring term structure of probability of default

 

Internal credit risk rating is the main variable input to determine the duration structure for the risk of default. The Group accumulates information after analyzing the information regarding exposure to credit risk and default information by the type of product and borrower and results of internal credit risk assessment. For some portfolios, the Group uses information obtained from external credit rating agencies when performing these analyses.

 

The Group applies statistical techniques to estimate the probability of default for the remaining life of the exposure from the accumulated data and to estimate changes in the estimated probability of default over time.

22

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

4. Financial risk management (continued)

 

(b) Credit risk (continued)

 

i) Techniques, assumptions, and input variables used to measure impairment (continued)

 

i-1-3) Significant increases in credit risk

 

The Group uses the indicators defined as per portfolio to determine the significant increase in credit risk and such indicators generally consist of changes in the risk of default estimated from changes in the internal credit risk rating, qualitative factors, days of delinquency, and others. The method used to determine whether credit risk of financial instruments has significantly increased since the initial recognitions is summarized as follows:

 

Corporate exposures

 

Retail exposures

 

Card exposures

 

 

 

 

 

Significant change in credit ratings

 

Significant change in credit ratings

 

Significant change in credit ratings

Continued past due more than 30 days

 

Continued past due more than 30 days

 

Continued past due more than 7 days (personal card)

Loan classification of precautionary or below

 

Loan classification of precautionary or below

 

Loan classification precautionary or below

Borrower with early warning signals

 

Borrower with early warning signals

 

Specific delinquent pool segment

Negative net assets

 

Specific pool segment

 

 

Adverse audit opinion or disclaimer of opinion

 

Collective loans for housing for which the constructors are insolvent

 

 

Interest coverage ratio below 1 for a consecutive period of three years or negative cash flows from operating activities for a consecutive period of two years

 

Loans with identified indicators for significant increases in other credit risk

 

 

 

 

Loans with identified indicators for significant increases in other credit risk

 

 

 

 

 

The Group assumes that the credit risk of the financial instrument has been increased significantly since initial recognition if a specific exposure is past due more than 30 days (except, for a specific portfolio if it is past due more than 7 days). The Group counts the number of days past due from the earliest date on which the Group fails to fully receive the contractual payments from the borrower and does not take into account the grace period granted to the borrower.

 

The Group regularly reviews the criteria for determining if there have been significant increases in credit risk from the following perspective:

 

- A significant increase in credit risk shall be identified prior to the occurrence of default.

- The criteria established to judge the significant increase in credit risk shall have a more predictive power than the criteria for days of delinquency.

- As a result of applying the judgment criteria, there should be no excessively frequent movement between the 12-month expected credit loss accumulation target and the entire period expected credit loss accumulation target.

 

23

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

4. Financial risk management (continued)

 

(b) Credit risk (continued)

 

i) Techniques, assumptions, and input variables used to measure impairment (continued)

 

i-2) Modified financial assets

 

If the contractual cash flows on a financial asset have been modified through renegotiation and the financial asset is not derecognized, the Group assesses whether there has been a significant increase in the credit risk of the financial instrument by comparing the risk of a default occurring at initial recognition based on the original, unmodified contractual terms and the risk of a default occurring at the reporting date based on the modified contractual terms.

 

The Group may adjust the contractual cash flows of loans to customers who are in financial difficulties in order to manage the risk of default and enhance the collectability (hereinafter referred to as ‘debt restructuring’). These adjustments generally involve extension of maturity, changes in interest payment schedule, and changes in other contractual terms.

 

Debt restructuring is a qualitative indicator of a significant increase in credit risk, and the Group recognizes lifetime expected credit losses for the exposure expected to be the subject of such adjustments. If a borrower faithfully makes payments of contractual cash flows that are modified in accordance with the debt restructuring or if the borrower's internal credit rating has recovered to the level prior to the recognition of the lifetime expected credit losses, the Group recognizes the 12-month expected credit losses for that exposure again.

 

i-3) Risk of default

 

The Group considers a financial asset to be in default if it meets one or more of the following conditions:

 

- If a borrower is overdue 90 days or more from the contractual payment date

- If the Group judges that it is not possible to recover principal and interest without enforcing the collateral on a financial asset

 

The Group uses the following indicators when determining whether a borrower is in default:

 

- Qualitative factors (e.g. breach of contractual terms)

- Quantitative factors (e.g. if the same borrower does not perform more than one payment obligations to the Group, the number of days past due per payment obligation. However, in the case of a specific portfolio, the Group uses the number of days past due for each financial instrument)

- Internal observation data and external data

 

The definition of default applied by the Group generally conforms to the definition of default defined for regulatory capital management purposes; however, depending on the situations, the information used to determine whether a default has occurred, and the extent thereof may vary.

 

 

24

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

4. Financial risk management (continued)

 

(b) Credit risk (continued)

 

i) Techniques, assumptions and input variables used to measure impairment (continued)

 

i-4) Reflection of forward-looking information

 

The Group reflects future forward-looking information presented by a group of internal experts based on various information when measuring expected credit losses. The Group utilizes economic forecasts disclosed by domestic and foreign research institutes, governments, and public institutions to predict forward-looking information.

 

The Group reflects future macroeconomic conditions anticipated from a neutral standpoint that is free from bias in measuring expected credit losses. Expected credit losses in this respect reflect conditions that are most likely to occur and are based on the same assumptions that the Group used in its business plan and management strategy.

 

The Group analyzed the data experienced in the past, derived correlations between major macroeconomic variables and credit risks required for predicting credit risk and credit loss for each portfolio, and then reflected forward looking information through regression estimation. To reflect internal and external economic uncertainties, the Group reviewed not only the existing 3 scenarios (‘upside’, ‘central’, and ‘downside’) but also an additional scenario, the ‘worst’ scenario for final forward-looking information.

 

Major macroeconomic variables

 

Correlation between credit risks

 

 

 

GDP growth rate

 

(-)

Private consumption index growth rate

 

(-)

Index of equipment investment growth rate

 

(-)

Consumer price index growth rate

 

(+)

Balance on current account

 

(-)

 

The predicted correlation between the macroeconomic variables used by the consolidated entity and the risk of default has been derived based on long-term data over the past ten years.

 

25

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

 

4. Financial risk management (continued)

 

(b) Credit risk (continued)

 

i) Techniques, assumptions, and input variables used to measure impairment (continued)

 

i-5) Measurement of expected credit losses

 

Key variables used in measuring expected credit losses are as follows:

 

- Probability of default (“PD”)

- Loss given default (“LGD”)

- Exposure at default (“EAD”)

 

These variables have been estimated from historical experience data by using the statistical techniques developed internally by the Group and have been adjusted to reflect forward-looking information.

 

Estimates of PD over a specified period are estimated by reflecting characteristics of counterparties and their exposure, based on a statistical model at a specific point of time. The Group uses its own information to develop a statistical credit assessment model used for the estimation, and additional information observed in the market is considered for some portfolios such as a group of large corporates. When a counterparty or exposure is concentrated in specific grades, the method of measuring PD for those grades would be adjusted, and the PD by grade is estimated by considering contract expiration of the exposure.

 

LGD refers to the expected loss if a borrower defaults. The Group calculates LGD based on the experience recovery rate measured from past default exposures. The model for measuring LGD is developed to reflect type of collateral, seniority of collateral, type of borrower, and cost of recovery. In particular, LGD for retail loan products uses loan to value (LTV) as a key variable. The recovery rate reflected in the LGD calculation is based on the present value of recovery amount, discounted at the effective interest rate.

 

EAD refers to the expected exposure at the time of default. The Group derives EAD reflecting a rate at which the current exposure is expected to be used additionally up to the point of default within the contractual limit. EAD of financial assets is equal to the total carrying value of the asset, and EAD of loan commitments or financial guarantee contracts is calculated as the sum of the amount expected to be used in the future.

 

In measuring expected credit losses on financial assets, the Group uses the contractual maturity as the period subject to expected credit loss measurement. The contractual maturity is computed considering the extension right held by the borrower.

 

Risk factors of PD, LGD and EAD are collectively estimated according to the following criteria:

 

- Type of products

- Internal credit risk rating

- Type of collateral

- Loan to value (“LTV”)

- Industry that the borrower belongs to

- Location of the borrower or collateral

- Days of delinquency

 

The criteria for classifying groups are periodically reviewed to maintain homogeneity of the group and adjusted if necessary. The Group uses external benchmark information to supplement internal information for a particular portfolio that did not have sufficient internal data accumulated from the past experience.

 

 

26

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2023 and 2022(Unaudited), and December 31, 2022

(In millions of won)

 

4. Financial risk management (continued)

 

(b) Credit risk (continued)

 

i) Techniques, assumptions and input variables used to measure impairment (continued)

 

i-6) Write-off of financial assets

 

The Group writes off a portion of or entire loan or debt security that is not expected to receive its principal and interest. In general, the Group conducts write-off when it deems that the borrower has no sufficient resources or income to repay the principal and interest. Such determination on write-off is carried out in accordance with the internal rules of the Group and with the approval of an external institution, if necessary. Apart from write-off, the Group may continue to exercise its right of collection under its own recovery policy even after the write-off of financial assets.

 

ii) Maximum exposure to credit risk

 

Exposure to credit risk is the exposure related to due from banks, loans, investments in debt securities, derivative transactions, off-balance sheet accounts such as loan commitment. The exposures of due from banks and loans are classified into government, bank, corporation or retail based on the exposure classification criteria of BASEL III credit risk weights, and the net carrying value, excluding provisions, is presented as the maximum amount that can be exposed by credit risk.

 

The Group’s maximum exposure to credit risk without considering of any collateral held or other credit enhancements as of June 30, 2024 and December 31, 2023 is as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Due from banks and loans at amortized cost(*1),(*3):

 

 

 

 

Banks

W

13,764,579

 

15,099,247

Retail

 

191,543,084

 

177,454,344

Government/Public sector/Central bank

 

23,854,398

 

21,981,065

Corporations

 

211,600,562

 

202,763,657

Card receivables

 

26,439,415

 

26,896,950

 

 

467,202,038

 

444,195,263

 

 

 

 

 

Due from banks and loans at fair value through profit or loss(*3):

 

 

 

 

 Banks

 

131,839

 

238,740

 Corporations

 

1,354,405

 

1,550,565

 

 

1,486,244

 

1,789,305

 

 

 

 

 

Securities at fair value through profit or loss

 

69,254,661

 

65,575,798

Securities at fair value through other comprehensive income

 

87,074,207

 

88,637,000

Securities at amortized cost(*1)

 

36,007,704

 

35,686,487

Derivative assets

 

6,317,567

 

4,711,421

Other financial assets(*1),(*2)

 

35,402,536

 

26,880,554

Guarantee contracts

 

22,065,542

 

18,374,287

Loan commitments and other credit liabilities

 

218,735,816

 

212,078,870

 

W

943,546,315

 

897,928,985

(*1) The maximum exposure amount of due from banks and loans at amortized cost, securities at amortized cost and other financial assets are recorded as net of allowances.

(*2) Other financial assets mainly consist of receivables, accrued income, secured deposits, prepayment and uncollected domestic exchange settlement.

(*3) Classified as similar credit risk group based on calculation of the BIS ratio under new Basel Capital Accord (Basel III).

 

27

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

4. Financial risk management (continued)

 

(b) Credit risk (continued)

 

iii) Impairment information by credit risk of financial assets

 

Details of impaired financial assets due to credit risk as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

12-month expected credit loss

 

Lifetime expected credit loss

 

Total

 

Allowances

 

Net

 

Mitigation of credit risk

  due to collateral

 

 

Grade 1

 

Grade 2

 

Grade 1

 

Grade 2

 

Impaired

 

 

 

 

 

 

 

 

Due from banks and loans at amortized cost:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Banks

W

10,737,793

 

2,595,050

 

457,473

 

7,027

 

-

 

13,797,343

 

(32,764)

 

13,764,579

 

29,252

 Retail

 

168,167,204

 

6,634,615

 

12,756,531

 

3,748,873

 

1,190,231

 

192,497,454

 

(954,370)

 

191,543,084

 

141,613,638

 Government/Public sector/

Central bank

 

21,119,435

 

2,656,954

 

81,883

 

357

 

-

 

23,858,629

 

(4,231)

 

23,854,398

 

2,500

 Corporations

 

117,502,744

 

51,280,164

 

18,994,053

 

24,445,497

 

1,723,928

 

213,946,386

 

(2,345,824)

 

211,600,562

 

113,663,135

 Card receivable

 

20,404,843

 

2,636,032

 

1,490,108

 

2,388,975

 

625,938

 

27,545,896

 

(1,106,481)

 

26,439,415

 

20,038

 

 

337,932,019

 

65,802,815

 

33,780,048

 

30,590,729

 

3,540,097

 

471,645,708

 

(4,443,670)

 

467,202,038

 

255,328,563

Securities at fair value through other comprehensive income (loss) (*)

 

79,250,189

 

7,722,718

 

20,020

 

81,280

 

-

 

87,074,207

 

-

 

87,074,207

 

-

Securities at amortized cost

 

33,895,405

 

2,115,700

 

-

 

7,622

 

-

 

36,018,727

 

(11,023)

 

36,007,704

 

-

 

W

451,077,613

 

75,641,233

 

33,800,068

 

30,679,631

 

3,540,097

 

594,738,642

 

(4,454,693)

 

590,283,949

 

255,328,563

 

28

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

4. Financial risk management (continued)

 

(b) Credit risk (continued)

 

iii) Impairment information by credit risk of financial assets (continued)

 

Details of impaired financial assets due to credit risk as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

 

 

12-month expected credit loss

 

Lifetime expected credit loss

 

Total

 

Allowances

 

Net

 

Mitigation of credit risk

  due to collateral

 

 

Grade 1

 

Grade 2

 

Grade 1

 

Grade 2

 

Impaired

 

 

 

 

 

 

 

 

Due from banks and loans at amortized cost:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Banks

W

12,465,770

 

2,260,226

 

392,061

 

80

 

-

 

15,118,137

 

(18,890)

 

15,099,247

 

39,768

 Retail

 

158,067,855

 

6,429,281

 

8,934,566

 

3,839,919

 

1,054,827

 

178,326,448

 

(872,104)

 

177,454,344

 

122,490,514

 Government/Public sector/

Central bank

 

20,226,305

 

1,680,151

 

82,000

 

2,952

 

-

 

21,991,408

 

(10,343)

 

21,981,065

 

2,500

 Corporations

 

118,154,965

 

46,714,178

 

16,503,560

 

22,375,111

 

1,312,424

 

205,060,238

 

(2,296,581)

 

202,763,657

 

113,085,005

 Card receivable

 

20,593,023

 

2,701,607

 

1,507,605

 

2,602,802

 

645,604

 

28,050,641

 

(1,153,691)

 

26,896,950

 

14,382

 

 

329,507,918

 

59,785,443

 

27,419,792

 

28,820,864

 

3,012,855

 

448,546,872

 

(4,351,609)

 

444,195,263

 

235,632,169

Securities at fair value through other comprehensive income (loss) (*)

 

78,098,959

 

10,446,092

 

-

 

91,949

 

-

 

88,637,000

 

-

 

88,637,000

 

-

Securities at amortized cost

 

33,585,503

 

2,104,884

 

-

 

7,523

 

-

 

35,697,910

 

(11,423)

 

35,686,487

 

-

 

W

441,192,380

 

72,336,419

 

27,419,792

 

28,920,336

 

3,012,855

 

572,881,782

 

(4,363,032)

 

568,518,750

 

235,632,169

(*) Credit loss allowance recognized as other comprehensive income of securities at fair value through other comprehensive income amounted to W 31,591 million and W 42,477 million as of June 30, 2024 and December 31, 2023.

29

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(b) Credit risk (continued)

 

iv) Credit risk exposures per credit grade of off-balance items

 

Credit risk exposures per credit grade of off-balance items as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

Grade 1

 

Grade 2

 

Impaired

 

Total

Financial guarantee:

 

 

 

 

 

 

 

 

12-month expected credit loss

W

18,582,473

 

3,017,330

 

-

 

21,599,803

Lifetime expected credit loss

 

339,315

 

105,020

 

-

 

444,335

Impaired

 

-

 

-

 

21,404

 

21,404

 

 

18,921,788

 

3,122,350

 

21,404

 

22,065,542

Loan commitment and
other credit line

 

 

 

 

 

 

 

 

12-month expected credit loss

 

184,590,850

 

20,618,466

 

-

 

205,209,316

Lifetime expected credit loss

 

10,463,020

 

3,058,689

 

-

 

13,521,709

Impaired

 

-

 

-

 

4,791

 

4,791

 

 

195,053,870

 

23,677,155

 

4,791

 

218,735,816

 

W

213,975,658

 

26,799,505

 

26,195

 

240,801,358

 

 

 

December 31, 2023

 

 

Grade 1

 

Grade 2

 

Impaired

 

Total

Financial guarantee:

 

 

 

 

 

 

 

 

12-month expected credit loss

W

15,112,974

 

2,578,086

 

-

 

17,691,060

Lifetime expected credit loss

 

513,229

 

168,287

 

-

 

681,516

Impaired

 

-

 

-

 

1,711

 

1,711

 

 

15,626,203

 

2,746,373

 

1,711

 

18,374,287

Loan commitment and
other credit line

 

 

 

 

 

 

 

 

12-month expected credit loss

 

181,662,271

 

19,763,504

 

-

 

201,425,775

Lifetime expected credit loss

 

7,510,601

 

3,138,342

 

-

 

10,648,943

Impaired

 

-

 

-

 

4,152

 

4,152

 

 

189,172,872

 

22,901,846

 

4,152

 

212,078,870

 

W

204,799,075

 

25,648,219

 

5,863

 

230,453,157

 

 

v) Credit qualities are classified based on the internal credit rating as follows:

 

Type of Borrower

 

Grade 1

 

Grade 2

Individuals

 

Probability of default below 2.25% for each pool

 

Probability of default 2.25% or above for each pool

Government/Public sector/Central bank

 

OECD sovereign credit rating of 6 or above

 

OECD sovereign credit rating of below 6

Banks and Corporations

(including credit card bond)

 

Internal credit rating of BBB+ or above

 

Internal credit rating of below BBB+

Card receivables (individuals)

 

 

Behavior scoring system of grade 7 or above

 

Behavior scoring system of below grade 7

 

30

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(b) Credit risk (continued)

 

vi) Concentration by industry sector

 

Analyses of concentration by industry sector of financial instrument, net of allowance, as of June 30, 2024 and December 31, 2023 are as follows:

 

 

June 30, 2024

Classification(*)

 

Finance and insurance

 

Manu

-facturing

 

Retail and wholesale

 

Real estate and business

 

Construction service

 

Hospitality and Restaurant

 

Other

 

Retail

customers

 

Total

Due from banks and loans at amortized cost:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Banks

W

13,114,275

 

-

 

-

 

-

 

-

 

-

 

650,304

 

-

 

13,764,579

 Retail

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

191,543,084

 

191,543,084

 Government/Public sector/Central bank

 

23,651,070

 

-

 

-

 

-

 

-

 

-

 

203,328

 

-

 

23,854,398

 Corporations

 

21,090,810

 

62,153,420

 

23,118,543

 

46,706,283

 

5,335,306

 

6,494,401

 

46,701,799

 

-

 

211,600,562

 Card receivable

 

56,814

 

272,617

 

291,631

 

66,390

 

46,435

 

19,465

 

1,075,016

 

24,611,047

 

26,439,415

 

 

57,912,969

 

62,426,037

 

23,410,174

 

46,772,673

 

5,381,741

 

6,513,866

 

48,630,447

 

216,154,131

 

467,202,038

Due from banks and loans at FVTPL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Banks

 

32,769

 

-

 

-

 

-

 

99,070

 

-

 

-

 

-

 

131,839

 Corporations

 

939,908

 

172,711

 

107,377

 

112,058

 

-

 

-

 

22,351

 

-

 

1,354,405

 

 

972,677

 

172,711

 

107,377

 

112,058

 

99,070

 

-

 

22,351

 

-

 

1,486,244

Securities at fair value through profit or loss

 

35,347,232

 

3,974,812

 

1,504,982

 

1,780,250

 

58,596

 

77,086

 

26,511,703

 

-

 

69,254,661

Securities at fair value through other comprehensive income

 

30,436,916

 

2,570,928

 

762,494

 

1,718,943

 

1,747,808

 

2,275

 

49,834,843

 

-

 

87,074,207

Securities at amortized cost

 

11,822,483

 

39,962

 

-

 

510,341

 

161,053

 

-

 

23,473,865

 

-

 

36,007,704

 

 

136,492,277

 

69,184,450

 

25,785,027

 

50,894,265

 

7,448,268

 

6,593,227

 

148,473,209

 

216,154,131

 

661,024,854

Off-balance accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Guarantees

 

3,825,230

 

11,223,216

 

3,431,582

 

110,428

 

180,041

 

83,604

 

2,932,422

 

279,019

 

22,065,542

Loan commitments and other liabilities related to credit

 

18,762,863

 

33,136,828

 

10,616,298

 

4,541,177

 

2,321,083

 

418,630

 

19,265,326

 

129,673,611

 

218,735,816

 

W

22,588,093

 

44,360,044

 

14,047,880

 

4,651,605

 

2,501,124

 

502,234

 

22,197,748

 

129,952,630

 

240,801,358

 

31

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(b) Credit risk (continued)

 

vi) Concentration by industry sector (continued)

 

Analyses of concentration by industry sector of financial instrument, net of allowance, as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

December 31, 2023

Classification(*)

 

Finance and insurance

 

Manu

-facturing

 

Retail and wholesale

 

Real estate and business

 

Construction service

 

Hospitality and Restaurant

 

Other

 

Retail

customers

 

Total

Due from banks and loans at amortized cost:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Banks

W

14,677,168

 

-

 

-

 

-

 

-

 

-

 

422,079

 

-

 

15,099,247

 Retail

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

177,454,344

 

177,454,344

 Government/Public sector/Central bank

 

21,767,450

 

-

 

-

 

-

 

-

 

-

 

213,615

 

-

 

21,981,065

 Corporations

 

17,974,146

 

58,338,956

 

23,517,815

 

47,301,730

 

4,823,554

 

6,730,886

 

44,076,570

 

-

 

202,763,657

 Card receivable

 

56,507

 

276,256

 

284,905

 

71,169

 

45,769

 

19,810

 

948,359

 

25,194,175

 

26,896,950

 

 

54,475,271

 

58,615,212

 

23,802,720

 

47,372,899

 

4,869,323

 

6,750,696

 

45,660,623

 

202,648,519

 

444,195,263

Due from banks and loans at FVTPL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Banks

 

30,743

 

-

 

-

 

49,526

 

99,043

 

-

 

59,428

 

-

 

238,740

 Corporations

 

1,037,896

 

235,232

 

105,890

 

70,716

 

-

 

1,000

 

99,831

 

-

 

1,550,565

 

 

1,068,639

 

235,232

 

105,890

 

120,242

 

99,043

 

1,000

 

159,259

 

-

 

1,789,305

Securities at fair value through profit or loss

 

35,228,859

 

3,211,188

 

1,175,495

 

1,308,223

 

98,864

 

68,630

 

24,484,539

 

-

 

65,575,798

Securities at fair value through other comprehensive income

 

30,283,670

 

2,934,740

 

734,170

 

1,698,290

 

1,774,505

 

31,055

 

51,180,570

 

-

 

88,637,000

Securities at amortized cost

 

11,514,420

 

9,961

 

-

 

354,906

 

284,080

 

-

 

23,523,120

 

-

 

35,686,487

 

 

132,570,859

 

65,006,333

 

25,818,275

 

50,854,560

 

7,125,815

 

6,851,381

 

145,008,111

 

202,648,519

 

635,883,853

Off-balance accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Guarantees

 

2,518,182

 

9,139,168

 

3,504,409

 

119,573

 

152,112

 

60,077

 

2,601,841

 

278,925

 

18,374,287

Loan commitments and other liabilities related to credit

 

17,773,113

 

32,356,393

 

10,328,099

 

4,715,541

 

2,471,645

 

428,695

 

17,788,097

 

126,217,287

 

212,078,870

 

W

20,291,295

 

41,495,561

 

13,832,508

 

4,835,114

 

2,623,757

 

488,772

 

20,389,938

 

126,496,212

 

230,453,157

(*) The composition details by industry are net book value less allowances.

32

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(c) Market risk

 

i) Market risk management from trading positions

 

i-1) Concept of market risk

 

Market risk is defined as the risk of loss of trading account position of financial institutions due to changes on market price, such as interest rates, exchange rates and stock prices, etc. and is divided into general market risks and individual risks. A general market risk refers to a loss from price variability caused by events affecting the market as a whole, such as interest rates, exchange rates and stock prices; and an individual risk refers to a loss from price variability related to individual events of securities issuer, such as bonds and stocks.

 

i-2) Market risk management method

 

The basic principle of market risk management in the trading sector is to maintain the maximum possible loss due to market risk within a certain level. To this end, the Group sets and operates VaR limits, investment limits, position limits, sensitivity limits, and loss limits from the portfolio to individual desks. These limits are managed daily by the department in charge of risk management, independent of the operating department.

 

Trading positions refer to all transactions holding for short-term resale, arbitrage through short-term price changes, risk-free arbitrage, and risk hedging. Securities, foreign exchange position, and derivatives are included mainly as trading position. As a method of measuring market risk, VaR (Value at Risk) is typical, and it is a statistical measurement of the potential maximum loss that can occur due to changes in market conditions. VaR calculates the standard method market risk using the Group Market Risk Measurement System, and Shinhan Bank calculates the standard method market risk using its own model market risk calculation system. Shinhan Financial Investment uses its own market risk calculation system to calculate historical simulation VaR and the group market risk system to calculate standard method market risk.

 

Stress tests are conducted to supplement risk measurement by statistical methods and to manage losses that may arise from rapid changes in the economic environment.

 

Shinhan Bank measures the risk of trading account products by applying market risk standard methods. The trading account calculates market risk if it is for holding purposes such as short-term resale, profit seeking through short-term price fluctuations, risk-free arbitrage, and risk hedging. The standard method is a risk calculation method proposed by Basel Board of Banking Supervisors (BCBS) of Bank for International Settlements (BIS), Korea has reflected the Basel 3 standards of market risk sector to the detailed regulations on supervision of bank business from FY23 and followed these regulations. The standard method of the Basel 3 standards is the method to calculate and add up sensitivity risk, bankruptcy risk, and residual risk. Sensitivity risk measures delta, vega, and coverage of general interest rates, credit spreads, stocks, general products, and foreign exchange. Delta refers to the change in product value due to changes in the price of the underlying asset, and vega refers to the change in product value due to changes in the volatility of the underlying asset. Coverage is defined as a loss that exceeds the delta risk in the event of an upward or downward shock to the underlying asset. Sensitivity risk is designed to measure both linear and non-linear risks of factors affecting value fluctuations regardless of the characteristics of the product. Default risk measures the discrete default risk of the underlying asset that cannot be captured in sensitivity risk. Complete offsetting between purchase and sale exposures of the same borrower is possible. Residual risk is a concept that calculates additional risk because sensitivity risk and default risk are not accurately measured when there is a special profit/loss structure, or the underlying asset is special.

 

Trading position data such as transactions holding for short-term resale, arbitrage through short-term price changes, risk-free arbitrage, risk hedging is automatically interfaced into measurement system. The system conducts VaR measurement and manages the limit. In addition, Shinhan Bank sets loss limit, sensitivity limit, investment limit, stress limit, etc. for the trading department and desks, and monitors daily.

 

33

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(c) Market risk(continued)

 

i) Market risk management from trading positions(continued)

 

i-2) Market risk management method(continued)

 

Shinhan Investment measures daily market risk by applying historical simulation VaR method of 99.9% confidence level-based VaR. It also measures market risk standard methods to ensure consistent market risk management at the group level. Historical simulation VaR method does not require assumption on a particular distribution since the method derives scenarios directly from historical market data, and measures non-linear products, such as options, in details. In addition to the VaR limit, the Shinhan Investment sets and manages issuance and transaction limits and stop-loss limit for each department.

 

 

 

 

 

 

 

 

 

 

 

 

34

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(c) Market risk (continued)

 

ii) Interest rate risk management from non-trading positions

 

ii-1) Principle

 

Interest rate risk refers to the possibility of a decrease in net interest income or in net asset value that occurs when interest rates fluctuate unfavorably from the Group's financial position. The Group manages net interest income or changes in net asset value that occur due to changes in interest rates by early predicting the factors of interest rate risk fluctuation related to the Group's net interest income and net asset value through the interest rate risk management.

 

ii-2) Managements

 

Shinhan Financial Group's major financial subsidiaries manage interest rate risks independently by the risk management organization and the treasury department, and have internal regulations on interest rate risk management strategies, procedures, organization, measurement, and major assumptions.

 

One of the key indicators of managing interest rate risk is the Earnings at Risk (EaR) from an earning perspective and the Value at Risk (VaR) from an economic value perspective. Interest rate VaR represents the maximum anticipated loss in a net present value calculation, whereas interest rate EaR represents the maximum anticipated loss in a net interest income calculation for the immediately following one-year period, in each case, as a result of negative movements in interest rates.

 

The precision of risk management system varies by each subsidiary. Interest rate VaR and interest rate EaR are measured by internal method or IRRBB (Interest Rate Risk in The Banking Book), and interest rate risk limits are set and monitored based on the interest rate VaR. In accordance with the amendments in Regulations for Supervision of Financial Holding Companies, the Group measures the interest rate risk using the Basel III based IRRBB, which measures the interest rate risk more precisely than the existing BIS standard framework by segmenting maturities of interest rates, reflecting customer behaviour models and diversifying interest rate shocks. The interest rate VaR scenario based on IRRBB measures ① parallel up shock ② parallel down shock ③ steepener shock ④ flattener shock ⑤ short rate up shock ⑥ short rate down shock. By the parallel up shock and parallel down shock, the interest rate VaR scenario measures the scenario value with the largest loss as interest rate risk. Under the existing BIS standard framework, ± 200bp parallel shock scenario is applied to all currency. However, as the shock width is set differently by currency and period, interest rate risk is measured significantly by the IRRBB. ((KRW) Parallel ± 300bp, Short Term ± 400bp, Long Term ± 200bp, (USD) Parallel ± 200bp, Short Term ± 300bp, Long Term ± 150bp) In the IRRBB method, the existing interest rate VaR and the interest rate EaR are expressed as △ EVE (Economic Value of Equity) and △ NII (Net Interest Income), respectively.

 

Since impacts of each subsidiary on changes of interest rates are differentiated by portfolios, the Group is preparing to respond proactively while monitoring the financial market and regulatory environment and making efforts to hedge or reduce interest rate risk. In addition, the subsidiaries conduct the crisis analysis on changes in market interest rates and report it to management and the Group.

 

In particular, through its ALM (Asset and Liability Management) system, Shinhan Bank measures and manages its interest rate risk based on various analytical measures such as interest rate gap, duration gap and NPV (Net Present Value) and NII (Net Interest Income) simulations, and monitors on a monthly basis its interest rate VaR limits, interest rate EaR (Earnings at Risk) limits and interest rate gap ratio limits.

 

 

 

 

 

 

35

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(c) Market risk (continued)

 

iii) Foreign exchange risk

 

Exposure to foreign exchange risk can be defined as the difference (net position) between assets and liabilities presented in foreign currency, including derivative financial instruments linked to foreign exchange rate. Foreign exchange risk is a factor that causes market risk of the trading position and is managed by the Group under the market risk management system.

 

The management of Shinhan Bank’s foreign exchange position is centralized at the S&T Center. Dealers in the S&T Center manage Shinhan Bank’s overall position within the set limits through spot trading, forward contracts, currency options, futures and swaps and foreign exchange swaps. Shinhan Bank sets a limit for net open positions by currency and the limits for currencies other than the U.S. dollars (USD), Japanese yen (JPY), Euros (EUR) and Chinese yuan (CNY) are set in order to minimize exposures from the other foreign exchange trading.

 

36

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(d) Liquidity risk

 

Liquidity risk refers to the risk of unexpected losses (such as the disposal of assets abnormal pricing, the procurement of high interest rates, etc.) or insolvency due to inconsistency in funding periods between assets and liabilities or a sudden outflow of funds.

 

Each subsidiary seeks to minimize liquidity risk through early detection of risk factors related to the sourcing and managing of funding that may cause volatility in liquidity and by ensuring that it maintains an appropriate level of liquidity through systematic management. At the Group level, the Group manages liquidity risk by conducting monthly stress tests that compare liquidity requirements under normal situations against those under three types of stress situations, namely, the group-specific internal crisis, crisis in the external market and a combination of internal and external crisis. Therefore, the Group is checking the liquidity side for abnormalities in preparation for the usual crisis.

 

In particular, after the bankruptcy of Silicon Valley Bank, the Group has been strengthening its ability to respond to liquidity crises by conducting crisis situation analysis using bank run scenarios for banks and savings bank subsidiaries. As such, the Group has been establishing and inspecting emergency procurement plans accordingly.

 

In addition, in order to pre-emptively and comprehensively manage liquidity risk, the Group measures and monitors liquidity risk management using various indices, including the ‘limit management index’, ‘early warning index’ and ‘monitoring index’.

 

Shinhan Bank applies the following basic principles for liquidity risk management:

 

- Raise funding in sufficient amounts, at the optimal time at reasonable costs;

- Maintain risk at appropriate levels and pre-emptively manage them through a prescribed risk limit system and an early warning signal detection system;

- Secure stable sources of revenue and minimize actual losses by implementing an effective asset-liability management system based on diversified sources of funding with varying maturities;

- Monitor and manage daily and intra-daily liquidity positions and risk exposures for timely payment and settlement of financial obligations due under both normal and crisis situations;

- Conduct periodic contingency analysis in anticipation of any potential liquidity crisis and establish and implement emergency plans in case of a crisis; and

- Consider liquidity-related costs, benefits of and risks in determining the pricing of the Group’s products and services, employee performance evaluations and approval of launching of new products and services.

 

Shinhan Card sets and operates a level that can withstand a 3-month credit crunch for end-of-month liquidity. The Group defines and manages the level of caution, anxiety and risk for the real-life liquidity gap ratio, liquidity buffer ratio, and ABS weight compared to borrowings which are major indicators related to liquidity risk. A contingency plan has been established to prepare for a crisis.

 

37

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(d) Liquidity risk (continued)

 

The details of the composition of non-derivative financial liabilities and derivative financial instruments by remaining period as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

Classifications(*1)

 

Less than

1 month(*3)

 

1~3

months

 

3~6

months

 

6 months

~ 1 year

 

1~5

years

 

More than 5 years

 

Total

Non-derivative financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits(*2)

W

206,026,923

 

45,105,593

 

60,064,143

 

68,980,451

 

30,193,774

 

2,852,255

 

413,223,139

 Financial liabilities at fair value through profit or loss

 

2,255,651

 

497

 

464

 

2,317

 

6,398

 

-

 

2,265,327

 Borrowings

 

18,895,579

 

6,883,627

 

6,311,081

 

8,852,451

 

13,609,830

 

3,962,919

 

58,515,487

 Debt securities issued

 

5,375,387

 

8,230,928

 

10,449,869

 

16,724,669

 

47,495,970

 

4,559,842

 

92,836,665

 Financial liabilities designated at fair value through profit or loss

 

538,368

 

1,114,850

 

2,626,764

 

685,162

 

1,418,137

 

1,396,835

 

7,780,116

Investment contract liabilities

 

53,602

 

18,775

 

367,436

 

431,706

 

497,486

 

-

 

1,369,005

 Other financial liabilities

 

46,074,956

 

74,952

 

721,107

 

387,311

 

1,326,458

 

4,726,127

 

53,310,911

 

W

279,220,466

 

61,429,222

 

80,540,864

 

96,064,067

 

94,548,053

 

17,497,978

 

629,300,650

Off balance(*3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Guarantee contracts

W

22,065,542

 

-

 

-

 

-

 

-

 

-

 

22,065,542

Other liabilities related to loan commitments

 

218,735,816

 

-

 

-

 

-

 

-

 

-

 

218,735,816

 

W

240,801,358

 

-

 

-

 

-

 

-

 

-

 

240,801,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives

W

666,737

 

(23,692)

 

(26,139)

 

(81,002)

 

(2,294,088)

 

(181,617)

 

(1,939,801)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(d) Liquidity risk (continued)

 

The details of the composition of non-derivative financial liabilities and derivative financial instruments by remaining period as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Classifications(*1)

 

Less than

1 month(*3)

 

1~3

months

 

3~6

months

 

6 months

~ 1 year

 

1~5

years

 

More than 5 years

 

Total

Non-derivative financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits(*2)

W

204,353,639

 

49,995,140

 

43,382,707

 

65,673,174

 

24,930,159

 

2,931,998

 

391,266,817

 Financial liabilities at fair value through profit or loss

 

410,381

 

358

 

586

 

1,202

 

6,816

 

1,449,634

 

1,868,977

 Borrowings

 

19,310,777

 

5,678,981

 

6,166,750

 

9,811,684

 

14,182,221

 

5,170,111

 

60,320,524

 Debt securities issued

 

4,496,200

 

7,218,255

 

7,931,732

 

18,000,681

 

45,961,768

 

3,734,554

 

87,343,190

 Financial liabilities designated at fair value through profit or loss

 

309,713

 

1,252,877

 

1,774,016

 

1,821,666

 

1,324,185

 

1,356,579

 

7,839,036

Investment contract liabilities

 

245,353

 

110,050

 

67,039

 

423,484

 

726,759

 

-

 

1,572,685

 Other financial liabilities

 

39,957,559

 

219,656

 

394,997

 

252,445

 

1,637,763

 

808,731

 

43,271,151

 

W

269,083,622

 

64,475,317

 

59,717,827

 

95,984,336

 

88,769,671

 

15,451,607

 

593,482,380

Off balance(*3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Guarantee contracts

W

18,374,287

 

-

 

-

 

-

 

-

 

-

 

18,374,287

Other liabilities related to loan commitments

 

212,078,870

 

-

 

-

 

-

 

-

 

-

 

212,078,870

 

W

230,453,157

 

-

 

-

 

-

 

-

 

-

 

230,453,157

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives

W

131,174

 

(101,655)

 

(335,841)

 

(104,002)

 

(1,657,294)

 

134,835

 

(1,932,783)

 

(*1) These amounts include cash flows of principal and interest on financial liabilities.

(*2) Demand deposits amounting to W152,900,880 million and W151,177,041 million as of June 30, 2024 and December 31, 2023 are included in the ‘Less than 1 month’ category, respectively.

(*3) Usually, a maturity date exists for guarantees, loan agreements, and other credit offerings provided by the Group. However, if the counterparty requests a payment, the payment must be performed immediately; hence, it is classified as the “earliest sections that can be performed”.

 

39

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(e) Capital risk management

The criteria for capital adequacy to be complied with by the Group are 8.0% or more of the total equity capital ratio. In addition, the minimum regulatory BIS capital ratio, which should be maintained additionally to increase the ability to absorb losses, has been raised to up to 14% as the capital regulation based on the Basel III standard is enforced from 2016. This is based on the addition of capital conservation capital (2.5%p) and Domestic-Systemically Important Banks(D-SIB) capital (1.0%p) and economic response capital (2.5%p) to the existing lowest common equity capital ratio, and economic response capital can be charged up to 2.5%p during credit expansion period. In the domestic market, the economic response capital requirement has been increased from 0% to 1%, effective from May 1, 2024. Accordingly, as of June 30, 2024, the minimum regulatory BIS capital ratio to be observed is 12.5%, which is the standard for applying capital conservation capital (2.5%p), D-SIB capital (1.0%p), and economic response capital (1.0%p).

 

Basel III capital ratio is the concept of 'International Agreement on the Measurement and Standards of Equity Capital' of the Basel Bank Supervisory Commission of BIS (International Settlement Bank). It is calculated as '(common stock capital (after deduction of deductions) + other basic capital + supplementary capital) ÷ ​​risk weighted assets'.

 

The capital of common stock can be the first to make up for the loss of the financial holding company. The capital of common stock consists of capital stock, capital reserve, retained earnings and other, which will not be redeemed until the liquidation and will be redeemed at the last during the liquidation. Other basic capital consists of capital securities that meet certain requirements as capital of permanent nature. Complementary capital is capital that can compensate for losses of financial holding companies during liquidation, and consists of capital securities, etc. that meet certain requirements. The deduction items are those held by the Group as assets or capital items, but do not contribute to the ability to absorb losses. Unless otherwise noted, it will be deducted from common stock capital.

 

 

As of June 30, 2024, the Group maintains an appropriate capital adequacy ratio in accordance with the BIS Equity Capital Regulation System.

 

40

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value

 

The fair values of financial instruments being traded in an active market are determined by the published market prices of each period end. The published market prices of financial instruments being held by the Group are based on the trading agencies’ notifications.

 

If the market for a financial instrument is not active, such as OTC (Over The Counter market) derivatives, fair value is determined either by using a valuation technique or independent third-party valuation service. The Group uses its judgment to select a variety of methods and make rational assumptions that are mainly based on market conditions existing at the end of each reporting period.

 

The fair value of financial instruments is determined using valuation techniques such as a method of using recent transactions between independent parties with reasonable judgment and willingness to trade, a method of referring to the current fair value of other financial instruments that are substantially identical or discounted cash flow model and option pricing models. For example, the fair value of an interest rate swap is calculated as the present value of the expected future cash flows, and the fair value of foreign exchange forwarding contract is calculated by applying the public forward exchange rate at the end of the reporting period.

 

The Group classifies and discloses fair value of financial instruments into the following three-level hierarchy:

 

Level 1: Financial instruments measured at quoted prices from active markets are classified as fair value level 1.
Level 2: Financial instruments measured using valuation techniques where all significant inputs are observable market data are classified as level 2.
Level 3: Financial instruments measured using valuation techniques where one or more significant inputs are not based on observable market data are classified as level 3.

 

41

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value

 

i-1) The fair value hierarchy of financial instruments presented at their fair values in the statements of financial position as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

Level 1

 

Level 2

 

Level 3

 

Total

Financial assets:

 

 

 

 

 

 

 

 

Due from banks measured at FVTPL

W

-

 

32,769

 

-

 

32,769

Loans at FVTPL

 

-

 

377,427

 

1,076,048

 

1,453,475

Securities at FVTPL:

 

 

 

 

 

 

 

 

Debt securities and other securities

 

13,118,618

 

40,895,240

 

15,140,322

 

69,154,180

Equity securities

 

2,253,237

 

-

 

1,493,318

 

3,746,555

Gold/silver deposits

 

100,481

 

-

 

-

 

100,481

 

 

15,472,336

 

40,895,240

 

16,633,640

 

73,001,216

Derivative assets:

 

 

 

 

 

 

 

 

Trading

 

44,109

 

5,242,602

 

634,920

 

5,921,631

Hedging

 

-

 

395,936

 

-

 

395,936

 

 

44,109

 

5,638,538

 

634,920

 

6,317,567

Securities measured at FVOCI:

 

 

 

 

 

 

 

 

Debt securities

 

37,331,717

 

49,742,490

 

-

 

87,074,207

Equity securities

 

808,736

 

-

 

938,830

 

1,747,566

 

 

38,140,453

 

49,742,490

 

938,830

 

88,821,773

 

W

53,656,898

 

96,686,464

 

19,283,438

 

169,626,800

Financial liabilities:

 

 

 

 

 

 

 

 

Financial liabilities measured at FVTPL:

 

 

 

 

 

 

 

 

Securities sold

W

1,786,057

 

-

 

-

 

1,786,057

Gold/silver deposits

 

479,270

 

-

 

-

 

479,270

 

 

2,265,327

 

-

 

-

 

2,265,327

Financial liabilities designated at fair value through profit or loss:

 

 

 

 

 

 

 

 

Derivatives-combined securities

 

-

 

496,300

 

6,887,247

 

7,383,547

Debt securities issued

 

-

 

254,501

 

-

 

254,501

 

 

-

 

750,801

 

6,887,247

 

7,638,048

Derivative liabilities:

 

 

 

 

 

 

 

 

Trading

 

54,516

 

4,688,728

 

469,733

 

5,212,977

Hedging

 

-

 

779,453

 

247,323

 

1,026,776

 

 

54,516

 

5,468,181

 

717,056

 

6,239,753

 

W

2,319,843

 

6,218,982

 

7,604,303

 

16,143,128

 

 

42

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

i-1) The fair value hierarchy of financial instruments presented at their fair values in the statements of financial position as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

 

 

Level 1

 

Level 2

 

Level 3

 

Total

Financial assets:

 

 

 

 

 

 

 

 

Due from banks measured at FVTPL

W

-

 

30,743

 

-

 

30,743

Loans at FVTPL

 

-

 

515,564

 

1,242,998

 

1,758,562

Securities at FVTPL:

 

 

 

 

 

 

 

 

Debt securities and other securities

 

11,248,555

 

39,736,457

 

14,487,080

 

65,472,092

Equity securities

 

2,253,651

 

-

 

1,597,810

 

3,851,461

Gold/silver deposits

 

103,706

 

-

 

-

 

103,706

 

 

13,605,912

 

39,736,457

 

16,084,890

 

69,427,259

Derivative assets:

 

 

 

 

 

 

 

 

Trading

 

117,929

 

3,709,058

 

632,213

 

4,459,200

Hedging

 

-

 

252,221

 

-

 

252,221

 

 

117,929

 

3,961,279

 

632,213

 

4,711,421

Securities measured at FVOCI:

 

 

 

 

 

 

 

 

Debt securities

 

39,111,078

 

49,525,922

 

-

 

88,637,000

Equity securities

 

725,796

 

-

 

949,183

 

1,674,979

 

 

39,836,874

 

49,525,922

 

949,183

 

90,311,979

 

W

53,560,715

 

93,769,965

 

18,909,284

 

166,239,964

Financial liabilities:

 

 

 

 

 

 

 

 

Financial liabilities measured at FVTPL:

 

 

 

 

 

 

 

 

Securities sold

W

1,449,634

 

-

 

-

 

1,449,634

Gold/silver deposits

 

419,343

 

-

 

-

 

419,343

 

 

1,868,977

 

-

 

-

 

1,868,977

Financial liabilities designated at fair value through profit or loss:

 

 

 

 

 

 

 

 

Derivatives-combined securities

 

-

 

816,643

 

6,725,252

 

7,541,895

Debt securities issued

 

-

 

254,832

 

-

 

254,832

 

 

-

 

1,071,475

 

6,725,252

 

7,796,727

Derivative liabilities:

 

 

 

 

 

 

 

 

Trading

 

46,578

 

3,369,771

 

783,587

 

4,199,936

Hedging

 

-

 

614,285

 

224,195

 

838,480

 

 

46,578

 

3,984,056

 

1,007,782

 

5,038,416

 

W

1,915,555

 

5,055,531

 

7,733,034

 

14,704,120

 

 

 

43

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

i-2) Classification of financial instruments as fair value level 3

 

The Group uses the evaluation value from external evaluators who are qualified and independent to determine the fair value for Group’s assets at the end of each reporting period. Changes in carrying values of financial instruments classified as Level 3 for the six-month period ended June 30, 2024 and the year ended December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

Financial
asset
at fair value
through profit or loss

 

Securities
at fair value through other comprehensive income or loss

 

Financial liabilities designated at fair value through profit or loss

 

Derivative assets and liabilities, net

 

 

 

 

 

 

 

 

Held for trading

Held for hedging

Beginning balance

W

17,327,888

 

949,183

 

(6,725,252)

 

(151,374)

(224,195)

Recognized in total comprehensive income for the year:

 

 

 

 

 

 

 

 

 

Recognized in profit (loss) for the year(*1)

 

267,712

 

-

 

(117,990)

 

(33,479)

(23,128)

Recognized in other comprehensive income (loss) for the year

 

896

 

(20,292)

 

(4,482)

 

-

-

 

 

268,608

 

(20,292)

 

(122,472)

 

(33,479)

(23,128)

Purchase

 

2,612,443

 

13,062

 

-

 

273,625

-

Issue

 

-

 

-

 

(3,554,749)

 

-

-

Settlement

 

(2,450,381)

 

(3,123)

 

3,515,226

 

72,387

-

Transfer to level3(*2)

 

13,698

 

-

 

-

 

3,931

-

Transfer from level3(*2)

 

(62,568)

 

-

 

-

 

97

-

Ending balance

W

17,709,688

 

938,830

 

(6,887,247)

 

165,187

(247,323)

 

44

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

i-2) Classification of financial instruments as fair value level 3 (continued)

 

The Group uses the evaluation value from external evaluators who are qualified and independent to determine the fair value for Group’s assets at the end of each reporting period. Changes in carrying values of financial instruments classified as Level 3 for the six-month period ended June 30, 2024 and the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

 

 

Financial
asset
at fair value
through profit or loss

 

Securities
at fair value through other comprehensive income or loss

 

Financial liabilities designated at fair value through profit or loss

 

Derivative assets and liabilities, net

 

 

 

 

 

 

 

 

Held for trading

Held for hedging

Beginning balance

W

15,047,137

 

981,329

 

(7,930,909)

 

61,622

(343,759)

Recognized in total comprehensive income for the year:

 

 

 

 

 

 

 

 

 

Recognized in profit (loss) for the year(*1)

 

69,334

 

-

 

(244,146)

 

(15,540)

119,564

Recognized in other comprehensive income (loss) for the year

 

(532)

 

12,747

 

(1,907)

 

-

-

 

 

68,802

 

12,747

 

(246,053)

 

(15,540)

119,564

Purchase

 

5,987,732

 

55,078

 

-

 

36,786

-

Issue

 

-

 

-

 

(6,343,080)

 

-

-

Settlement

 

(4,071,062)

 

(100,000)

 

7,794,790

 

(234,242)

-

Transfer to level3(*2)

 

299,148

 

29

 

-

 

-

-

Transfer from level3(*2)

 

(3,869)

 

-

 

-

 

-

-

Ending balance

W

17,327,888

 

949,183

 

(6,725,252)

 

(151,374)

(224,195)

 

(*1) Recognized profit or loss of the changes in carrying value of financial instruments classified as Level 3 for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are included in the accounts of the statements of comprehensive income, of which the amounts and the related accounts are as follows:

 

 

June 30, 2024

 

 

Amounts recognized in profit or loss

 

Recognized profit or loss from the financial instruments held as of

June 30

Net gain on financial assets at fair value through profit or loss

W

234,233

 

287,499

Net loss on financial liabilities designated at fair value through profit or loss

 

(117,990)

 

(89,015)

Net other operating income

 

(23,128)

 

(23,128)

 

W

93,115

 

175,356

 

 

45

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

 

 

 

December 31, 2023

 

 

Amounts recognized in profit or loss

 

Recognized profit or loss from the financial instruments held as of December 31

Net loss on financial assets at fair value through profit or loss

W

53,794

 

47,708

Net gain on financial liabilities designated at fair value through profit or loss

 

(244,146)

 

96,223

Other operating expenses

 

119,564

 

119,564

 

W

(70,788)

 

263,495

(*2) The transfers between levels occurred due to changes in the availability of observable market data for the financial instruments. The consolidated entity recognizes level changes at the end of the reporting period in which the events or changes in circumstances that caused the transfers to occur.

 

46

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

i-3) Valuation techniques and significant inputs not observable in markets

 

i-3-1) Valuation techniques and inputs used in measuring the fair value of financial instruments classified as level 2 as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

Type of financial instrument

 

Valuation technique

 

Carrying

value

 

Significant inputs

Assets

 

 

 

 

 

 

Financial asset at fair value through profit or loss

 

 

 

 

 

 

Debt securities

 

DCF, NAV,

Option model (*)

W

41,305,436

 

Discount rate, interest rate, stock price, etc.

 

 

 

 

41,305,436

 

 

Derivative assets

 

 

 

 

 

 

Trading

 

Option model (*), Implied forward interest rate,

DCF

 

5,242,602

 

Discount rate, foreign exchange rate, volatility, stock price and commodity index, etc.

Hedging

 

 

395,936

 

 

 

 

 

5,638,538

 

 

Securities at fair value through other comprehensive income

 

 

 

 

 

 

Debt securities

 

DCF,

Option model (*)

 

49,742,490

 

Interest rate, discount rate, etc.

 

 

 

W

96,686,464

 

 

Liabilities

 

 

 

 

 

 

Financial liabilities designated at fair value through profit or loss

 

 

 

 

 

 

  Debt securities issued

 

Option model (*), NAV

 

254,501

 

Discount rate, volatility

  Compound financial instruments

 

W

496,300

 

Underlying asset price

 

 

 

 

750,801

 

 

Derivative liabilities

 

 

 

 

 

 

Trading

 

Option model (*),

Forward interest rate,

DCF

 

4,688,728

 

Discount rate, foreign exchange rate, volatility, stock price and commodity index, etc.

 

 

Hedging

 

 

779,453

 

 

 

 

 

5,468,181

 

 

 

 

 

W

6,218,982

 

 

 

47

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

i-3) Valuation techniques and significant inputs not observable in markets (continued)

 

i-3-1) Valuation techniques and inputs used in measuring the fair value of financial instruments classified as level 2 as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Type of financial instrument

 

Valuation technique

 

Carrying

value

 

Significant inputs

Assets

 

 

 

 

 

 

Financial asset at fair value through profit or loss

 

 

 

 

 

 

Debt securities

 

DCF, NAV,

Option model (*)

W

40,282,764

 

Discount rate, interest rate, stock price and etc.

 

 

 

 

40,282,764

 

 

Derivative assets

 

 

 

 

 

 

Trading

 

Option model (*), Implied forward interest rate,

DCF

 

3,709,058

 

Discount rate, foreign exchange rate, volatility, stock price and commodity index, etc.

Hedging

 

 

252,221

 

 

 

 

 

3,961,279

 

 

Securities at fair value through other comprehensive income

 

 

 

 

 

 

Debt securities

 

DCF,

Option model (*)

 

49,525,922

 

Interest rate, discount rate, etc.

 

 

 

W

93,769,965

 

 

Liabilities

 

 

 

 

 

 

Financial liabilities designated at fair value through profit or loss

 

 

 

 

 

 

  Debt securities issued

 

Option model (*), NAV

 

254,832

 

Discount rate, volatility

  Compound financial instruments

 

W

816,643

 

Underlying asset price

 

 

 

 

1,071,475

 

 

Derivative liabilities

 

 

 

 

 

 

Trading

 

Option model (*),

Forward interest rate,

DCF

 

3,369,771

 

Discount rate, foreign exchange rate, volatility, stock price and commodity index, etc.

 

 

Hedging

 

 

614,285

 

 

 

 

 

3,984,056

 

 

 

 

 

W

5,055,531

 

 

 

(*) Option model that the Group uses in valuation includes Black-Scholes model, Hull-White model, etc. Depending on the instrument type, methods such as Monte Carlo simulation are applied to some products.

 

 

 

48

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

i-3) Valuation techniques and significant inputs not observable in markets (continued)

 

i-3-2) Valuation techniques and significant inputs, but not observable, used in measuring the fair value of financial instruments classified as level 3 as of June 30, 2024 and December 31, 2023 are as follows:

June 30, 2024

Type of financial instrument

Valuation technique

Carrying

value(*2)

Significant unobservable inputs

Range(%)

Financial assets

Financial asset at fair value through profit or loss

Debt securities

DCF, NAV, Option model(*1), Income approach

W

16,216,370

The volatility of the underlying asset,

Discount rate,

Correlations,

Growth rate,

and Liquidation Value

0.57~82.30

2.77~15.17

0.50~37.95

0.00

0.00

Equity securities

DCF, NAV, Option model(*1),

Comparable company analysis, Transaction case price,

Cost method

1,493,318

The volatility of the underlying asset,

Discount rate,

Growth rate

And Interest rate volatility

19.24~46.47

4.49~24.85

0.00

0.42~0.68

17,709,688

 

Derivative assets

 

Equity and foreign exchange related

Option model(*1)

97,917

The volatility of the underlying asset and

Correlations

8.07~41.87

-42.43~90.87

Interest rates related

Option model(*1)

61,001

The volatility of the underlying asset and

Correlations

0.52~0.89

-38.40~80.25

Credit and commodity related

Option model(*1)

476,002

The volatility of the underlying asset, Correlations

and Hazard Rate

40.31~40.59

99.95~99.98

0.06~8.56

634,920

 

Securities at fair value through other comprehensive income

 

Equity securities

DCF, NAV, Option model(*1),

Comparable company analysis

938,830

The volatility of the underlying asset, Discount rate,

Growth rate and

Interest rate volatility

16.75~22.04

5.13~25.03

-1.00~1.00

0.50~67.91

W

19,283,438

 

 

49

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

i-3) Valuation techniques and significant inputs not observable in markets (continued)

 

i-3-2) Valuation techniques and significant inputs, but not observable, used in measuring the fair value of financial instruments classified as level 3 as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

June 30, 2024

Type of financial instrument

 

Valuation technique

 

 

Carrying

value(*2)

 

Significant unobservable inputs

 

Range(%)

Financial liabilities

 

 

 

 

 

 

 

 

 

Financial liabilities designated at fair

value through profit or

loss

 

 

 

 

 

 

 

 

 

Equity related

 

Option model(*1)

 

W

6,887,247

 

The volatility of the underlying asset and

Correlations

 

0.49~53.48

-42.43~80.25

Derivative liabilities

 

 

 

 

 

 

 

 

 

Equity and foreign

    exchange related

 

Option model(*1)

 

 

115,228

 

The volatility of the underlying asset and

Correlations

 

9.29~51.36

0.00~90.87

Interest rates related

 

Option model(*1)

 

 

500,825

 

The volatility of the underlying asset,

Regression coefficient and

Correlations

 

0.52~1.11

0.00~2.77

-38.40~90.34

Credit and commodity

 related

 

Option model(*1)

 

 

101,003

 

The volatility of the underlying asset, Correlations

and Hazard Rate

 

0.69~6.02

0.63~80.25

0.11~7.00

 

 

 

 

 

717,056

 

 

 

 

 

 

 

 

W

7,604,303

 

 

 

 

 

 

 

50

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

i-3) Valuation techniques and significant inputs not observable in markets (continued)

 

i-3-2) Valuation techniques and significant inputs, but not observable, used in measuring the fair value of financial instruments classified as level 3 as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Type of financial instrument

 

Valuation technique

 

 

Carrying

value(*2)

 

Significant unobservable inputs

 

Range(%)

Financial assets

 

 

 

 

 

 

 

 

 

Financial asset at fair value through profit or loss

 

 

 

 

 

 

 

 

 

Debt securities

 

DCF, NAV, Option model(*1), Income approach

 

 

W

15,730,078

 

The volatility of the underlying asset,

Discount rate,

Correlations,

Growth rate,

and Liquidation Value

 

 

1.00~76.22
2.44~16.17

-11.62~65.74

0.00

0.00

Equity securities

 

DCF, NAV, Option model(*1),

Comparable company analysis, Transaction case price,

Cost method

 

 

1,597,810

 

The volatility of the underlying asset,

Discount rate,

Growth rate

And Interest rate volatility

 

 

0.51~51.57

2.61~31.73

0.00

0.51~74.30

 

 

 

 

 

17,327,888

 

 

 

 

Derivative assets

 

 

 

 

 

 

 

 

 

Equity and foreign exchange related

 

Option model(*1)

 

 

97,403

 

The volatility of the underlying asset and

Correlations

 

8.08~63.37

-1.74~69.79

Interest rates related

 

Option model(*1)

 

 

60,919

 

The volatility of the underlying asset and

Correlations

 

0.19~0.68

75.14~77.30

Credit and commodity related

 

Option model(*1)

 

 

473,891

 

The volatility of the underlying asset, Correlations

and Hazard Rate

 

34.52~41.77

99.83~99.95

0.08~3.60

 

 

 

 

 

632,213

 

 

 

 

Securities at fair value through other comprehensive income

 

 

 

 

 

 

 

 

 

Equity securities

 

DCF, NAV, Option model(*1),

Comparable company analysis

 

 

949,183

 

The volatility of the underlying asset, Discount rate,

Growth rate and

Interest rate volatility

 

20.60~27.84

5.14~20.90

-1.00~1.00

0.55~60.71

 

 

 

 

 

 

 

 

 

W

18,909,284

 

 

 

 

 

 

51

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

i-3) Valuation techniques and significant inputs not observable in markets (continued)

 

i-3-2) Valuation techniques and significant inputs, but not observable, used in measuring the fair value of financial instruments classified as level 3 as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Type of financial instrument

 

Valuation technique

 

 

Carrying

value(*2)

 

Significant unobservable inputs

 

Range(%)

Financial liabilities

 

 

 

 

 

 

 

 

 

Financial liabilities designated at fair

value through profit or

loss

 

 

 

 

 

 

 

 

 

Equity related

 

Option model(*1)

 

W

6,725,252

 

The volatility of the underlying asset and

Correlations

 

0.26~81.98

-42.43~84.71

Derivative liabilities

 

 

 

 

 

 

 

 

 

Equity and foreign

    exchange related

 

Option model(*1)

 

 

468,611

 

The volatility of the underlying asset and

Correlations

 

7.58~81.98

-42.43~84.71

Interest rates related

 

Option model(*1)

 

 

445,572

 

The volatility of the underlying asset,

Regression coefficient and

Correlations

 

0.19~1.06

0.00~2.71

-38.52~90.34

Credit and commodity

 related

 

Option model(*1)

 

 

93,599

 

The volatility of the underlying asset, Correlations

and Hazard Rate

 

0.26~24.67

-11.62~77.30

0.08~2.55

 

 

 

 

 

1,007,782

 

 

 

 

 

 

 

 

W

7,733,034

 

 

 

 

(*1) Option model that the Group uses in derivative valuation includes Black-Scholes model, Hull-White model, Monte Carlo simulation, etc. Depending on the instrument type, methods such as Monte Carlo simulation are applied to some products.

(*2) There is no disclosure for valuation techniques and input variables related to items where the carrying amount is recognized as a reasonable approximation of fair value and the carrying amount is disclosed at fair value.

 

52

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

i) Financial instruments measured at fair value (continued)

 

i-4) Sensitivity for changing in unobservable inputs

 

For level 3 fair value measurement, changing one or more of the unobservable inputs used to reasonably possible alternative assumptions would have the following effects on profit or loss, or other comprehensive income as of June 30, 2024 and December 31, 2023.

 

 

 

June 30, 2024

 

 

Favorable

changes

 

Unfavorable

changes

Financial assets:

 

 

 

 

Effects on profit or loss for the period(*1)(*2):

 

 

 

 

Financial assets at fair value through profit or loss

W

41,052

 

(38,195)

Derivative assets

 

24,353

 

(24,702)

Securities at fair value through other comprehensive income(*2)

 

38,504

 

(29,784)

 

W

103,909

 

(92,681)

Financial liabilities:

 

 

 

 

Effects on profit or loss for the period(*1):

 

 

 

 

Financial liabilities designated at fair value through profit or loss

W

21,261

 

(19,680)

Derivative liabilities

 

22,813

 

(21,752)

 

W

44,074

 

(41,432)

 

 

 

December 31, 2023

 

 

Favorable

changes

 

Unfavorable

changes

Financial assets:

 

 

 

 

Effects on profit or loss for the period(*1)(*2):

 

 

 

 

Financial assets at fair value through profit or loss

W

45,433

 

(42,214)

Derivative assets

 

19,994

 

(20,386)

Securities at fair value through other comprehensive income(*2)

 

44,286

 

(33,212)

 

W

109,713

 

(95,812)

Financial liabilities:

 

 

 

 

Effects on profit or loss for the period(*1):

 

 

 

 

Financial liabilities designated at fair value through profit or loss

W

30,543

 

(29,790)

Derivative liabilities

 

27,561

 

(27,525)

 

W

58,104

 

(57,315)

(*1) Fair value changes are calculated by increasing or decreasing the volatility of the underlying asset or correlations (-10~10%p), which is the major significant unobservable input.

(*2) Fair value changes are calculated by increasing or decreasing the growth rate and discount rate (-1~1%p), which are the major unobservable inputs.

 

 

53

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

ii) Financial instruments measured at amortized cost

 

ii-1) The method of measuring the fair value of financial instruments measured at amortized cost is as follows:

 

Type

 

Measurement methods of fair value

 

 

 

Cash and

due from banks

 

The carrying value and the fair value for cash are identical and most of deposits are floating interest rate deposits or next day deposits of a short-term instrument. For this reason, the carrying value approximates fair value.

Loans

 

The fair value of the loans is measured by discounting the expected cash flow to be received at the discount rate considering the market interest rate and the borrower's credit risk.

Securities

 

An external professional evaluation agency is used to calculate the valuation amount using the market information. The agency calculates the fair value based on active market prices, and DCF model is used to calculate the fair value if there is no quoted price.

Deposits and borrowings

 

 

The carrying value and the fair value for demand deposits, cash management account deposits, call money as short-term instrument are identical. The remaining liabilities and borrowings were calculated as fair value by discounting contractual cash flows at the market interest rate that takes into account the residual risk.

Debt securities issued

 

Where available, the fair value of deposits and borrowings is based on the published price quotations in an active market. In case there is no data for an active market price, it is measured by discounting the contractual cash flow at the market interest rate that takes into account the residual risk.

Investment contract liabilities

 

The carrying value is used instead of fair value for reserve for retirement pension contracts in accordance with the Insurance Act and the Enforcement Rules of the Insurance Business Act, due to the difficulties with calculating expected cash flows.

Other financial assets and

 other financial liabilities

 

The carrying value is measured at fair value for short-term and suspense accounts, such as spot exchange, inter-bank fund transfer, and domestic exchange of payments, and for the remaining financial instruments, the present value is calculated by discounting the contractual cash flows at a discount rate which considered residual risk at the market interest rate.

 

54

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

ii) Financial instruments measured at amortized cost (continued)

 

ii-2) The carrying value and the fair value of financial instruments measured at amortized cost as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

 

 

Carrying value

 

Fair value

 

Carrying value

 

Fair value

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits measured at amortized cost

W

32,678,006

 

32,578,839

 

32,455,701

 

32,338,446

 

 

 

 

 

 

 

 

 

Loans measured at amortized cost

 

434,524,032

 

436,676,378

 

411,739,562

 

414,024,035

 

 

 

 

 

 

 

 

 

Securities measured at amortized cost:

 

 

 

 

 

 

 

 

Government bonds

 

22,969,524

 

22,419,073

 

22,787,609

 

22,182,130

Financial institution bonds

 

5,661,264

 

5,700,449

 

5,864,626

 

5,906,724

Corporation bonds

 

7,376,916

 

7,261,567

 

7,034,252

 

6,879,983

 

 

36,007,704

 

35,381,089

 

35,686,487

 

34,968,837

Other financial assets

 

35,402,536

 

35,748,136

 

26,880,554

 

27,175,002

 

W

538,612,278

 

540,384,442

 

506,762,304

 

508,506,320

Liabilities:

 

 

 

 

 

 

 

 

Deposit liabilities:

 

 

 

 

 

 

 

 

Demand deposits

W

152,900,880

 

152,900,880

 

151,177,041

 

151,177,041

Time deposits

 

220,349,654

 

220,726,882

 

202,106,686

 

202,405,752

Certificate of deposits

 

11,984,133

 

12,028,296

 

12,059,730

 

12,114,566

Issued bill deposits

 

8,390,154

 

8,389,373

 

7,614,701

 

7,614,012

CMA deposits

 

5,198,804

 

5,198,804

 

4,950,392

 

4,950,392

Others

 

3,932,372

 

3,932,330

 

3,604,114

 

3,604,031

 

 

402,755,997

 

403,176,565

 

381,512,664

 

381,865,794

Borrowing debts:

 

 

 

 

 

 

 

 

Call-money

 

2,057,338

 

2,057,338

 

2,195,849

 

2,195,849

Bills sold

 

12,539

 

12,481

 

11,252

 

11,208

Bonds sold under repurchase agreements

 

16,341,196

 

16,341,196

 

17,312,576

 

17,312,576

Borrowings

 

38,786,159

 

38,770,831

 

37,381,675

 

37,322,235

 

 

57,197,232

 

57,181,846

 

56,901,352

 

56,841,868

Debt securities issued:

 

 

 

 

 

 

 

 

Borrowings in Korean won

 

69,423,820

 

69,638,030

 

68,382,242

 

68,189,097

Borrowings in foreign currency

 

16,825,527

 

16,864,769

 

13,179,483

 

13,143,721

 

 

86,249,347

 

86,502,799

 

81,561,725

 

81,332,818

 

 

 

 

 

 

 

 

 

Investment contract liabilities

 

1,369,005

 

1,369,005

 

1,572,685

 

1,572,685

Other financial liabilities

 

53,387,313

 

53,927,166

 

47,328,051

 

47,295,828

 

W

600,958,894

 

602,157,381

 

568,876,477

 

568,908,993

 

 

 

 

55

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

ii) Financial instruments measured at amortized cost (continued)

 

ii-3) The fair value hierarchy of financial assets and liabilities which are not measured at their fair values in the statements of financial position but with their fair value disclosed as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

Level 1

Level 2

Level 3

 

Total

Assets:

 

 

 

 

Deposits measured at amortized cost

W

542,564

32,036,275

-

 

32,578,839

 

 

 

 

 

 

 

Loans measured at amortized cost

 

-

2,404,147

434,272,231

 

436,676,378

 

 

 

 

 

 

 

Securities measured at amortized cost:

 

 

 

 

 

 

Government bonds

 

11,507,072

10,912,001

-

 

22,419,073

Financial institution bonds

 

1,972,431

3,728,018

-

 

5,700,449

Corporation bonds

 

-

7,261,567

-

 

7,261,567

 

 

13,479,503

21,901,586

-

 

35,381,089

 

 

 

 

 

 

 

Other financial assets

 

-

24,926,519

10,821,617

 

35,748,136

 

W

14,022,067

81,268,527

445,093,848

 

540,384,442

Liabilities:

 

 

 

 

Deposit liabilities:

 

 

 

 

Demand deposits

W

-

152,900,880

-

 

152,900,880

Time deposits

 

-

-

220,726,882

 

220,726,882

Certificate of deposit

 

-

-

12,028,296

 

12,028,296

Issued bill deposit

 

-

-

8,389,373

 

8,389,373

CMA deposits

 

-

5,198,804

-

 

5,198,804

Other

 

-

3,892,184

40,146

 

3,932,330

 

 

-

161,991,868

241,184,697

 

403,176,565

Borrowing debts:

 

 

 

 

 

 

Call-money

 

-

2,057,338

-

 

2,057,338

Bills sold

 

-

-

12,481

 

12,481

Bonds sold under repurchase agreements

 

-

-

16,341,196

 

16,341,196

Borrowings

 

-

19,381

38,751,450

 

38,770,831

 

 

-

2,076,719

55,105,127

 

57,181,846

Debts:

 

 

 

 

 

 

Borrowings in won

 

-

38,253,676

31,384,354

 

69,638,030

Borrowings in foreign currency

 

-

12,278,993

4,585,776

 

16,864,769

 

 

-

50,532,669

35,970,130

 

86,502,799

 

 

 

 

 

 

 

Investment contract liabilities

 

-

-

1,369,005

 

1,369,005

 

 

 

 

 

 

 

Other financial liabilities

 

-

24,464,020

29,463,146

 

53,927,166

 

W

-

239,065,276

363,092,105

 

602,157,381

 

56

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(f) Measurement of fair value (continued)

 

ii) Financial instruments measured at amortized cost (continued)

 

ii-3) The fair value hierarchy of financial assets and liabilities which are not measured at their fair values in the statements of financial position but with their fair value disclosed as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

December 31, 2023

 

 

Level 1

Level 2

Level 3

 

Total

Assets:

 

 

 

 

Deposits measured at amortized cost

W

554,703

31,783,743

-

 

32,338,446

 

 

 

 

 

 

 

Loans measured at amortized cost

 

-

1,633,949

412,390,086

 

414,024,035

 

 

 

 

 

 

 

Securities measured at amortized cost:

 

 

 

 

 

 

Government bonds

 

10,727,244

11,454,886

-

 

22,182,130

Financial institution bonds

 

2,005,877

3,900,847

-

 

5,906,724

Corporation bonds

 

-

6,879,983

-

 

6,879,983

 

 

12,733,121

22,235,716

-

 

34,968,837

 

 

 

 

 

 

 

Other financial assets

 

-

16,393,625

10,781,377

 

27,175,002

 

W

13,287,824

72,047,033

423,171,463

 

508,506,320

Liabilities:

 

 

 

 

Deposit liabilities:

 

 

 

 

Demand deposits

W

-

151,177,041

-

 

151,177,041

Time deposits

 

-

-

202,405,752

 

202,405,752

Certificate of deposit

 

-

-

12,114,566

 

12,114,566

Issued bill deposit

 

-

-

7,614,012

 

7,614,012

CMA deposits

 

-

4,950,392

-

 

4,950,392

Other

 

-

3,565,491

38,540

 

3,604,031

 

 

-

159,692,924

222,172,870

 

381,865,794

Borrowing debts:

 

 

 

 

 

 

Call-money

 

-

2,195,849

-

 

2,195,849

Bills sold

 

-

-

11,208

 

11,208

Bonds sold under repurchase agreements

 

-

-

17,312,576

 

17,312,576

Borrowings

 

-

221,256

37,100,979

 

37,322,235

 

 

-

2,417,105

54,424,763

 

56,841,868

Debts:

 

 

 

 

 

 

Borrowings in won

 

-

36,388,349

31,800,748

 

68,189,097

Borrowings in foreign currency

 

-

10,456,332

2,687,389

 

13,143,721

 

 

-

46,844,681

34,488,137

 

81,332,818

 

 

 

 

 

 

 

Investment contract liabilities

 

-

-

1,572,685

 

1,572,685

 

 

 

 

 

 

 

Other financial liabilities

 

-

20,658,155

26,637,673

 

47,295,828

 

W

-

229,612,865

339,296,128

 

568,908,993

 

 

57

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(g) Classification by categories of financial instruments

 

Financial assets and liabilities are measured at fair value or amortized cost. The financial instruments measured at fair value or amortized costs are measured in accordance with the Group’s valuation methodologies, which are described in Note 4(f) Measurement of fair value.

 

The carrying value of each category of financial assets and financial liabilities as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

FVTPL

 

FVOCI

 

Amortized cost

 

Derivatives held for hedging

 

Total

Assets:

 

 

 

 

 

 

 

 

 

 

Cash and due from banks at amortized cost

W

-

 

-

 

35,010,082

 

-

 

35,010,082

Due from banks at fair value through profit or loss

 

32,769

 

-

 

-

 

-

 

32,769

Securities at fair value through profit or loss

 

73,001,216

 

-

 

-

 

-

 

73,001,216

Derivatives assets

 

5,921,631

 

-

 

-

 

395,936

 

6,317,567

Loans at fair value through profit or loss

 

1,453,475

 

-

 

-

 

-

 

1,453,475

Loans at amortized cost

 

-

 

-

 

434,524,032

 

-

 

434,524,032

Securities at fair value through other comprehensive income

 

-

 

88,821,773

 

-

 

-

 

88,821,773

Securities at amortized cost

 

-

 

-

 

36,007,704

 

-

 

36,007,704

Others

 

-

 

-

 

35,402,536

 

-

 

35,402,536

 

W

80,409,091

 

88,821,773

 

540,944,354

 

395,936

 

710,571,154

 

 

58

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(g) Classification by categories of financial instruments (continued)

 

The carrying value of each category of financial assets and financial liabilities as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

June 30, 2024

 

 

FVTPL

 

FVTPL

liabilities designated

 

Amortized cost

 

Derivatives held for hedging

 

Total

Liabilities:

 

 

 

 

 

 

 

 

 

 

Deposits

W

-

 

-

 

402,755,997

 

-

 

402,755,997

Financial liabilities at fair value through profit or loss

 

2,265,327

 

-

 

-

 

-

 

2,265,327

Financial liabilities designated at FVTPL

 

-

 

7,638,048

 

-

 

-

 

7,638,048

Derivatives liabilities

 

5,212,977

 

-

 

-

 

1,026,776

 

6,239,753

Borrowings

 

-

 

-

 

57,197,232

 

-

 

57,197,232

Debt securities issued

 

-

 

-

 

86,249,347

 

-

 

86,249,347

Investment contract liabilities

 

-

 

-

 

1,369,005

 

-

 

1,369,005

Others

 

-

 

-

 

53,387,313

 

-

 

53,387,313

 

W

7,478,304

 

7,638,048

 

600,958,894

 

1,026,776

 

617,102,022

 

 

 

59

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(g) Classification by categories of financial instruments (continued)

 

The carrying value of each category of financial assets and financial liabilities as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

 

 

FVTPL

 

FVOCI

 

Amortized cost

 

Derivatives held for hedging

 

Total

Assets:

 

 

 

 

 

 

 

 

 

 

Cash and due from banks at amortized cost

W

-

 

-

 

34,629,251

 

-

 

34,629,251

Due from banks at fair value through profit or loss

 

30,743

 

-

 

-

 

-

 

30,743

Securities at fair value through profit or loss

 

69,427,259

 

-

 

-

 

-

 

69,427,259

Derivatives assets

 

4,459,200

 

-

 

-

 

252,221

 

4,711,421

Loans at fair value through profit or loss

 

1,758,562

 

-

 

-

 

-

 

1,758,562

Loans at amortized cost

 

-

 

-

 

411,739,562

 

-

 

411,739,562

Securities at fair value through other comprehensive income

 

-

 

90,311,979

 

-

 

-

 

90,311,979

Securities at amortized cost

 

-

 

-

 

35,686,487

 

-

 

35,686,487

Others

 

-

 

-

 

26,880,554

 

-

 

26,880,554

 

W

75,675,764

 

90,311,979

 

508,935,854

 

252,221

 

675,175,818

 

 

 

 

60

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

4. Financial risk management (continued)

 

(g) Classification by categories of financial instruments (continued)

 

The carrying value of each category of financial assets and financial liabilities as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

 

 

FVTPL

 

FVTPL

liabilities designated

 

Amortized cost

 

Derivatives held for hedging

 

Total

Liabilities:

 

 

 

 

 

 

 

 

 

 

Deposits

W

-

 

-

 

381,512,664

 

-

 

381,512,664

Financial liabilities at fair value through profit or loss

 

1,868,977

 

-

 

-

 

-

 

1,868,977

Financial liabilities designated at FVTPL

 

-

 

7,796,727

 

-

 

-

 

7,796,727

Derivatives liabilities

 

4,199,936

 

-

 

-

 

838,480

 

5,038,416

Borrowings

 

-

 

-

 

56,901,352

 

-

 

56,901,352

Debt securities issued

 

-

 

-

 

81,561,725

 

-

 

81,561,725

Investment contract liabilities

 

-

 

-

 

1,572,685

 

-

 

1,572,685

Others

 

-

 

-

 

47,328,051

 

-

 

47,328,051

 

W

6,068,913

 

7,796,727

 

568,876,477

 

838,480

 

583,580,597

 

61

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

5. Changes in subsidiaries

 

There are no major subsidiaries newly included in or excluded from the consolidated financial statements for the six-month period ended June 30, 2024 and for the year ended December 31, 2023

 

 

6. Operating segments

 

(a) Segment information

 

The general descriptions by operating segments as of June 30, 2024 are as follows:

 

Segment

 

Description

 

 

 

Banking

 

 

Credit to customers, deposits from customers, and accompanying work

Credit card

 

Sales of credit cards, cash services, card loan services, installment financing, lease and accompanying work

 

Securities

 

Securities trading, consignment trading, underwriting and accompanying work

 

Insurance (*)

 

Life insurance business, non-life insurance business and accompanying work

Credit

 

Facility rental, new technology business financing and accompanying work

 

Others

 

Business segments that do not belong to the above segments, such as real estate trust, investment advisory services, venture business investment and other remaining businesses

(*) The Group had disclosed related information using the life insurance sales segment as a reporting segment. However, as the internal reporting method for the chief operating decision maker was changed to the insurance industry standard, from the previous period, the life insurance and non-life insurance sales segment has been integrated and redefined as the insurance segment. Accordingly, the reporting segment information for the previous term was restated.

 

 

 

62

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

6. Operating segments (continued)

 

(b) The following tables provide information of operating income(expense) and net profit(loss) for each operating segment for the six-month periods ended June 30, 2024 and 2023.

 

 

 

June 30, 2024

 

 

Banking

 

Credit card

 

Securities

 

Insurance

 

Credit

 

Others

 

Consolidation adjustment

 

Total

Net interest income (expense)

W

4,455,648

 

959,751

 

276,908

 

(75,591)

 

84,383

 

44,881

 

(108,267)

 

5,637,713

Net fees and commission income (expense)

 

443,875

 

511,391

 

279,670

 

(2,556)

 

7,159

 

168,092

 

11,678

 

1,419,309

Reversal of (provision for) credit loss allowance

 

(170,113)

 

(435,924)

 

(22,036)

 

(1,821)

 

(78,693)

 

(269,399)

 

506

 

(977,480)

General and administrative expenses

 

(1,820,712)

 

(393,328)

 

(381,140)

 

(91,716)

 

(33,120)

 

(223,044)

 

99,209

 

(2,843,851)

Other operating income(expense)

 

(119,741)

 

(95,872)

 

120,233

 

601,163

 

131,248

 

339,041

 

(290,984)

 

685,088

Operating income(expense)

 

2,788,957

 

546,018

 

273,635

 

429,479

 

110,977

 

59,571

 

(287,858)

 

3,920,779

Equity method income (expense)

 

14,448

 

(4,803)

 

(4,073)

 

(128)

 

27,166

 

4,266

 

(51,834)

 

(14,958)

Income tax expense

 

565,815

 

126,129

 

57,994

 

117,822

 

28,507

 

1,450

 

(34,588)

 

863,129

Profit for the period

W

2,010,839

 

429,941

 

207,160

 

306,881

 

108,043

 

57,425

 

(321,474)

 

2,798,815

Controlling interest

W

2,010,504

 

428,478

 

207,171

 

306,881

 

108,043

 

57,425

 

(371,491)

 

2,747,011

Non-controlling interests

 

335

 

1,463

 

(11)

 

-

 

-

 

-

 

50,017

 

51,804

 

 

 

 

June 30, 2023

 

 

Banking

 

Credit card

 

Securities

 

insurance

 

Credit

 

Others

 

Consolidation adjustment

 

Total

Net interest income (expense)

W

4,190,664

 

922,156

 

184,756

 

(112,635)

 

130,657

 

71,311

 

(118,884)

 

5,268,025

Net fees and commission income (expense)

 

394,148

 

421,199

 

251,000

 

(1,354)

 

7,895

 

187,620

 

(7,780)

 

1,252,728

Provision for credit loss allowance

 

(466,410)

 

(373,304)

 

(29,080)

 

(6,419)

 

(73,419)

 

(34,515)

 

(336)

 

(983,483)

General and administrative expenses

 

(1,814,188)

 

(380,731)

 

(371,609)

 

(119,802)

 

(33,483)

 

(193,296)

 

114,261

 

(2,798,848)

Other operating income(expense)

 

(77,956)

 

(119,852)

 

221,499

 

661,116

 

179,504

 

213,738

 

(324,238)

 

753,811

Operating income

 

2,226,258

 

469,468

 

256,566

 

420,906

 

211,154

 

244,858

 

(336,977)

 

3,492,233

Equity method income (expense)

 

58

 

(622)

 

8,793

 

(1,338)

 

36,573

 

1,277

 

22,593

 

67,334

Income tax expense

 

561,030

 

103,726

 

88,147

 

105,524

 

55,362

 

50,069

 

(61,802)

 

902,056

Profit for the period

W

1,638,324

 

368,677

 

241,858

 

310,343

 

190,056

 

194,782

 

(260,917)

 

2,683,123

Controlling interest

W

1,638,175

 

367,989

 

241,913

 

310,343

 

190,056

 

194,782

 

(317,035)

 

2,626,223

Non-controlling interests

 

149

 

688

 

(55)

 

-

 

-

 

-

 

56,118

 

56,900

 

 

6. Operating segments (continued)

63

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

(c) The following tables provide information of interest gains and losses from segment external customers and cross-sector interest gains and losses for the six-month periods ended June 30, 2024 and 2023.

 

 

 

June 30, 2024

 

 

Banking

 

Credit card

 

Securities

 

Insurance

 

Credit

 

Others

 

Consolidation adjustment(*)

 

Total

Net interest income

from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External customers (*)

W

4,455,703

 

992,184

 

285,014

 

(76,154)

 

97,713

 

(1,947)

 

(114,800)

 

5,637,713

Internal transactions

 

(55)

 

(32,433)

 

(8,106)

 

563

 

(13,330)

 

46,828

 

6,533

 

-

 

W

4,455,648

 

959,751

 

276,908

 

(75,591)

 

84,383

 

44,881

 

(108,267)

 

5,637,713

 

 

 

 

June 30, 2023

 

 

Banking

 

Credit card

 

Securities

 

Insurance

 

Credit

 

Others

 

Consolidation adjustment(*)

 

Total

Net interest income

from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External customers (*)

W

4,194,111

 

957,881

 

191,061

 

(116,717)

 

137,464

 

28,718

 

(124,493)

 

5,268,025

Internal transactions

 

(3,447)

 

(35,725)

 

(6,305)

 

4,082

 

(6,807)

 

42,593

 

5,609

 

-

 

W

4,190,664

 

922,156

 

184,756

 

(112,635)

 

130,657

 

71,311

 

(118,884)

 

5,268,025

(*) Consolidated adjustment to net interest income(expense) from external customers is from the securities and others which were measured at fair values as a part of business combination accounting.

 

 

(d) The following tables provide information of net fees and commission income (expense) of each operating segment for the six-month periods ended June 30, 2024 and 2023.

 

 

 

June 30, 2024

 

 

Banking

 

Credit card

 

Securities

 

Insurance

 

Credit

 

Others

 

Consolidation adjustment

 

Total

Net fees and

commission

income(loss) from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External customers

W

464,496

 

537,133

 

282,511

 

608

 

6,318

 

128,243

 

-

 

1,419,309

Internal transactions

 

(20,621)

 

(25,742)

 

(2,841)

 

(3,164)

 

841

 

39,849

 

11,678

 

-

 

W

443,875

 

511,391

 

279,670

 

(2,556)

 

7,159

 

168,092

 

11,678

 

1,419,309

 

 

 

 

June 30, 2023

 

 

Banking

 

Credit card

 

Securities

 

Insurance

 

Credit

 

Others

 

Consolidation adjustment

 

Total

Net fees and

commission

income(loss) from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External customers

W

415,961

 

427,882

 

255,378

 

1,214

 

6,091

 

146,202

 

-

 

1,252,728

Internal transactions

 

(21,813)

 

(6,683)

 

(4,378)

 

(2,568)

 

1,804

 

41,418

 

(7,780)

 

-

 

W

394,148

 

421,199

 

251,000

 

(1,354)

 

7,895

 

187,620

 

(7,780)

 

1,252,728

 

64

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

7. Cash and due from banks at amortized cost

 

Restricted due from banks in accordance with Related Regulations or Acts as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

 

Related Regulations or Acts

Due from banks

in Korean won:

 

 

 

 

 

 

  Reserve deposits

W

11,826,930

 

10,909,697

 

Article 55 of the Bank of Korea Act

  Other deposits

 

1,466,174

 

1,633,297

 

Article 74 of the Capital Markets and Financial Investment Business Act, etc.

 

 

13,293,104

 

12,542,994

 

 

 

 

 

 

 

 

 

Due from banks

in foreign currency

 

6,029,119

 

7,148,169

 

Articles of the Bank of Korea Act,

New York State Banking Act, derivatives related, etc.

 

W

19,322,223

 

19,691,163

 

 

 

 

 

65

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

8. Financial assets at fair value through profit or loss

 

Financial assets at fair value through profit or loss as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Debt instruments:

 

 

 

 

Governments

W

8,797,569

 

6,392,302

Financial institutions

 

11,699,193

 

12,590,217

Corporations

 

11,706,057

 

10,949,245

Stocks with put option

 

645,205

 

651,045

Equity investment with put option

 

5,259,174

 

5,019,107

Beneficiary certificates

 

15,466,606

 

14,489,698

Commercial papers

 

8,123,083

 

8,631,502

CMA

 

4,178,668

 

3,473,984

Others(*)

 

3,278,625

 

3,274,992

 

 

69,154,180

 

65,472,092

 

 

 

 

 

Equity instruments:

 

 

 

 

  Stocks

 

3,616,630

 

3,732,637

  Equity investment

 

7,207

 

8,093

  Others

 

122,718

 

110,731

 

 

3,746,555

 

3,851,461

 

 

72,900,735

 

69,323,553

Others:

 

 

 

 

Loans

 

1,453,475

 

1,758,562

Due from banks

 

32,769

 

30,743

Gold/silver deposits

 

100,481

 

103,706

 

W

74,487,460

 

71,216,564

(*) As of June 30, 2024 and December 31, 2023, restricted reserve for claims of customers’ deposits (trusts) are W 2,008,822 million and W1,841,473 million, respectively.

 

66

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

9. Derivatives

 

(a) The notional amounts of derivatives outstanding as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Foreign currency related:

 

 

 

 

Over the counter:

 

 

 

 

Currency forwards

W

165,705,440

 

142,779,721

Currency swaps

 

53,299,810

 

45,159,344

Currency options

 

1,565,509

 

1,265,326

 

 

220,570,759

 

189,204,391

Exchange traded:

 

 

 

 

Currency futures

 

1,845,827

 

2,189,413

 

 

222,416,586

 

191,393,804

Interest rates related:

 

 

 

 

Over the counter:

 

 

 

 

Interest rate forwards and swaps

 

49,876,425

 

41,950,711

Interest rate options

 

849,557

 

516,577

 

 

50,725,982

 

42,467,288

Exchange traded:

 

 

 

 

Interest rate futures

 

4,724,644

 

3,943,763

Interest rate swaps(*)

 

109,502,470

 

94,186,140

 

 

114,227,114

 

98,129,903

 

 

164,953,096

 

140,597,191

Credit related:

 

 

 

 

Over the counter:

 

 

 

 

Credit swaps

 

4,865,191

 

4,178,441

 

 

 

 

 

Equity related:

 

 

 

 

Over the counter:

 

 

 

 

Equity swaps and forwards

 

4,370,668

 

4,100,836

Equity options

 

4,682,695

 

3,552,337

 

 

9,053,363

 

7,653,173

Exchange traded:

 

 

 

 

Equity futures

 

2,198,961

 

2,764,186

Equity options

 

148,518

 

240,603

 

 

2,347,479

 

3,004,789

 

 

11,400,842

 

10,657,962

Commodity related:

 

 

 

 

Over the counter:

 

 

 

 

Commodity swaps and forwards

 

1,871,075

 

1,034,225

Commodity options

 

-

 

8,000

 

 

1,871,075

 

1,042,225

Exchange traded:

 

 

 

 

Commodity futures and options

 

158,412

 

93,004

 

 

2,029,487

 

1,135,229

Hedge:

 

 

 

 

Currency forwards

 

2,339,674

 

2,142,233

Currency swaps

 

6,437,041

 

4,448,030

Interest rate forwards and swaps

 

13,119,891

 

12,469,580

 

 

21,896,606

 

19,059,843

 

W

427,561,808

 

367,022,470

(*) The notional amounts of derivatives outstanding those will be settled in the ‘Central Counter Party (CCP)’ system.

 

67

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

9. Derivatives (continued)

 

(b) Fair values of derivative instruments as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

 

 

Assets

 

Liabilities

 

Assets

 

Liabilities

Foreign currency related:

 

 

 

 

 

 

 

 

Over the counter:

 

 

 

 

 

 

 

 

   Currency forwards

W

2,767,725

 

1,822,462

 

1,558,662

 

1,402,185

   Currency swaps

 

1,790,690

 

2,199,754

 

1,431,614

 

1,206,156

   Currency options

 

13,921

 

14,785

 

13,128

 

13,065

 

 

4,572,336

 

4,037,001

 

3,003,404

 

2,621,406

Exchange traded:

 

 

 

 

 

 

 

 

Currency futures

 

159

 

35

 

30

 

1,102

 

 

4,572,495

 

4,037,036

 

3,003,434

 

2,622,508

Interest rates related:

 

 

 

 

 

 

 

 

Over the counter:

 

 

 

 

 

 

 

 

   Interest rate forwards and swaps

 

675,317

 

849,380

 

683,814

 

902,989

   Interest rate options

 

3,387

 

27,445

 

4,011

 

17,038

 

 

678,704

 

876,825

 

687,825

 

920,027

Exchange traded:

 

 

 

 

 

 

 

 

   Interest rate futures

 

1,666

 

4,239

 

2,253

 

11,757

 

 

680,370

 

881,064

 

690,078

 

931,784

Credit related:

 

 

 

 

 

 

 

 

Over the counter:

 

 

 

 

 

 

 

 

Credit swaps

 

474,819

 

9,150

 

473,582

 

10,366

 

 

 

 

 

 

 

 

 

Equity related:

 

 

 

 

 

 

 

 

Over the counter:

 

 

 

 

 

 

 

 

Equity swap and forwards

 

86,683

 

56,873

 

166,010

 

350,768

Equity options

 

63,782

 

82,771

 

7,137

 

165,834

 

 

150,465

 

139,644

 

173,147

 

516,602

Exchange traded:

 

 

 

 

 

 

 

 

Equity futures

 

17,065

 

39,465

 

66,356

 

16,346

Equity options

 

24,741

 

877

 

47,167

 

16,735

 

 

41,806

 

40,342

 

113,523

 

33,081

 

 

192,271

 

179,986

 

286,670

 

549,683

Commodity related:

 

 

 

 

 

 

 

 

Over the counter:

 

 

 

 

 

 

 

 

Commodity swaps and forwards

 

1,183

 

95,742

 

3,314

 

84,957

Exchange traded:

 

 

 

 

 

 

 

 

Commodity futures and options

 

493

 

9,999

 

2,122

 

638

 

 

1,676

 

105,741

 

5,436

 

85,595

Hedge:

 

 

 

 

 

 

 

 

Currency forwards

 

5,507

 

100,203

 

21,580

 

34,492

Currency swaps

 

287,126

 

133,028

 

111,024

 

99,093

Interest rate forwards and swaps

 

103,303

 

793,545

 

119,617

 

704,895

 

 

395,936

 

1,026,776

 

252,221

 

838,480

 

W

6,317,567

 

6,239,753

 

4,711,421

 

5,038,416

 

68

 


SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2023 and 2022(Unaudited), and December 31, 2022

(In millions of won)

 

9. Derivatives (continued)

 

(c) Gain or loss on valuation of derivatives for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-

month

 

Six-

month

 

Three-

month

 

Six-

month

Foreign currency related:

 

 

 

 

 

 

 

 

  Over the counter:

 

 

 

 

 

 

 

 

    Currency forwards

W

284,393

 

841,345

 

(187,554)

 

113,552

    Currency swaps

 

(308,183)

 

(807,385)

 

(33,652)

 

(142,976)

    Currency options

 

1,290

 

2,414

 

950

 

580

 

 

(22,500)

 

36,374

 

(220,256)

 

(28,844)

Exchange traded:

 

 

 

 

 

 

 

 

Currency futures

 

(33)

 

53

 

1,340

 

242

 

 

(22,533)

 

36,427

 

(218,916)

 

(28,602)

Interest rates related:

 

 

 

 

 

 

 

 

  Over the counter:

 

 

 

 

 

 

 

 

    Interest rate forwards and swaps

 

41,100

 

83,795

 

17,400

 

88,398

    Interest rate options

 

(431)

 

37

 

(2,654)

 

(2,949)

 

 

40,669

 

83,832

 

14,746

 

85,449

Exchange traded:

 

 

 

 

 

 

 

 

Interest rate futures, etc.

 

(3,271)

 

(2,573)

 

14,729

 

9,521

 

 

37,398

 

81,259

 

29,475

 

94,970

Credit related:

 

 

 

 

 

 

 

 

  Over the counter:

 

 

 

 

 

 

 

 

    Credit swaps

 

750

 

10,541

 

6,284

 

(2,566)

 

 

 

 

 

 

 

 

 

Equity related:

 

 

 

 

 

 

 

 

Over the counter:

 

 

 

 

 

 

 

 

    Equity swap and forwards

 

(32,447)

 

42,416

 

(45,949)

 

45,654

    Equity options

 

73,022

 

36,438

 

(19,230)

 

(32,691)

 

 

40,575

 

78,854

 

(65,179)

 

12,963

Exchange traded:

 

 

 

 

 

 

 

 

    Equity futures

 

(52,500)

 

(22,400)

 

55,235

 

(20,124)

    Equity options

 

10,314

 

3,530

 

(45,394)

 

13,615

 

 

(42,186)

 

(18,870)

 

9,841

 

(6,509)

 

 

(1,611)

 

59,984

 

(55,338)

 

6,454

Commodity related:

 

 

 

 

 

 

 

 

Over the counter:

 

 

 

 

 

 

 

 

    Commodity swaps and forwards

 

(2,599)

 

(9,564)

 

(40,134)

 

6,289

Commodity options

 

-

 

-

 

917

 

1,503

 

(2,599)

 

(9,564)

 

(39,217)

 

7,792

Exchange traded:

 

 

 

 

 

 

 

 

Commodity futures and options

 

(9,069)

 

(9,505)

 

6,415

 

3,280

 

 

(11,668)

 

(19,069)

 

(32,802)

 

11,072

Hedge:

 

46,812

 

(90,915)

 

(104,358)

 

66,441

 

W

49,148

 

78,227

 

(375,655)

 

147,769

 

 

69

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

9. Derivatives (continued)

 

(d) Nominal amounts and average hedge ratio for hedging instruments as of June 30, 2024 and December 31, 2023 are as follows:

 

 

June 30, 2024

 

 

Less than

1 year

 

1~2

years

 

2~3

years

 

3~4

years

 

4~5

years

 

More than 5 years

 

Total

Interest risk:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Nominal values:

W

1,600,681

 

1,676,637

 

1,945,726

 

2,294,840

 

1,447,472

 

4,154,535

 

13,119,891

Average price condition (*1):

 

1.71%

 

1.98%

 

1.36%

 

1.65%

 

1.38%

 

0.39%

 

1.23%

 Average hedge ratio:

 

100%

 

100%

 

100%

 

100%

 

100%

 

100%

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange risk(*2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nominal values:

 

2,188,807

 

1,875,647

 

2,383,089

 

951,299

 

3,075,136

 

52,910

 

10,526,888

Average hedge ratio:

 

100%

 

100%

 

100%

 

100%

 

100%

 

100%

 

100%

(*1) Interest rate swaps consist of 3M CD, USD SOFR, 3M Euribor, and 3M AUD Bond.

(*2) The average exchange rates of net investment hedge instruments are USD/KRW 1,264.45 JPY/KRW 8.74, EUR/KRW 1,393.09, GBP/KRW 1,554.57, AUD/KRW 877.38, CAD/KRW 991.06, CNY/KRW 189.50, SEK/KRW 127.38.

 

 

 

December 31, 2023

 

 

Less than

1 year

 

1~2

years

 

2~3

years

 

3~4

years

 

4~5

years

 

More than 5 years

 

Total

Interest risk:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Nominal values:

W

3,038,263

 

609,182

 

2,143,914

 

804,873

 

1,935,599

 

3,937,749

 

12,469,580

Average price condition (*1):

 

0.82%

 

3.02%

 

1.64%

 

1.65%

 

1.37%

 

0.74%

 

1.18%

 Average hedge ratio:

 

100%

 

100%

 

100%

 

100%

 

100%

 

100%

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange risk(*2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nominal values:

 

1,871,327

 

1,335,798

 

2,139,371

 

974,113

 

1,687,341

 

49,109

 

8,057,059

Average hedge ratio:

 

100%

 

100%

 

100%

 

100%

 

100%

 

100%

 

100%

(*1) Interest rate swaps consist of 3M CD, USD SOFR, 3M Euribor, and 3M AUD Bond.

(*2) The average exchange rates of net investment hedge instruments are USD/KRW 1,235.14, JPY/KRW 9.46, EUR/KRW 1,358.46, GBP/KRW 1,547.81, AUD/KRW 865.53, CAD/KRW 921.27, CNY/KRW 177.98, SEK/KRW 126.18.

 

70

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

10. Securities at fair value through other comprehensive income and securities at amortized cost

 

(a) Details of securities at FVOCI and securities at amortized cost as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Securities at FVOCI:

 

 

 

 

 Debt securities:

 

 

 

 

   Government bonds

W

42,631,830

 

44,418,450

   Financial institutions bonds

 

21,325,953

 

21,303,402

   Corporate bonds and others

 

23,116,424

 

22,915,148

 

 

87,074,207

 

88,637,000

 Equity securities(*):

 

 

 

 

   Stocks

 

1,601,235

 

1,527,182

   Equity investments

 

5,083

 

2,153

   Others

 

141,248

 

145,644

 

 

1,747,566

 

1,674,979

 

 

88,821,773

 

90,311,979

Securities at amortized cost:

 

 

 

 

 Debt securities:

 

 

 

 

   Government bonds

 

22,969,524

 

22,787,609

   Financial institutions bonds

 

5,661,264

 

5,864,626

   Corporate bonds and others

 

7,376,916

 

7,034,252

 

 

36,007,704

 

35,686,487

W

124,829,477

 

125,998,466

 

(*) Equity securities listed in the table above are classified as securities measured at other comprehensive income, as the Group is holding the securities due to a policy requirement.

 

 

 

 

71

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

10. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

 

(b) Changes in carrying value of debt securities at fair value through other comprehensive income and securities at amortized cost for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

Debt securities at fair value through other comprehensive income

 

Debt securities at amortized cost

 

 

12-month expected

 credit losses

 

Lifetime expected

 credit losses

 

Total

 

12-month expected

credit losses

 

Lifetime expected

credit losses

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

W

88,545,051

 

91,949

 

88,637,000

 

35,690,387

 

7,523

 

35,697,910

Transfer (from)to 12-month expected credit losses

 

-

 

-

 

-

 

-

 

-

 

-

Transfer (from)to lifetime expected credit losses

 

-

 

-

 

-

 

-

 

-

 

-

Net increase and decrease(*)

 

(1,572,144)

 

9,351

 

(1,562,793)

 

320,718

 

99

 

320,817

Ending balance

W

86,972,907

 

101,300

 

87,074,207

 

36,011,105

 

7,622

 

36,018,727

 

72

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

10. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

 

(b) Changes in carrying value of debt securities at fair value through other comprehensive income and securities at amortized cost for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

 

 

Debt securities at fair value through other comprehensive income

 

Debt securities at amortized cost

 

 

12-month expected

 credit losses

 

Lifetime expected

 credit losses

 

Total

 

12-month expected

credit losses

 

Lifetime expected

credit losses

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

W

83,729,377

 

67,198

 

83,796,575

 

33,371,599

 

10,515

 

33,382,114

Transfer (from)to 12-month expected credit losses

 

18,873

 

(18,873)

 

-

 

-

 

-

 

-

Transfer (from)to lifetime expected credit losses

 

(47,209)

 

47,209

 

-

 

-

 

-

 

-

Net increase and decrease(*)

 

4,844,010

 

(3,585)

 

4,840,425

 

2,318,788

 

(2,992)

 

2,315,796

Ending balance

W

88,545,051

 

91,949

 

88,637,000

 

35,690,387

 

7,523

 

35,697,910

(*) Included the effects from changes in purchase, disposal, repayment, valuation, changes in foreign exchange rate and amortization of fair value adjustments recognized through business combination accountings and the others.

 

73

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

10. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

 

(c) Changes in allowance for credit loss of debt securities at fair value through other comprehensive income and debt securities at amortized cost for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

Debt securities at fair value through other comprehensive income

 

Debt securities at amortized cost

 

 

12-month expected
credit losses

 

Lifetime expected
credit losses

 

Total

 

12-month expected
credit losses

 

Lifetime expected credit losses

 

Total

Beginning allowance

W

41,568

 

909

 

42,477

 

11,283

 

140

 

11,423

Transfer (from) to

 12-month expected credit losses

 

-

 

-

 

-

 

-

 

-

 

-

Transfer to lifetime expected credit losses

 

-

 

-

 

-

 

-

 

-

 

-

Reversal

 

(9,415)

 

(558)

 

(9,973)

 

(1,420)

 

(27)

 

(1,447)

Disposal and others(*)

 

(928)

 

15

 

(913)

 

1,045

 

2

 

1,047

Ending balance

W

31,225

 

366

 

31,591

 

10,908

 

115

 

11,023

 

74

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

10. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

 

(c) Changes in allowance for credit loss of debt securities at fair value through other comprehensive income and debt securities at amortized cost for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

 

 

Debt securities at fair value through other comprehensive income

 

Debt securities at amortized cost

 

 

12 months expected credit losses

 

Life time expected credit losses

 

Total

 

12 months expected credit losses

 

Life time expected credit losses

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

W

40,501

 

113

 

40,614

 

10,759

 

157

 

10,916

Transfer (from)to 12-month expected credit losses

 

14

 

(14)

 

-

 

-

 

-

 

-

Transfer (from)to lifetime expected credit losses

 

(111)

 

111

 

-

 

-

 

-

 

-

Provision (reversal)

 

1,573

 

698

 

2,271

 

(113)

 

(23)

 

(136)

Disposal and others(*)

 

(409)

 

1

 

(408)

 

637

 

6

 

643

Ending balance

W

41,568

 

909

 

42,477

 

11,283

 

140

 

11,423

(*) Included the effects from changes in foreign exchange rate, debt restructuring, investment conversion.

75

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

10. Securities at fair value through other comprehensive income and securities at amortized cost (continued)

 

(d) Gain or loss on disposal of securities at fair value through other comprehensive income and securities at amortized cost for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-month

Six-

month

 

Three-month

Six-

month

Gain on disposal of securities at FVOCI

W

38,040

72,618

 

15,668

39,915

Loss on disposal of securities at FVOCI

 

(32,878)

(45,338)

 

(10,069)

(53,474)

Gain on disposal of securities at amortized cost (*)

 

-

-

 

-

358

Loss on disposal of securities at amortized cost (*)

 

(2)

(4)

 

(1)

(2)

 

W

5,160

27,276

 

5,598

(13,203)

(*) The disposal is due to the issuers’ exercise of early redemption options.

 

(e) Income or loss on equity securities at fair value through other comprehensive income

 

i) The Group recognizes dividends, amounting to W 60,912 million and W 56,423 million, related to equity securities at fair value through other comprehensive income for the six-month periods ended June 30, 2024 and 2023, respectively.

 

ii) The details of disposal of equity securities at fair value through other comprehensive income for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30,2024

 

June 30, 2023

 

 

Stocks acquired by investment conversion (*)

Fair value at the date of disposal

W

54,167

 

27,965

Cumulative net gain (loss) at the time of disposal

 

(3,392)

 

(1,713)

(*) The reason for the disposal is the disposal of stocks acquired by investment conversion.

 

 

76

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

11. Loans at amortized cost, etc.

 

(a) Loans at amortized cost for configuration by customer as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Retail loans

W

158,069,945

 

155,103,825

Corporate loans(*)

 

244,354,705

 

224,916,377

Public and other loans

 

5,066,312

 

4,427,500

Loans between banks

 

3,356,535

 

3,049,239

Credit card receivables

 

27,581,791

 

28,090,168

 

 

438,429,288

 

415,587,109

Discount

 

(22,882)

 

(23,063)

Deferred loan origination costs

 

536,211

 

505,986

 

 

438,942,617

 

416,070,032

Less: Allowance for credit loss

 

(4,418,585)

 

(4,330,470)

 

W

434,524,032

 

411,739,562

(*) Included loans for solo proprietor business, etc.

77

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

11. Loans at amortized cost, etc. (continued)

 

(b) Changes in carrying value of loans at amortized cost, etc. for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows:

 

 

 

 

June 30, 2024

 

 

Loan at amortized cost

 

 

Due from banks at amortized cost

and other financial assets

 

 

12 months

expected

credit lossess

 

Life time

expected

 credit lossess

 

Impaired

financial asset

 

 

12 months

expected

credit lossess

 

Life time

expected

credit lossess

 

Impaired financial asset

 

Total

Beginning balance

W

356,983,353

 

56,073,735

 

3,012,944

 

 

59,409,121

 

245,916

 

167,788

 

475,892,857

Transfer (from) to 12 months expected credit losses

 

11,360,121

 

(11,338,711)

 

(21,410)

 

 

32,999

 

(32,896)

 

(103)

 

-

Transfer (from) to lifetime expected credit losses

 

(19,645,540)

 

19,806,218

 

(160,678)

 

 

(52,461)

 

52,570

 

(109)

 

-

Transfer (from) to credit- impaired financial assets

 

(622,061)

 

(1,188,725)

 

1,810,786

 

 

(4,931)

 

(15,292)

 

20,223

 

-

Net increase and decrease(*1)

 

23,164,624

 

896,680

 

187,169

 

 

8,809,608

 

19,990

 

125,602

 

33,203,673

Write-off(*2)

 

-

 

-

 

(685,424)

 

 

-

 

-

 

(22,739)

 

(708,163)

Disposal

 

(4,257)

 

(82,822)

 

(603,385)

 

 

(88)

 

(3,916)

 

(119,490)

 

(813,958)

Ending balance

W

371,236,240

 

64,166,375

 

3,540,002

 

 

68,194,248

 

266,372

 

171,172

 

507,574,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(*1) The amount is due to execution, collection, debt restructuring, investment conversion, exchange rate fluctuation, etc.

(*2) The amount of uncollected loans currently in recovery (principal and interest) is W 10,072,196 million, which is written off as of June 30, 2024.

 

78

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

11. Loans at amortized cost, etc. (continued)

 

(b) Changes in carrying value of loans at amortized cost, etc. for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued ):

 

 

 

December 31, 2023

 

 

Loan at amortized cost

 

 

Due from banks at amortized cost

and other financial assets

 

 

12 months

expected

credit lossess

 

Life time

expected

 credit lossess

 

Impaired

financial asset

 

 

12 months

expected

credit lossess

 

Life time

expected

credit lossess

 

Impaired financial asset

 

Total

Beginning balance

W

363,925,280

 

45,545,875

 

2,078,630

 

 

49,701,131

 

165,723

 

87,512

 

461,504,151

Transfer (from) to 12 months expected credit losses

 

10,108,025

 

(10,093,443)

 

(14,582)

 

 

23,476

 

(23,305)

 

(171)

 

-

Transfer (from) to lifetime expected credit losses

 

(21,544,283)

 

21,593,531

 

(49,248)

 

 

(96,073)

 

96,096

 

(23)

 

-

Transfer (from) to credit- impaired financial assets

 

(994,625)

 

(759,558)

 

1,754,183

 

 

(9,110)

 

(40,985)

 

50,095

 

-

Net increase and decrease(*1)

 

5,544,988

 

(203,368)

 

1,534,744

 

 

9,789,697

 

48,392

 

60,859

 

16,775,312

Write-off(*2)

 

-

 

-

 

(1,649,416)

 

 

-

 

-

 

(28,665)

 

(1,678,081)

Disposal

 

(56,032)

 

(9,302)

 

(641,367)

 

 

-

 

(5)

 

(1,819)

 

(708,525)

Ending balance

W

356,983,353

 

56,073,735

 

3,012,944

 

 

59,409,121

 

245,916

 

167,788

 

475,892,857

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(*1) The amount is due to execution, collection, debt restructuring, investment conversion, exchange rate fluctuation, etc.

(*2) The amount of uncollected loans currently in recovery (principal and interest) is W 9,964,573 million, which is written off as of December 31, 2023.

 

79

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

11. Loans at amortized cost, etc. (continued)

 

(c) Changes in allowances for credit loss

 

Changes in allowances for credit loss of loans at amortized cost, etc. for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

Loan at amortized cost

 

 

Due from banks at amortized cost

and other financial assets

 

 

12 months

expected

credit lossess

 

Life time

expected

 credit lossess

 

Impaired

financial asset

 

 

12 months

expected

credit lossess

 

Life time

expected

credit lossess

 

Impaired financial asset

 

Total

Beginning balance

W

1,275,974

 

1,672,926

 

1,381,570

 

 

332,951

 

15,650

 

137,968

 

4,817,039

Transfer (from) to 12 months expected credit losses

 

212,735

 

(210,264)

 

(2,471)

 

 

1,281

 

(1,243)

 

(38)

 

-

Transfer (from) to lifetime expected credit losses

 

(130,437)

 

155,179

 

(24,742)

 

 

(2,169)

 

2,199

 

(30)

 

-

Transfer (from) to credit- impaired financial assets

 

(33,997)

 

(154,704)

 

188,701

 

 

(155)

 

(2,616)

 

2,771

 

-

Provision (reversal)

 

(43,513)

 

83,222

 

804,748

 

 

322

 

8

 

35,382

 

880,169

Write-off

 

-

 

-

 

(685,424)

 

 

-

 

-

 

(22,739)

 

(708,163)

Amortization of discount

 

-

 

-

 

(18,266)

 

 

-

 

-

 

-

 

(18,266)

Disposal

 

(49)

 

(16,935)

 

(213,647)

 

 

(1)

 

(6)

 

(11,220)

 

(241,858)

Collection

 

-

 

-

 

181,017

 

 

-

 

-

 

2,086

 

183,103

Others(*)

 

(2,162)

 

(1,346)

 

470

 

 

60,077

 

1

 

772

 

57,812

Ending balance

W

1,278,551

 

1,528,078

 

1,611,956

 

 

392,306

 

13,993

 

144,952

 

4,969,836

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

80

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

11. Loans at amortized cost, etc. (continued)

 

(c) Changes in allowances for credit loss (continued)

 

 

 

 

December 31, 2023

 

 

Loan at amortized cost

 

 

Due from banks at amortized cost

and other financial assets

 

 

12 months

expected

credit lossess

 

Life time

expected

 credit lossess

 

Impaired

financial asset

 

 

12 months

expected

credit lossess

 

Life time

expected

credit lossess

 

Impaired financial asset

 

Total

Beginning balance

W

1,050,037

 

1,486,338

 

1,114,438

 

 

296,346

 

10,440

 

74,621

 

4,032,220

Transfer (from) to 12 months expected credit losses

 

142,018

 

(140,871)

 

(1,147)

 

 

364

 

(299)

 

(65)

 

-

Transfer (from) to lifetime expected credit losses

 

(116,457)

 

137,751

 

(21,294)

 

 

(40,026)

 

40,041

 

(15)

 

-

Transfer (from) to credit- impaired financial assets

 

(23,309)

 

(82,713)

 

106,022

 

 

(228)

 

(37,000)

 

37,228

 

-

Provision

 

236,867

 

276,805

 

1,600,770

 

 

44,035

 

2,326

 

44,409

 

2,205,212

Write-off

 

-

 

-

 

(1,649,416)

 

 

-

 

-

 

(28,665)

 

(1,678,081)

Amortization of discount

 

-

 

-

 

(30,912)

 

 

-

 

-

 

-

 

(30,912)

Disposal

 

(36)

 

(426)

 

(96,685)

 

 

-

 

-

 

(178)

 

(97,325)

Collection

 

-

 

-

 

358,493

 

 

-

 

-

 

2,198

 

360,691

Others(*)

 

(13,146)

 

(3,958)

 

1,301

 

 

32,460

 

142

 

8,435

 

25,234

Ending balance

W

1,275,974

 

1,672,926

 

1,381,570

 

 

332,951

 

15,650

 

137,968

 

4,817,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(*) Other changes are due to debt restructuring, investment conversion and changes in foreign exchange rate, etc.

 

 

81

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates

 

(a) Investments in associates as of June 30, 2024 and December 31, 2023 are as follows:

Investees

 

Country

 

Reporting

Date

 

Ownership (%)

 

 

 

 

 

 

June

30, 2024

 

December 31, 2023

BNP Paribas Cardif Life Insurance (*1),(*7)

 

Korea

 

March 31, 2024

 

14.99

 

14.99

Shinhan-Neoplux Energy Newbiz Fund

 

Korea

 

June 30, 2024

 

31.66

 

31.66

Shinhan-Albatross tech investment Fund (*1)

 

Korea

 

May 31, 2024

 

50.00

 

50.00

KCGI-SingA330-A Private Special Asset Investment Trust

 

Korea

 

June 30, 2024

 

23.89

 

23.89

VOGO Debt Strategy Qualified IV Private

 

Korea

 

June 30, 2024

 

20.00

 

20.00

Shinhan-Midas Dong-A Secondary Fund

 

Korea

 

June 30, 2024

 

50.00

 

50.00

ShinHan – Soo Young Entrepreneur Investment Fund No.1

 

Korea

 

June 30, 2024

 

24.00

 

24.00

Shinhan Praxis K-Growth Global Private Equity Fund (*7)

 

Korea

 

June 30, 2024

 

14.15

 

14.15

Kiwoom Milestone Professional Private Real Estate Trust 19

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Shinhan Global Healthcare Fund 1 (*7)

 

Korea

 

June 30, 2024

 

3.13

 

4.41

KB NA Hickory Private Special Asset Fund

 

Korea

 

June 30, 2024

 

37.50

 

37.50

Koramco Europe Core Private Placement Real Estate Fund No.2-2

 

Korea

 

June 30, 2024

 

44.02

 

44.02

KDBC-Midas Dong-A Global contents Fund

 

Korea

 

June 30, 2024

 

23.26

 

23.26

Shinhan-Nvestor Liquidity Solution Fund

 

Korea

 

June 30, 2024

 

24.92

 

24.92

Shinhan AIM FoF Fund 1-A

 

Korea

 

June 30, 2024

 

25.00

 

25.00

IGIS Global Credit Fund 150-1

 

Korea

 

June 30, 2024

 

25.00

 

25.00

Korea Omega Project Fund III

 

Korea

 

June 30, 2024

 

23.53

 

23.53

Genesis North America Power Company No.1 PEF

 

Korea

 

June 30, 2024

 

43.84

 

43.84

SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3

 

Korea

 

June 30, 2024

 

23.33

 

23.33

KOREA FINANCE SECURITY CO., LTD. (*1),(*7)

 

Korea

 

March 31, 2024

 

14.91

 

14.91

MIEL CO.,LTD. (*1), (*2)

 

Korea

 

December 31, 2023

 

28.77

 

28.77

AIP Transportation Specialized Privately Placed Fund Trust #1

 

Korea

 

June 30, 2024

 

35.73

 

35.73

Kiwoom-Shinhan Innovation Fund I

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Midas Asset Global CRE Debt Private Fund No.6 (*5)

 

Korea

 

-

 

-

 

40.10

Samchully Midstream Private Placement Special Asset Fund 5-4

 

Korea

 

June 30, 2024

 

42.92

 

42.92

SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.3

 

Korea

 

June 30, 2024

 

20.00

 

20.00

NH-Amundi Global Infrastructure Trust 14 (*5)

 

Korea

 

-

 

-

 

30.00

Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37 (*6)

 

Korea

 

June 30, 2024

 

60.00

 

60.00

Milestone Private Real Estate Fund 3

 

Korea

 

June 30, 2024

 

32.06

 

32.06

Rifa Private Real Estate Investment Trust 31

 

Korea

 

June 30, 2024

 

31.31

 

31.31

SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2

 

Korea

 

June 30, 2024

 

21.27

 

21.27

FuturePlay-Shinhan TechInnovation Fund 1

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Stonebridge Corporate 1st Fund

 

Korea

 

June 30, 2024

 

44.12

 

44.12

Vogo Realty Partners Private Real Estate Fund V

 

Korea

 

June 30, 2024

 

21.64

 

21.64

Korea Credit Bureau (*1),(*7)

 

Korea

 

March 31, 2024

 

9.00

 

9.00

Goduck Gangil1 PFV Co., Ltd. (*1),(*7)

 

Korea

 

March 31, 2024

 

1.04

 

1.04

SBC PFV Co., Ltd. (*1),(*7),(*8)

 

Korea

 

March 31, 2024

 

25.00

 

25.00

NH-amundi global infra private fund 16

 

Korea

 

June 30, 2024

 

50.00

 

50.00

SH BNCT Professional Investment Type Private Special Asset Investment Trust (*9)

 

Korea

 

June 30, 2024

 

72.50

 

72.50

DWS Global Professional Investment Type Private Real Estate Investment Trust No. 24 (*5)

 

Korea

 

-

 

-

 

52.28

Sparklabs-Shinhan Opportunity Fund 1

 

Korea

 

June 30, 2024

 

49.50

 

49.50

IGIS Real-estate Private Investment Trust No.33

 

Korea

 

June 30, 2024

 

40.86

 

40.86

Goduck Gangil10 PFV Co., Ltd. (*1),(*7)

 

Korea

 

March 31, 2024

 

19.90

 

19.90

Fidelis Global Private Real Estate Trust No.2 (*6)

 

Korea

 

June 30, 2024

 

79.63

 

79.63

 

 

82

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(a) Investments in associates as of June 30, 2024 and December 31, 2023 are as follows:

 

Investees

 

Country

 

Reporting

date

 

Ownership (%)

 

 

 

 

 

 

June

30, 2024

 

December 31, 2023

AIP EURO PRIVATE REAL ESTATE TRUST No. 12

 

Korea

 

June 30, 2024

 

28.70

 

28.70

Shinhan Global Healthcare Fund 2 (*7)

 

Korea

 

June 30, 2024

 

13.68

 

13.68

Shinhan AIM Real Estate Fund No.2

 

Korea

 

June 30, 2024

 

30.00

 

30.00

Shinhan AIM Real Estate Fund No.1

 

Korea

 

June 30, 2024

 

21.01

 

21.01

SH Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust

 

Korea

 

June 30, 2024

 

22.02

 

22.02

SH Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust

 

Korea

 

June 30, 2024

 

29.19

 

29.19

SH Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2 (*6)

 

Korea

 

June 30, 2024

 

71.43

 

71.43

Korea Omega-Shinhan Project Fund I

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Samsung SRA Real Estate Professional Private 45

 

Korea

 

June 30, 2024

 

25.00

 

25.00

IBK Global New Renewable Energy Special Asset Professional Private2

 

Korea

 

June 30, 2024

 

28.98

 

28.98

VS Cornerstone Fund

 

Korea

 

June 30, 2024

 

41.18

 

41.18

NH-Amundi US Infrastructure Private Fund2

 

Korea

 

June 30, 2024

 

25.91

 

25.91

Kakao-Shinhan 1st TNYT Fund

 

Korea

 

June 30, 2024

 

48.62

 

48.62

Pacific Private Placement Real Estate Fund No.40

 

Korea

 

June 30, 2024

 

24.73

 

24.73

Mastern Private Real Estate Loan Fund No.2

 

Korea

 

June 30, 2024

 

33.57

 

33.57

LB Scotland Amazon Fulfillment Center Fund 29 (*6)

 

Korea

 

June 30, 2024

 

65.00

 

70.14

JR AMC Hungary Budapest Office Fund 16

 

Korea

 

June 30, 2024

 

32.57

 

32.57

EDNCENTRAL Co.,Ltd. (*7)

 

Korea

 

June 30, 2024

 

13.47

 

13.47

Gyeonggi-Neoplux Superman Fund

 

Korea

 

June 30, 2024

 

21.76

 

21.76

NewWave 6th Fund

 

Korea

 

June 30, 2024

 

30.00

 

30.00

Neoplux No.3 Private Equity Fund (*3)

 

Korea

 

June 30, 2024

 

10.00

 

10.00

PCC Amberstone Private Equity Fund I

 

Korea

 

June 30, 2024

 

21.67

 

21.67

KIAMCO POWERLOAN TRUST 4TH

 

Korea

 

June 30, 2024

 

47.37

 

47.37

Mastern Opportunity Seeking Real Estate Fund II

 

Korea

 

June 30, 2024

 

22.22

 

22.22

Neoplux Market-Frontier Secondary Fund (*3)

 

Korea

 

June 30, 2024

 

19.74

 

19.74

Synergy Green New Deal 1st New Technology Business Investment Fund

 

Korea

 

June 30, 2024

 

28.17

 

28.17

KIAMCO Vietnam Solar Special Asset Private Investment Trust

 

Korea

 

June 30, 2024

 

50.00

 

50.00

SHINHAN-NEO Core Industrial Technology Fund

 

Korea

 

June 30, 2024

 

49.75

 

49.75

SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2

 

Korea

 

June 30, 2024

 

30.00

 

30.00

Eum Private Equity Fund No.7

 

Korea

 

June 30, 2024

 

21.00

 

21.00

Kiwoom Hero No.4 Private Equity Fund

 

Korea

 

June 30, 2024

 

21.05

 

21.05

Vogo Canister Professional Trust Private Fund I (*5)

 

Korea

 

-

 

-

 

36.74

Timefolio The Venture-V second

 

Korea

 

June 30, 2024

 

20.73

 

20.73

Shinhan Smilegate Global PEF I (*7)

 

Korea

 

June 30, 2024

 

14.21

 

14.21

Genesis Eco No.1 PEF

 

Korea

 

June 30, 2024

 

29.00

 

29.00

SHINHAN-NEO Market-Frontier 2nd Fund

 

Korea

 

June 30, 2024

 

42.70

 

42.70

NH-Synergy Core Industrial New Technology Fund (*5)

 

Korea

 

-

 

-

 

36.93

J& Moorim Jade Investment Fund

 

Korea

 

June 30, 2024

 

24.89

 

24.89

Ulmus SHC innovation investment fund

 

Korea

 

June 30, 2024

 

24.04

 

24.04

T Core Industrial Technology 1st Venture PEF

 

Korea

 

June 30, 2024

 

31.47

 

31.47

Fine Value POST IPO No.5 Private Equity Fund (*5)

 

Korea

 

-

 

-

 

40.00

TI First Property Private Investment Trust 1

 

Korea

 

June 30, 2024

 

40.00

 

40.00

IBKC Global Contents Investment Fund (*5)

 

Korea

 

-

 

-

 

24.39

 

 

83

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

(a) Investments in associates as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

Investees

 

Country

 

Reporting

date

 

Ownership (%)

 

 

 

 

 

 

June

30, 2024

 

December 31, 2023

Kiwoom-Shinhan Innovation Fund 2

 

Korea

 

June 30, 2024

 

42.86

 

42.86

ETRI Holdings-Shinhan 1st Unicorn Fund

 

Korea

 

June 30, 2024

 

50.00

 

50.00

SJ ESG Innovative Growth Fund

 

Korea

 

June 30, 2024

 

28.57

 

28.57

AVES 1st Corporate Recovery Private Equity Fund (*4)

 

Korea

 

June 30, 2024

 

76.19

 

76.19

Leverent-Shinhan Vista New Technology Investment Fund (*3)

 

Korea

 

June 30, 2024

 

13.41

 

13.41

JS Shinhan Private Equity Fund (*3)

 

Korea

 

June 30, 2024

 

3.85

 

3.85

Daishin Newgen New Technology Investment Fund 1st (*6)

 

Korea

 

June 30, 2024

 

50.60

 

50.60

META ESG Private Equity Fund I

 

Korea

 

June 30, 2024

 

27.40

 

27.40

Shinhan VC tomorrow venture fund 1

 

Korea

 

June 30, 2024

 

39.62

 

39.62

H-IOTA Fund

 

Korea

 

June 30, 2024

 

24.81

 

24.81

Stonebridge-Shinhan Unicorn Secondary Fund

 

Korea

 

June 30, 2024

 

26.01

 

26.01

Tres-Yujin Trust

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Shinhan-Time mezzanine blind Fund

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Capstone REITs No.26

 

Korea

 

June 30, 2024

 

50.00

 

50.00

JB Incheon-Bucheon REITS No.54

 

Korea

 

June 30, 2024

 

39.31

 

39.31

Hankook Smart Real Asset Investment Trust No.3

 

Korea

 

June 30, 2024

 

33.33

 

33.33

JB Hwaseong-Hadong REITs No.53

 

Korea

 

June 30, 2024

 

31.03

 

31.03

KB Oaktree Trust No.3

 

Korea

 

June 30, 2024

 

33.33

 

33.33

Daehan No.36 Office Asset Management Company (*5)

 

Korea

 

-

 

-

 

48.05

Rhinos Premier Mezzanine Private Investment Fund No.1

 

Korea

 

June 30, 2024

 

27.93

 

27.93

SH Real Estate Loan Investment Type Private Real Estate Investment Trust No.2

 

Korea

 

June 30, 2024

 

29.73

 

29.73

Shinhan JigaeNamsan Road Private Special Asset Investment Trust

 

Korea

 

June 30, 2024

 

24.85

 

24.85

SKS-Yozma Fund No.1

 

Korea

 

June 30, 2024

 

29.85

 

29.85

KB Distribution Private Real Estate 3-1

 

Korea

 

June 30, 2024

 

37.50

 

37.50

Pacific Private Investment Trust No.49-1 (*6)

 

Korea

 

June 30, 2024

 

79.28

 

79.28

KIWOOM Real estate private placement fund for normal investors No. 31 (*6)

 

Korea

 

June 30, 2024

 

60.00

 

60.00

RIFA Real estate private placement fund for normal investoes No. 51

 

Korea

 

June 30, 2024

 

40.00

 

40.00

Fivetree general private equity fund No.15 (*5)

 

Korea

 

-

 

-

 

49.98

Shinhan-Kunicorn first Fund

 

Korea

 

June 30, 2024

 

38.31

 

38.31

Shinhan-Quantum Startup Fund

 

Korea

 

June 30, 2024

 

49.18

 

49.18

Shinhan Simone Fund Ⅰ

 

Korea

 

June 30, 2024

 

38.46

 

38.46

Korea Investment develop seed Trust No.1

 

Korea

 

June 30, 2024

 

40.00

 

40.00

Tiger Green alpha Trust No.29 (*4)

 

Korea

 

June 30, 2024

 

95.24

 

95.24

STIC ALT Global II Private Equity Fund

 

Korea

 

June 30, 2024

 

21.74

 

21.74

NH-Brain EV Fund

 

Korea

 

June 30, 2024

 

25.00

 

25.00

DDI LVC Master Real Estate Investment Trust Co., Ltd. (*1),(*7)

 

Korea

 

March 31, 2024

 

15.00

 

15.00

Leverent-Frontier 4th Venture PEF

 

Korea

 

June 30, 2024

 

23.89

 

23.89

Find-Green New Deal 2nd Equity Fund

 

Korea

 

June 30, 2024

 

22.57

 

22.57

ShinhanFitrin 1st Technology Business Investment Association (*3)

 

Korea

 

June 30, 2024

 

16.17

 

16.17

Koramco Private Real Estate Fund 143

 

Korea

 

June 30, 2024

 

30.30

 

30.30

Korea Investment Top Mezzanine Private Real Estate Trust No.1

 

Korea

 

June 30, 2024

 

22.22

 

22.22

LB YoungNam Logistics Private Trust No.40

 

Korea

 

June 30, 2024

 

25.00

 

25.00

Shinhan-Cognitive Start-up Fund L.P.

 

Korea

 

June 30, 2024

 

32.77

 

32.77

Cornerstone J&M Fund I

 

Korea

 

June 30, 2024

 

26.67

 

26.67

Logisvalley Shinhan REIT Co.,Ltd. (*1)

 

Korea

 

March 31, 2024

 

20.27

 

20.27

DA Value-Honest New Technology Investment Fund 1

 

Korea

 

June 30, 2024

 

23.66

 

23.66

Shinhan-Ji and Tec Smart Innovation Fund

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Korea Investment Green Newdeal Infra Trust No.1

 

Korea

 

June 30, 2024

 

27.97

 

27.97

BTS 2nd Private Equity Fund (*1)

 

Korea

 

May 31, 2024

 

26.00

 

26.00

Shinhan Global Active REIT Co.Ltd.

 

Korea

 

June 30, 2024

 

20.37

 

20.37

NH-J&-IBKC Label Technology Fund

 

Korea

 

June 30, 2024

 

27.81

 

27.81

 

84

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

(a) Investments in associates as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

Investees

 

Country

 

Reporting

date

 

Ownership (%)

 

 

 

 

 

 

June

30, 2024

 

December 31, 2023

Hanyang Time Mezzanine Fund

 

Korea

 

June 30, 2024

 

28.57

 

28.57

Shinhan-Sneak Peek Biohealthcare Bounceback Fund

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Shinhan-isquare Venture PEF 1st

 

Korea

 

June 30, 2024

 

40.00

 

40.00

Capstone Develop Frontier Trust

 

Korea

 

June 30, 2024

 

21.43

 

21.43

Nextrade Co., Ltd. (*7)

 

Korea

 

June 30, 2024

 

8.00

 

8.00

SH 1.5years Maturity Investment Type Security Investment Trust No.2 (*5)

 

Korea

 

-

 

-

 

29.10

Eventus-IBKC LIB Fund

 

Korea

 

June 30, 2024

 

21.88

 

21.88

IBKC-Behigh Fund 1st

 

Korea

 

June 30, 2024

 

29.73

 

29.73

ON No.1 Private Equity Fund

 

Korea

 

June 30, 2024

 

28.57

 

28.57

Digital New Deal Kappa Private Equity Fund

 

Korea

 

June 30, 2024

 

24.75

 

24.75

IBKCJS New Technology Fund No.1

 

Korea

 

June 30, 2024

 

29.41

 

29.41

DS-Shinhan-JBWoori New Media New Technology Investment Fund No.1

 

Korea

 

June 30, 2024

 

20.83

 

20.83

VOGO Debt Strategy General Private Real Estate Investment Trust No. 18

 

Korea

 

June 30, 2024

 

28.57

 

28.57

Koramco IPO LEITS Mezzanine General Private Investment Trust No. 38 (*4)

 

Korea

 

June 30, 2024

 

75.00

 

75.00

TogetherKorea Private Investment Trust No. 6 (*6)

 

Korea

 

June 30, 2024

 

99.98

 

99.98

TogetherKorea Private Investment Trust No. 7 (*6)

 

Korea

 

June 30, 2024

 

99.98

 

99.98

Kiwoom Material Part Equipment New Technology Investment Fund No.3

 

Korea

 

June 30, 2024

 

34.75

 

34.75

Penture K-Content Investment Fund

 

Korea

 

June 30, 2024

 

21.95

 

21.96

2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund

 

Korea

 

June 30, 2024

 

30.00

 

30.00

Hana Alternative Investment Kosmes PCBO General PEF No. 1

 

Korea

 

June 30, 2024

 

37.04

 

37.04

Shinhan-timefolio Bio Development Investment Fund

 

Korea

 

June 30, 2024

 

48.39

 

48.39

Shinhan M&A-ESG Investment Fund

 

Korea

 

June 30, 2024

 

26.66

 

23.33

Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd.

 

Korea

 

June 30, 2024

 

28.43

 

28.43

KDBC meta-enter New Technology investment fund

 

Korea

 

June 30, 2024

 

27.89

 

27.89

Shinhan Time Secondary Blind New Technology Investment Trust

 

Korea

 

June 30, 2024

 

47.50

 

47.50

Shinhan DS Secondary Investment Fund

 

Korea

 

June 30, 2024

 

39.93

 

39.93

 

Shinhan-OpenWater Pre-IPO Fund-1

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Shinhan-CJ Technology Innovation Fund No. 1

 

Korea

 

June 30, 2024

 

40.00

 

40.00

Shinhan-Eco Venture Fund 2nd

 

Korea

 

June 30, 2024

 

40.00

 

40.00

Heungkuk-Shinhan The First Visionary Fund No.1

 

Korea

 

June 30, 2024

 

40.00

 

40.00

Koreainvestment-Shinhan-LEP K beauty

 

Korea

 

June 30, 2024

 

22.96

 

22.96

Shinhan HB Wellness 1st Fund

 

Korea

 

June 30, 2024

 

48.54

 

48.54

Korea real Asset Fund No.3

 

Korea

 

June 30, 2024

 

28.57

 

28.57

Timefolio Tech New Technology Investment Trust No.1

 

Korea

 

June 30, 2024

 

21.18

 

21.18

Igis Yongsan Office General PE Real Estate Inv. Trust No. 518

 

Korea

 

June 30, 2024

 

26.22

 

31.49

K-REITs Infrastructure Real Estate Fund

 

Korea

 

June 30, 2024

 

21.87

 

21.03

Samsung-dunamu Innovative IT Technology Investment Trust No. 1

 

Korea

 

June 30, 2024

 

22.99

 

22.99

Time Robotics New Technology Investment Trust

 

Korea

 

June 30, 2024

 

29.86

 

29.86

Ascent-welcome Tehcnology Investment Trust No.2

 

Korea

 

June 30, 2024

 

27.65

 

27.65

New Main Technology Investment Association No. 1

 

Korea

 

June 30, 2024

 

36.36

 

36.36

Igis General PE Real Estate Investment Trust 517-1 (*6)

 

Korea

 

June 30, 2024

 

96.30

 

96.30

Consus Osansegyo No.2

 

Korea

 

June 30, 2024

 

50.00

 

50.00

Mastern General Private Real Estate Investment Trust No.189(Type 1 Beneficiary Securities)

 

Korea

 

June 30, 2024

 

32.69

 

32.69

Shinhan AIM Private Fund of Fund 9-B

 

Korea

 

June 30, 2024

 

25.00

 

25.00

Shinhan General Private Real Estate Investment Trust No.3

 

Korea

 

June 30, 2024

 

20.75

 

20.75

NH Absolute Project L General Private Investment Trust (*5)

 

Korea

 

-

 

-

 

26.03

Paros Kosdaq Venture General Private Investment Trust No. 5

 

Korea

 

June 30, 2024

 

28.56

 

28.56

Happy Pet Life Care New Technology Investment Association No.2

 

Korea

 

June 30, 2024

 

30.00

 

30.00

Shinhan-soo secondary Fund (*6)

 

Korea

 

June 30, 2024

 

77.61

 

77.61

Douzone Techfin Co.,Ltd. (*1)

 

Korea

 

March 31, 2024

 

45.00

 

-

Songpa Biz-Cluster PFV Co.,Ltd. (*1),(*7),(*10)

 

Korea

 

March 31, 2024

 

27.40

 

-

Planeta PTE LTD.

 

Korea

 

June 30, 2024

 

33.33

 

-

 

 

85

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

(a) Investments in associates as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

Investees

 

Country

 

Reporting

date

 

Ownership (%)

 

 

 

 

 

 

June

30, 2024

 

December 31, 2023

HDFC Credila Financial Services (*7)

 

Korea

 

-

 

10.93

 

-

Shinhan-DS Mezzanine New Technology Investment Association No. 1 (*7)

 

Korea

 

June 30, 2024

 

15.09

 

-

KR Seocho Co., Ltd.

 

Korea

 

June 30, 2024

 

41.31

 

-

Shinhan Market-Frontier Investment Association No. 3

 

Korea

 

June 30, 2024

 

44.02

 

-

 

(*1) The most recent financial statements available are used for the equity method since the financial statements as of June 30, 2024 are not available. Significant trades and events occurred within the period are properly reflected.

(*2) In the course of the rehabilitation process, the shares were acquired through investment conversion. Although voting rights cannot be exercised during the rehabilitation process, normal voting rights are exercised because the rehabilitation process was completed before June 30, 2024. Also, it has been reclassified into the investments in associates.

(*3) As a managing partner, the Group has a significant influence over the investees.

(*4) As a limited partner, the Group does not have an ability to participate in policy-making processes to obtain economic benefit from the investees that would allow the Group to control the entity.

(*5) Excluded from the investments in associates due to full or partial disposal of shares, or loss of significant influence.

(*6) Although the ownership percentages are more than 50%, the Group applies the equity method accounting as the Group does not have an ability to participate in the financial and operating policy-making process.

(*7) Although the ownership percentages are less than 20%, the Group applies the equity method accounting since it participates in policy-making processes and therefore can exercise significant influence on investees.

(*8) The rate of Group’s voting rights is 4.65%.

(*9) Although the Group has a significant influence with ownership percentage more than 50%, the contribution was classified as investments in associates as the Group is not exposed to variable returns due to the payment guarantee for the entire investment amount.

(*10) The rate of Group’s voting rights is 19.86%.

 

86

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows:

 

 

 

June 30, 2024

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

BNP Paribas Cardif Life Insurance

W

39,272

 

-

 

(2,619)

 

91

 

-

 

36,744

Shinhan-Neoplux Energy Newbiz Fund

 

22,358

 

(9,196)

 

3,473

 

-

 

-

 

16,635

Shinhan-Albatross tech investment Fund

 

15,499

 

(4,645)

 

7,704

 

-

 

-

 

18,558

KCGI-SingA330-A Private Special Asset Investment Trust

 

4,609

 

(451)

 

163

 

-

 

-

 

4,321

VOGO Debt Strategy Qualified IV Private

 

6,532

 

(825)

 

266

 

-

 

-

 

5,973

Shinhan-Midas Dong-A Secondary Fund

 

4,301

 

(750)

 

(527)

 

-

 

-

 

3,024

ShinHan – Soo Young Entrepreneur Investment Fund No.1

 

4,862

 

-

 

5,649

 

-

 

-

 

10,511

Shinhan Praxis K-Growth Global Private Equity Fund

 

3,692

 

-

 

-

 

-

 

-

 

3,692

Kiwoom Milestone Professional Private Real Estate Trust 19(*1)

 

-

 

-

 

-

 

-

 

-

 

-

Shinhan Global Healthcare Fund 1(*1)

 

-

 

-

 

-

 

-

 

-

 

-

KB NA Hickory Private Special Asset Fund

 

24,096

 

(1,931)

 

453

 

-

 

-

 

22,618

Koramco Europe Core Private Placement Real Estate Fund No.2-2

 

18,799

 

-

 

-

 

-

 

(11,162)

 

7,637

KDBC-Midas Dong-A Global contents Fund

 

4,288

 

-

 

(1,658)

 

-

 

-

 

2,630

Shinhan-Nvestor Liquidity Solution Fund

 

6,088

 

-

 

(410)

 

-

 

-

 

5,678

Shinhan AIM FoF Fund 1-A

 

9,635

 

(631)

 

1,003

 

-

 

-

 

10,007

IGIS Global Credit Fund 150-1

 

4,286

 

(415)

 

736

 

-

 

-

 

4,607

Korea Omega Project Fund III

 

3,696

 

-

 

(185)

 

-

 

-

 

3,511

Genesis North America Power Company No.1 PEF

 

6,358

 

(1,190)

 

1,443

 

-

 

-

 

6,611

SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3

 

40,764

 

(14,628)

 

7,048

 

-

 

-

 

33,184

KOREA FINANCE SECURITY CO., LTD.

 

3,245

 

-

 

189

 

(1)

 

-

 

3,433

MIEL CO.,LTD. (*1)

 

-

 

-

 

-

 

-

 

-

 

-

AIP Transportation Specialized Privately Placed Fund Trust #1

 

46,372

 

-

 

8,349

 

-

 

-

 

54,721

Kiwoom-Shinhan Innovation Fund I

 

7,854

 

-

 

40

 

-

 

-

 

7,894

 

 

87

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

June 30, 2024

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

Midas Asset Global CRE Debt Private Fund No.6

W

54,881

 

(57,919)

 

3,038

 

-

 

-

 

-

Samchully Midstream Private Placement Special Asset Fund 5-4

 

33,163

 

-

 

-

 

-

 

-

 

33,163

SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.3

 

7,254

 

(160)

 

145

 

-

 

-

 

7,239

NH-Amundi Global Infrastructure Trust 14

 

18,728

 

(20,589)

 

1,861

 

-

 

-

 

-

Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37

 

35,265

 

(401)

 

1,434

 

-

 

-

 

36,298

Milestone Private Real Estate Fund 3

 

17,615

 

-

 

252

 

-

 

-

 

17,867

Rifa Private Real Estate Investment Trust 31

 

6,889

 

-

 

(269)

 

-

 

-

 

6,620

SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2

 

3,138

 

(32)

 

127

 

-

 

-

 

3,233

FuturePlay-Shinhan TechInnovation Fund 1

 

7,847

 

-

 

207

 

-

 

-

 

8,054

Stonebridge Corporate 1st Fund

 

4,142

 

-

 

(155)

 

-

 

-

 

3,987

Vogo Realty Partners Private Real Estate Fund V

 

10,792

 

(84)

 

(906)

 

-

 

-

 

9,802

Korea Credit Bureau

 

6,738

 

(90)

 

(550)

 

-

 

-

 

6,098

Goduck Gangil1 PFV Co., Ltd.

 

180

 

(148)

 

103

 

-

 

-

 

135

SBC PFV Co., Ltd.

 

30,774

 

8,750

 

(1,345)

 

-

 

-

 

38,179

NH-amundi global infra private fund 16

 

50,652

 

4,293

 

(20,724)

 

-

 

-

 

34,221

SH BNCT Professional Investment Type Private Special Asset Investment Trust

 

244,772

 

(16,070)

 

6,488

 

-

 

-

 

235,190

DWS Global Professional Investment Type Private Real Estate Investment Trust No. 24

 

18,110

 

(19,645)

 

1,536

 

-

 

-

 

1

Sparklabs-Shinhan Opportunity Fund 1

 

3,914

 

-

 

(667)

 

-

 

-

 

3,247

IGIS Real-estate Private Investment Trust No.33

 

15,271

 

(258)

 

569

 

-

 

-

 

15,582

Goduck Gangil10 PFV Co., Ltd.

 

5,081

 

(212)

 

897

 

-

 

-

 

5,766

Fidelis Global Private Real Estate Trust No.2

 

551

 

-

 

-

 

-

 

-

 

551

AIP EURO PRIVATE REAL ESTATE TRUST No. 12

 

48,619

 

(2,979)

 

2,919

 

-

 

-

 

48,559

 

 

88

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

June 30, 2024

Investees

 

Beginning

Balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

Shinhan Global Healthcare Fund 2 (*1)

W

-

 

-

 

-

 

-

 

-

 

-

Shinhan AIM Real Estate Fund No.2

 

26,678

 

1,760

 

(27,054)

 

-

 

-

 

1,384

Shinhan AIM Real Estate Fund No.1

 

51,873

 

2,613

 

(54,486)

 

-

 

-

 

-

SH Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust

 

34,781

 

(456)

 

2,241

 

-

 

-

 

36,566

SH Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust

 

20,053

 

-

 

693

 

-

 

-

 

20,746

SH Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2

 

17,516

 

(3,251)

 

338

 

-

 

-

 

14,603

Korea Omega-Shinhan Project Fund I

 

11,630

 

(1,957)

 

5,486

 

-

 

-

 

15,159

Samsung SRA Real Estate Professional Private 45

 

31,432

 

(1,763)

 

1,710

 

-

 

-

 

31,379

IBK Global New Renewable Energy Special Asset Professional Private2

 

32,296

 

-

 

492

 

-

 

-

 

32,788

VS Cornerstone Fund

 

3,280

 

-

 

7

 

-

 

-

 

3,287

NH-Amundi US Infrastructure Private Fund2

 

29,725

 

(1,800)

 

1,047

 

-

 

-

 

28,972

Kakao-Shinhan 1st TNYT Fund

 

19,866

 

-

 

4,428

 

-

 

-

 

24,294

Pacific Private Placement Real Estate Fund No.40

 

11,624

 

(372)

 

372

 

-

 

-

 

11,624

Mastern Private Real Estate Loan Fund No.2

 

3,040

 

(949)

 

94

 

-

 

-

 

2,185

LB Scotland Amazon Fulfillment Center Fund 29

 

30,928

 

1,246

 

(857)

 

-

 

-

 

31,317

JR AMC Hungary Budapest Office Fund 16

 

12,687

 

(347)

 

506

 

-

 

-

 

12,846

EDNCENTRAL Co.,Ltd. (*1)

 

-

 

-

 

-

 

-

 

-

 

-

Gyeonggi-Neoplux Superman Fund

 

5,056

 

-

 

(421)

 

-

 

-

 

4,635

NewWave 6th Fund

 

13,716

 

(822)

 

799

 

-

 

-

 

13,693

Neoplux No.3 Private Equity Fund

 

18,981

 

(404)

 

(2,147)

 

-

 

-

 

16,430

PCC Amberstone Private Equity Fund I

 

17,258

 

(1,469)

 

(27)

 

-

 

-

 

15,762

KIAMCO POWERLOAN TRUST 4TH

 

45,099

 

(1,172)

 

1,807

 

-

 

-

 

45,734

Mastern Opportunity Seeking Real Estate Fund II

 

13,135

 

(363)

 

(1,495)

 

-

 

-

 

11,277

Neoplux Market-Frontier Secondary Fund

 

10,427

 

(3,084)

 

2,000

 

-

 

-

 

9,343

Synergy Green New Deal 1st New Technology Business Investment Fund

 

10,315

 

(72)

 

416

 

-

 

-

 

10,659

 

 

89

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

June 30, 2024

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

KIAMCO Vietnam Solar Special Asset Private Investment Trust

W

6,836

 

(580)

 

471

 

-

 

-

 

6,727

SHINHAN-NEO Core Industrial Technology Fund

 

13,616

 

-

 

4,692

 

-

 

-

 

18,308

SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2

 

23,356

 

(1,326)

 

477

 

-

 

-

 

22,507

Eum Private Equity Fund No.7

 

9,166

 

-

 

46

 

-

 

-

 

9,212

Kiwoom Hero No.4 Private Equity Fund

 

3,442

 

(96)

 

(402)

 

-

 

-

 

2,944

Vogo Canister Professional Trust Private Fund I

 

45,871

 

(47,321)

 

1,450

 

-

 

-

 

-

Timefolio The Venture-V second

 

5,801

 

(4,444)

 

248

 

-

 

-

 

1,605

Shinhan Smilegate Global PEF I

 

3,801

 

-

 

721

 

-

 

-

 

4,522

Genesis Eco No.1 PEF

 

11,219

 

-

 

(94)

 

-

 

-

 

11,125

SHINHAN-NEO Market-Frontier 2nd Fund

 

32,670

 

(1,751)

 

1,504

 

-

 

-

 

32,423

NH-Synergy Core Industrial New Technology Fund

 

6,439

 

(6,176)

 

(264)

 

-

 

-

 

(1)

J& Moorim Jade Investment Fund

 

4,920

 

-

 

100

 

-

 

-

 

5,020

Ulmus SHC innovation investment fund

 

5,543

 

(1,150)

 

(237)

 

-

 

-

 

4,156

T Core Industrial Technology 1st Venture PEF

 

4,254

 

(378)

 

(747)

 

-

 

-

 

3,129

Fine Value POST IPO No.5 Private Equity Fund

 

3,766

 

(3,565)

 

(201)

 

-

 

-

 

-

TI First Property Private Investment Trust 1

 

3,102

 

(102)

 

101

 

-

 

-

 

3,101

IBKC Global Contents Investment Fund

 

4,701

 

(4,763)

 

63

 

-

 

-

 

1

Kiwoom-Shinhan Innovation Fund 2

 

9,165

 

2,571

 

(41)

 

-

 

-

 

11,695

ETRI Holdings-Shinhan 1st Unicorn Fund

 

3,295

 

1,500

 

(27)

 

-

 

-

 

4,768

SJ ESG Innovative Growth Fund

 

4,198

 

-

 

1

 

-

 

-

 

4,199

AVES 1st Corporate Recovery Private Equity Fund

 

4,768

 

-

 

(48)

 

-

 

-

 

4,720

Leverent-Shinhan Vista New Technology Investment Fund

 

2,600

 

27

 

665

 

-

 

-

 

3,292

JS Shinhan Private Equity Fund

 

4,933

 

-

 

2,858

 

-

 

-

 

7,791

Daishin Newgen New Technology Investment Fund 1st

 

6,082

 

-

 

(577)

 

-

 

-

 

5,505

META ESG Private Equity Fund I

 

5,771

 

-

 

(2)

 

-

 

-

 

5,769

 

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

June 30, 2024

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

Shinhan VC tomorrow venture fund 1

W

45,210

 

9,113

 

(157)

 

-

 

-

 

54,166

90

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

 

June 30, 2024

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

H-IOTA Fund

 

9,524

 

(604)

 

(240)

 

-

 

-

 

8,680

Stonebridge-Shinhan Unicorn Secondary Fund

 

7,427

 

3,080

 

(250)

 

-

 

-

 

10,257

Tres-Yujin Trust

 

10,359

 

-

 

1,555

 

-

 

-

 

11,914

Shinhan-Time mezzanine blind Fund

 

14,121

 

-

 

2,272

 

-

 

-

 

16,393

Capstone REITs No.26

 

5,750

 

-

 

(760)

 

-

 

-

 

4,990

JB Incheon-Bucheon REITS No.54

 

4,978

 

-

 

(6)

 

-

 

-

 

4,972

Hankook Smart Real Asset Investment Trust No.3

 

7,668

 

-

 

89

 

-

 

-

 

7,757

JB Hwaseong-Hadong REITs No.53

 

4,983

 

-

 

(4)

 

-

 

-

 

4,979

KB Oaktree Trust No.3

 

8,668

 

135

 

342

 

-

 

-

 

9,145

Daehan No.36 Office Asset Management Company

 

22,482

 

(25,364)

 

2,883

 

-

 

-

 

1

Rhinos Premier Mezzanine Private Investment Fund No.1

 

3,056

 

(1,161)

 

(2)

 

-

 

-

 

1,893

SH Real Estate Loan Investment Type Private Real Estate Investment Trust No.2

 

62,769

 

6,628

 

1,179

 

-

 

-

 

70,576

Shinhan JigaeNamsan Road Private Special Asset Investment Trust

 

41,434

 

(692)

 

818

 

-

 

-

 

41,560

SKS-Yozma Fund No.1

 

3,455

 

(1,080)

 

(610)

 

-

 

-

 

1,765

KB Distribution Private Real Estate 3-1

 

25,976

 

-

 

(665)

 

-

 

-

 

25,311

Pacific Private Investment Trust No.49-1

 

27,377

 

-

 

605

 

-

 

-

 

27,982

KIWOOM Real estate private placement fund for normal investors No. 31

 

8,558

 

(261)

 

263

 

-

 

-

 

8,560

RIFA Real estate private placement fund for normal investoes No. 51

 

5,731

 

(174)

 

174

 

-

 

-

 

5,731

Fivetree general private equity fund No.15

 

12,572

 

(12,572)

 

-

 

-

 

-

 

-

Shinhan-Kunicorn first Fund

 

9,626

 

-

 

(101)

 

-

 

-

 

9,525

Shinhan-Quantum Startup Fund

 

3,986

 

-

 

(64)

 

-

 

-

 

3,922

Shinhan Simone Fund Ⅰ

 

4,837

 

(769)

 

(425)

 

-

 

-

 

3,643

Korea Investment develop seed Trust No.1

 

9,532

 

(219)

 

623

 

-

 

-

 

9,936

Tiger Green alpha Trust No.29

 

28,573

 

(223)

 

934

 

-

 

-

 

29,284

STIC ALT Global II Private Equity Fund

 

9,504

 

(217)

 

275

 

-

 

-

 

9,562

NH-Brain EV Fund

 

11,125

 

-

 

657

 

-

 

-

 

11,782

DDI LVC Master Real Estate Investment Trust Co., Ltd.

 

6,583

 

-

 

(172)

 

-

 

-

 

6,411

Leverent-Frontier 4th Venture PEF

 

3,294

 

-

 

(389)

 

-

 

-

 

2,905

Find-Green New Deal 2nd Equity Fund

 

4,465

 

-

 

66

 

-

 

-

 

4,531

ShinhanFitrin 1st Technology Business Investment Association

 

4,519

 

-

 

(13)

 

-

 

-

 

4,506

Koramco Private Real Estate Fund 143

 

6,667

 

-

 

2

 

-

 

-

 

6,669

Korea Investment Top Mezzanine Private Real Estate Trust No.1

 

10,016

 

(448)

 

538

 

-

 

-

 

10,106

LB YoungNam Logistics Private Trust No.40

 

9,782

 

(300)

 

275

 

-

 

-

 

9,757

Shinhan-Cognitive Start-up Fund L.P.

 

5,329

 

-

 

175

 

-

 

-

 

5,504

 

 

91

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

June 30, 2024

Investees

Beginning

balance

Investment

and

dividend

Equity

method

income

(loss)

Change in

other comprehensive income

Impairment

loss

Ending

balance

Cornerstone J&M Fund I

W

3,488

 

-

 

(37)

 

-

 

-

 

3,451

Logisvalley Shinhan REIT Co.,Ltd.

 

3,598

 

-

 

(74)

 

-

 

-

 

3,524

DA Value-Honest New Technology Investment Fund 1

 

4,099

 

(1,078)

 

(657)

 

-

 

-

 

2,364

Shinhan-Ji and Tec Smart Innovation Fund

 

9,977

 

2,535

 

25

 

-

 

-

 

12,537

Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st

 

6,968

 

-

 

(106)

 

-

 

-

 

6,862

Korea Investment Green Newdeal Infra Trust No.1

 

10,257

 

-

 

(87)

 

-

 

-

 

10,170

BTS 2nd Private Equity Fund

 

6,342

 

3,796

 

1,331

 

-

 

-

 

11,469

Shinhan Global Active REIT Co.Ltd.

 

18,997

 

-

 

-

 

-

 

-

 

18,997

NH-J&-IBKC Label Technology Fund

 

9,747

 

-

 

(67)

 

-

 

-

 

9,680

Hanyang Time Mezzanine Fund

 

3,012

 

-

 

41

 

-

 

-

 

3,053

Shinhan-Sneak Peek Biohealthcare Bounceback Fund

 

2,261

 

1,250

 

(10)

 

-

 

-

 

3,501

Shinhan-isquare Venture PEF 1st

 

4,286

 

50

 

(17)

 

-

 

-

 

4,319

Capstone Develop Frontier Trust

 

7,547

 

(273)

 

538

 

-

 

-

 

7,812

Nextrade Co., Ltd.

 

9,700

 

-

 

-

 

-

 

-

 

9,700

SH 1.5years Maturity Investment Type Security Investment Trust No.2

 

4,835

 

(4,835)

 

-

 

-

 

-

 

-

Eventus-IBKC LIB Fund

 

6,632

 

-

 

113

 

-

 

-

 

6,745

IBKC-Behigh Fund 1st

 

3,219

 

-

 

(34)

 

-

 

-

 

3,185

ON No.1 Private Equity Fund

 

5,321

 

-

 

220

 

-

 

-

 

5,541

Digital New Deal Kappa Private Equity Fund

 

4,845

 

-

 

(49)

 

-

 

-

 

4,796

IBKCJS New Technology Fund No.1

 

6,130

 

(2,418)

 

(192)

 

-

 

-

 

3,520

DS-Shinhan-JBWoori New Media New Technology Investment Fund No.1

 

9,803

 

-

 

(158)

 

-

 

-

 

9,645

VOGO Debt Strategy General Private Real Estate Investment Trust No. 18

 

12,013

 

(619)

 

814

 

-

 

-

 

12,208

Koramco IPO LEITS Mezzanine General Private Investment Trust No. 38

 

3,171

 

(61)

 

136

 

-

 

-

 

3,246

TogetherKorea Private Investment Trust No. 6

 

5,270

 

-

 

78

 

-

 

-

 

5,348

TogetherKorea Private Investment Trust No. 7

 

5,270

 

-

 

78

 

-

 

-

 

5,348

Kiwoom Material Part Equipment New Technology Investment Fund No.3

 

4,180

 

-

 

(94)

 

-

 

-

 

4,086

Penture K-Content Investment Fund

 

5,622

 

6,000

 

1,060

 

-

 

-

 

12,682

2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund

 

7,969

 

3,563

 

(262)

 

-

 

-

 

11,270

Hana Alternative Investment Kosmes PCBO General PEF No. 1

 

5,107

 

(263)

 

295

 

-

 

-

 

5,139

Shinhan-timefolio Bio Development Investment Fund

 

5,927

 

-

 

(142)

 

-

 

-

 

5,785

Shinhan M&A-ESG Investment Fund

 

4,169

 

-

 

(134)

 

-

 

-

 

4,035

Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd.

 

10,574

 

(73)

 

(256)

 

-

 

-

 

10,245

 

 

92

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

June 30, 2024

Investees

Beginning

balance

Investment

and

dividend

Equity

method

income

(loss)

Change in

other comprehensive income

Impairment

loss

Ending

balance

KDBC meta-enter New Technology investment fund

W

6,940

 

-

 

(72)

 

-

 

-

 

6,868

Shinhan Time Secondary Blind New Technology Investment Trust

 

4,754

 

-

 

(46)

 

-

 

-

 

4,708

Shinhan DS Secondary Investment Fund

 

7,477

 

(3,129)

 

(2,663)

 

-

 

-

 

1,685

Shinhan-OpenWater Pre-IPO Fund-1

 

4,973

 

-

 

468

 

-

 

-

 

5,441

Shinhan-CJ Technology Innovation Fund No. 1

 

2,364

 

2,400

 

(87)

 

-

 

-

 

4,677

Shinhan-Eco Venture Fund 2nd

 

3,610

 

400

 

(51)

 

-

 

-

 

3,959

Heungkuk-Shinhan The First Visionary Fund No.1

 

3,154

 

1,600

 

(91)

 

-

 

-

 

4,663

Koreainvestment-Shinhan-LEP K beauty

 

9,969

 

-

 

463

 

-

 

-

 

10,432

Shinhan HB Wellness 1st Fund

 

4,992

 

-

 

345

 

-

 

-

 

5,337

Korea real Asset Fund No.3

 

9,315

 

4,184

 

(770)

 

-

 

-

 

12,729

Timefolio Tech New Technology Investment Trust No.1

 

2,993

 

-

 

9

 

-

 

-

 

3,002

Igis Yongsan Office General PE Real Estate Inv. Trust No. 518

 

23,131

 

(4,851)

 

(112)

 

-

 

-

 

18,168

K-REITs Infrastructure Real Estate Fund

 

2,764

 

278

 

-

 

-

 

-

 

3,042

Samsung-dunamu Innovative IT Technology Investment Trust No. 1

 

4,536

 

-

 

(344)

 

-

 

-

 

4,192

Time Robotics New Technology Investment Trust

 

3,966

 

(200)

 

42

 

-

 

-

 

3,808

Ascent-welcome Technology Investment Trust No.2

 

8,771

 

-

 

(196)

 

-

 

-

 

8,575

New Main Technology Investment Association No. 1

 

1,991

 

-

 

2,012

 

-

 

-

 

4,003

Igis General PE Real Estate Investment Trust 517-1

 

51,736

 

5,000

 

(363)

 

-

 

-

 

56,373

Consus Osansegyo No.2

 

8,104

 

-

 

(95)

 

-

 

-

 

8,009

Mastern General Private Real Estate Investment Trust No.189(Type 1 Beneficiary Securities)

 

7,822

 

(128)

 

(338)

 

-

 

-

 

7,356

Shinhan AIM Private Fund of Fund 9-B

 

24,018

 

1,097

 

993

 

-

 

-

 

26,108

Shinhan General Private Real Estate Investment Trust No.3

 

7,838

 

12,143

 

(370)

 

-

 

-

 

19,611

NH Absolute Project L General Private Investment Trust

 

4,893

 

(5,264)

 

371

 

-

 

-

 

-

Paros Kosdaq Venture General Private Investment Trust No. 5

 

5,994

 

-

 

(71)

 

-

 

-

 

5,923

Happy Pet Life Care New Technology Investment Association No.2

 

3,456

 

-

 

(423)

 

-

 

-

 

3,033

Shinhan-soo secondary Fund

 

5,249

 

5,250

 

(104)

 

-

 

-

 

10,395

Douzone Techfin Co.,Ltd.

 

-

 

27,000

 

(355)

 

-

 

-

 

26,645

Songpa Biz-Cluster PFV Co.,Ltd.

 

-

 

13,700

 

(121)

 

-

 

-

 

13,579

Planeta PTE LTD.

 

-

 

11,341

 

-

 

-

 

-

 

11,341


 

 

 

93

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

June 30, 2024

Investees

 

Beginning

balance

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

HDFC Credila Financial Services

 

-

 

250,270

 

-

 

-

 

-

 

250,270

Shinhan-DS Mezzanine New Technology Investment Association No. 1

 

-

 

4,000

 

(599)

 

-

 

-

 

3,401

KR Seocho Co., Ltd.

 

-

 

4,371

 

-

 

-

 

-

 

4,371

Shinhan Market-Frontier Investment Association No. 3

 

-

 

4,402

 

(95)

 

-

 

-

 

4,307

Others

 

195,256

 

(1,635)

 

2,702

 

(140)

 

-

 

196,183

Total

W

2,692,031

 

94,253

 

(14,958)

 

(50)

 

(11,162)

 

2,760,114

 

(*1) The Group has stopped recognizing its equity method income or loss due to the carrying value of ‘0’ resulting from the investees’ cumulative loss.

 

94

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

BNP Paribas Cardif Life Insurance

W

30,169

 

-

 

920

 

8,183

 

-

 

39,272

Partners 4th Growth Investment Fund

 

13,542

 

(13,542)

 

-

 

-

 

-

 

-

KTB Newlake Global Healthcare PEF

 

4,309

 

(3,954)

 

(355)

 

-

 

-

 

-

Shinhan-Neoplux Energy Newbiz Fund

 

20,837

 

-

 

1,521

 

-

 

-

 

22,358

Shinhan-Albatross tech investment Fund

 

12,253

 

(1,500)

 

4,618

 

128

 

-

 

15,499

KCGI-SingA330-A Private Special Asset Investment Trust

 

4,232

 

-

 

377

 

-

 

-

 

4,609

VOGO Debt Strategy Qualified IV Private

 

6,085

 

50

 

397

 

-

 

-

 

6,532

Shinhan-Midas Dong-A Secondary Fund

 

4,431

 

-

 

(130)

 

-

 

-

 

4,301

ShinHan – Soo Young Entrepreneur Investment Fund No.1

 

4,414

 

(864)

 

1,312

 

-

 

-

 

4,862

Shinhan Praxis K-Growth Global Private Equity Fund

 

3,691

 

-

 

1

 

-

 

-

 

3,692

Kiwoom Milestone Professional Private Real Estate Trust 19 (*1)

 

3,961

 

-

 

(136)

 

-

 

(3,825)

 

-

Shinhan Global Healthcare Fund 1 (*1)

 

-

 

-

 

-

 

-

 

-

 

-

KB NA Hickory Private Special Asset Fund

 

34,339

 

(11,436)

 

1,193

 

-

 

-

 

24,096

Koramco Europe Core Private Placement Real Estate Fund No.2-2

 

19,236

 

(919)

 

482

 

-

 

-

 

18,799

Hermes Private Investment Equity Fund

 

5,562

 

(5,562)

 

-

 

-

 

-

 

-

KDBC-Midas Dong-A Global contents Fund

 

4,277

 

-

 

11

 

-

 

-

 

4,288

Shinhan-Nvestor Liquidity Solution Fund

 

6,438

 

(265)

 

(85)

 

-

 

-

 

6,088

Shinhan AIM FoF Fund 1-A

 

10,110

 

(1,653)

 

1,178

 

-

 

-

 

9,635

IGIS Global Credit Fund 150-1

 

4,692

 

(803)

 

397

 

-

 

-

 

4,286

Partner One Value up I Private Equity Fund

 

5,144

 

(5,144)

 

-

 

-

 

-

 

-

Genesis No.1 Private Equity Fund

 

59,924

 

(59,916)

 

(8)

 

-

 

-

 

-

Korea Omega Project Fund III

 

3,674

 

-

 

22

 

-

 

-

 

3,696

Genesis North America Power Company No.1 PEF

 

8,118

 

(4,384)

 

2,624

 

-

 

-

 

6,358

SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3

 

43,244

 

(10,595)

 

8,115

 

-

 

-

 

40,764

KOREA FINANCE SECURITY CO., LTD.

 

2,411

 

-

 

(169)

 

1,003

 

-

 

3,245

MIEL CO.,LTD. (*1)

 

-

 

-

 

-

 

-

 

-

 

-

AIP Transportation Specialized Privately Placed Fund Trust #1

 

44,821

 

782

 

769

 

-

 

-

 

46,372

 

 

95

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

Kiwoom-Shinhan Innovation Fund I

W

9,441

 

(1,425)

 

(162)

 

-

 

-

 

7,854

Midas Asset Global CRE Debt Private Fund No.6

 

57,029

 

(8,663)

 

6,515

 

-

 

-

 

54,881

Samchully Midstream Private Placement Special Asset Fund 5-4

 

30,624

 

795

 

1,744

 

-

 

-

 

33,163

SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.3

 

24,492

 

(18,264)

 

1,026

 

-

 

-

 

7,254

NH-Amundi Global Infrastructure Trust 14

 

20,975

 

(3,086)

 

839

 

-

 

-

 

18,728

Jarvis Memorial Private Investment Trust 1

 

9,786

 

(10,642)

 

856

 

-

 

-

 

-

Vestas Qualified Investors Private Real Estate Fund Investment Trust No.37

 

33,357

 

(683)

 

2,591

 

-

 

-

 

35,265

Milestone Private Real Estate Fund 3

 

19,071

 

563

 

(2,019)

 

-

 

-

 

17,615

Rifa Private Real Estate Investment Trust 31

 

7,364

 

-

 

(475)

 

-

 

-

 

6,889

SH Senior Loan Professional Investment Type Private Mixed Asset Investment Trust No.2

 

2,969

 

(2,675)

 

2,844

 

-

 

-

 

3,138

T&F 2019 bearing Private Equity Fund Specializing in Start-up and Venture Business

 

3,231

 

(3,231)

 

-

 

-

 

-

 

-

FuturePlay-Shinhan TechInnovation Fund 1

 

6,916

 

-

 

931

 

-

 

-

 

7,847

Stonebridge Corporate 1st Fund

 

3,622

 

-

 

520

 

-

 

-

 

4,142

Vogo Realty Partners Private Real Estate Fund V

 

10,915

 

(378)

 

255

 

-

 

-

 

10,792

Korea Credit Bureau

 

5,039

 

(90)

 

1,789

 

-

 

-

 

6,738

Goduck Gangil1 PFV Co., Ltd.

 

60

 

-

 

120

 

-

 

-

 

180

SBC PFV Co., Ltd.

 

28,468

 

3,750

 

(1,444)

 

-

 

-

 

30,774

NH-amundi global infra private fund 16

 

56,211

 

(1,299)

 

(4,260)

 

-

 

-

 

50,652

IMM Global Private Equity Fund

 

147,384

 

(147,384)

 

-

 

-

 

-

 

-

SH BNCT Professional Investment Type Private Special Asset Investment Trust

 

263,052

 

(32,093)

 

13,813

 

-

 

-

 

244,772

DWS Global Professional Investment Type Private Real Estate Investment Trust No. 24

 

22,683

 

(5,882)

 

1,309

 

-

 

-

 

18,110

Sparklabs-Shinhan Opportunity Fund 1

 

4,631

 

(1,137)

 

420

 

-

 

-

 

3,914

BNW Tech-Innovation Private Equity Fund

 

5,833

 

(5,833)

 

-

 

-

 

-

 

-

IGIS Real-estate Private Investment Trust No.33

 

14,552

 

(360)

 

1,079

 

-

 

-

 

15,271

WWG Global Real Estate Investment Trust no.4

 

10,331

 

(10,795)

 

464

 

-

 

-

 

-

Goduck Gangil10 PFV Co., Ltd.

 

3,236

 

-

 

1,845

 

-

 

-

 

5,081

 

 

96

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

Fidelis Global Private Real Estate Trust No.2

W

21,945

 

-

 

(9,925)

 

-

 

(11,469)

 

551

AIP EURO PRIVATE REAL ESTATE TRUST No. 12

 

48,427

 

(5,864)

 

6,056

 

-

 

-

 

48,619

Shinhan Global Healthcare Fund 2 (*1)

 

-

 

-

 

-

 

-

 

-

 

-

Shinhan AIM Real Estate Fund No.2

 

25,243

 

-

 

1,435

 

-

 

-

 

26,678

Shinhan AIM Real Estate Fund No.1

 

44,642

 

6,586

 

645

 

-

 

-

 

51,873

SH Daegu Green Power Cogeneration System Professional Investment Type Private Special Asset Investment Trust

 

32,627

 

(916)

 

3,070

 

-

 

-

 

34,781

SH Sangju YC Expressway Professional Investment Type Private Special Asset Investment Trust

 

19,296

 

3

 

754

 

-

 

-

 

20,053

SH Global Infrastructure Professional Investment Type Private Special Asset Investment Trust No.7-2

 

24,598

 

(7,618)

 

536

 

-

 

-

 

17,516

Korea Omega-Shinhan Project Fund I

 

10,022

 

-

 

1,608

 

-

 

-

 

11,630

Samsung SRA Real Estate Professional Private 45

 

21,650

 

8,487

 

1,295

 

-

 

-

 

31,432

IBK Global New Renewable Energy Special Asset Professional Private2

 

33,412

 

(2,303)

 

1,187

 

-

 

-

 

32,296

VS Cornerstone Fund

 

3,335

 

-

 

(55)

 

-

 

-

 

3,280

Aone Mezzanine Opportunity Professional Private

 

5,009

 

(5,072)

 

63

 

-

 

-

 

-

NH-Amundi US Infrastructure Private Fund2

 

31,941

 

(4,395)

 

2,179

 

-

 

-

 

29,725

SH Japan Photovoltaic Private Special Asset Investment Trust No.2

 

6,332

 

(4,360)

 

341

 

-

 

-

 

2,313

Kakao-Shinhan 1st TNYT Fund

 

21,330

 

-

 

(1,464)

 

-

 

-

 

19,866

Pacific Private Placement Real Estate Fund No.40

 

11,622

 

(748)

 

750

 

-

 

-

 

11,624

Mastern Private Real Estate Loan Fund No.2

 

6,387

 

(3,679)

 

332

 

-

 

-

 

3,040

LB Scotland Amazon Fulfillment Center Fund 29

 

29,637

 

(1,753)

 

3,044

 

-

 

-

 

30,928

JR AMC Hungary Budapest Office Fund 16

 

12,457

 

(773)

 

1,003

 

-

 

-

 

12,687

EDNCENTRAL Co.,Ltd. (*1)

 

-

 

-

 

-

 

-

 

-

 

-

Future-Creation Neoplux Venture Capital Fund

 

4,251

 

(889)

 

(682)

 

-

 

-

 

2,680

Gyeonggi-Neoplux Superman Fund

 

5,467

 

-

 

(411)

 

-

 

-

 

5,056

NewWave 6th Fund

 

13,540

 

-

 

176

 

-

 

-

 

13,716

 

 

97

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

Neoplux No.3 Private Equity Fund

W

20,454

 

(4)

 

(1,469)

 

-

 

-

 

18,981

PCC Amberstone Private Equity Fund I

 

18,785

 

(2,425)

 

898

 

-

 

-

 

17,258

KIAMCO POWERLOAN TRUST 4TH

 

43,524

 

(2,306)

 

3,881

 

-

 

-

 

45,099

Mastern Opportunity Seeking Real Estate Fund II

 

14,710

 

(4,029)

 

2,454

 

-

 

-

 

13,135

AION ELFIS PROFESSIONAL PRIVATE 1

 

3,566

 

(3,376)

 

(190)

 

-

 

-

 

-

T&F 2020 SS Private Equity Fund Specializing in Start-up and Venture Business

 

5,709

 

(7,843)

 

2,134

 

-

 

-

 

-

Neoplux Market-Frontier Secondary Fund

 

13,960

 

(3,673)

 

140

 

-

 

-

 

10,427

Harvest Private Equity Fund II

 

3,139

 

(26)

 

(135)

 

-

 

-

 

2,978

Synergy Green New Deal 1st New Technology Business Investment Fund

 

10,632

 

(145)

 

(172)

 

-

 

-

 

10,315

KIAMCO Vietnam Solar Special Asset Private Investment Trust

 

6,727

 

(220)

 

329

 

-

 

-

 

6,836

SHINHAN-NEO Core Industrial Technology Fund

 

9,409

 

-

 

4,207

 

-

 

-

 

13,616

SHBNPP Green New Deal Energy Professional Investment Type Private Special Asset Investment Trust No.2

 

25,024

 

(2,542)

 

874

 

-

 

-

 

23,356

SIMONE Mezzanine Fund No.3

 

3,017

 

(1,965)

 

150

 

-

 

-

 

1,202

Eum Private Equity Fund No.7

 

9,170

 

-

 

(4)

 

-

 

-

 

9,166

Kiwoom Hero No.4 Private Equity Fund

 

3,517

 

-

 

(75)

 

-

 

-

 

3,442

Vogo Canister Professional Trust Private Fund I

 

46,329

 

(3,075)

 

2,617

 

-

 

-

 

45,871

SW-S Fund

 

7,248

 

(11,177)

 

3,929

 

-

 

-

 

-

CL Buyout 1st PEF

 

12,842

 

(20,216)

 

7,374

 

-

 

-

 

-

Timefolio The Venture-V second

 

4,096

 

-

 

1,705

 

-

 

-

 

5,801

 

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

Newlake Growth Capital Partners2 PEF

W

12,496

 

(12,496)

 

-

 

-

 

-

 

-

Shinhan Smilegate Global PEF I

 

3,771

 

-

 

30

 

-

 

-

 

3,801

Genesis Eco No.1 PEF

 

11,418

 

-

 

(199)

 

-

 

-

 

11,219

SHINHAN-NEO Market-Frontier 2nd Fund

 

34,420

 

4,270

 

(6,020)

 

-

 

-

 

32,670

NH-Synergy Core Industrial New Technology Fund

 

6,377

 

-

 

62

 

-

 

-

 

6,439

J& Moorim Jade Investment Fund

 

5,434

 

(787)

 

273

 

-

 

-

 

4,920

Helios-KDBC Digital Contents 1st

 

3,356

 

(1,457)

 

357

 

-

 

-

 

2,256

Ulmus SHC innovation investment fund

 

4,886

 

-

 

657

 

-

 

-

 

5,543

Mirae Asset Partners X Private Equity Fund

 

7,792

 

(7,792)

 

-

 

-

 

-

 

-

98

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

 

December 31, 2023

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

T Core Industrial Technology 1st Venture PEF

 

4,529

 

-

 

(275)

 

-

 

-

 

4,254

Curious Finale Corporate Recovery Private Equity Fund

 

3,591

 

(3,636)

 

45

 

-

 

-

 

-

Fine Value POST IPO No.5 Private Equity Fund

 

2,270

 

-

 

1,496

 

-

 

-

 

3,766

TI First Property Private Investment Trust 1

 

3,127

 

(203)

 

178

 

-

 

-

 

3,102

MPLUS Professional Private Real Estate Fund 25

 

4,231

 

-

 

(1,873)

 

-

 

-

 

2,358

IBKC Global Contents Investment Fund

 

4,552

 

-

 

149

 

-

 

-

 

4,701

Premier Luminous Private Equity Fund

 

8,966

 

(12,439)

 

3,473

 

-

 

-

 

-

Hanyang-Meritz 1 Fund

 

3,466

 

(689)

 

204

 

-

 

-

 

2,981

Kiwoom-Shinhan Innovation Fund 2

 

11,271

 

(4,434)

 

2,328

 

-

 

-

 

9,165

ETRI Holdings-Shinhan 1st Unicorn Fund

 

1,895

 

1,500

 

(100)

 

-

 

-

 

3,295

Maple Mobility Fund

 

16,859

 

(16,859)

 

-

 

-

 

-

 

-

SJ ESG Innovative Growth Fund

 

4,197

 

-

 

1

 

-

 

-

 

4,198

AVES 1st Corporate Recovery Private Equity Fund

 

5,057

 

-

 

(289)

 

-

 

-

 

4,768

JS Shinhan Private Equity Fund

 

4,953

 

-

 

(20)

 

-

 

-

 

4,933

NH Kyobo AI Solution Investment Fund

 

3,288

 

(4,138)

 

850

 

-

 

-

 

-

Daishin Newgen New Technology Investment Fund 1st

 

5,704

 

-

 

378

 

-

 

-

 

6,082

META ESG Private Equity Fund I

 

5,857

 

-

 

(86)

 

-

 

-

 

5,771

SWFV FUND-1

 

9,128

 

(9,433)

 

305

 

-

 

-

 

-

PHAROS DK FUND

 

3,835

 

(1,413)

 

40

 

-

 

-

 

2,462

 

 

99

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

Shinhan VC tomorrow venture fund 1

W

26,926

 

18,258

 

26

 

-

 

-

 

45,210

Highland 2021-8 Fund

 

4,826

 

(5,366)

 

540

 

-

 

-

 

-

H-IOTA Fund

 

9,623

 

(239)

 

140

 

-

 

-

 

9,524

Stonebridge-Shinhan Unicorn Secondary Fund

 

6,082

 

2,924

 

(1,579)

 

-

 

-

 

7,427

Tres-Yujin Trust

 

10,004

 

-

 

355

 

-

 

-

 

10,359

Shinhan-Time mezzanine blind Fund

 

13,312

 

-

 

809

 

-

 

-

 

14,121

Capstone REITs No.26

 

3,852

 

(300)

 

2,198

 

-

 

-

 

5,750

JB Incheon-Bucheon REITS No.54

 

4,989

 

-

 

(11)

 

-

 

-

 

4,978

Hankook Smart Real Asset Investment Trust No.3

 

6,993

 

-

 

675

 

-

 

-

 

7,668

JB Hwaseong-Hadong REITs No.53

 

4,991

 

-

 

(8)

 

-

 

-

 

4,983

KB Oaktree Trust No.3

 

8,605

 

(771)

 

834

 

-

 

-

 

8,668

Daehan No.36 Office Asset Management Company

 

22,058

 

-

 

424

 

-

 

-

 

22,482

Rhinos Premier Mezzanine Private Investment Fund No.1

 

2,873

 

-

 

183

 

-

 

-

 

3,056

SH Real Estate Loan Investment Type Private Real Estate Investment Trust No.2

 

57,334

 

3,369

 

2,066

 

-

 

-

 

62,769

Shinhan JigaeNamsan Road Private Special Asset Investment Trust

 

40,571

 

36

 

827

 

-

 

-

 

41,434

SKS-Yozma Fund No.1

 

6,599

 

(4,140)

 

996

 

-

 

-

 

3,455

IBKC-METIS Global Contents Investment Fund

 

4,550

 

(3,921)

 

(629)

 

-

 

-

 

-

Keistone Unicorn Private Equity Fund

 

6,249

 

(6,249)

 

-

 

-

 

-

 

-

KB Distribution Private Real Estate 3-1

 

26,651

 

-

 

(675)

 

-

 

-

 

25,976

Pacific Private Investment Trust No.49-1

 

28,641

 

-

 

(1,264)

 

-

 

-

 

27,377

KIWOOM Real estate private placement fund for normal investors No. 31

 

8,558

 

(518)

 

518

 

-

 

-

 

8,558

RIFA Real estate private placement fund for normal investoes No. 51

 

5,726

 

(340)

 

345

 

-

 

-

 

5,731

Fivetree general private equity fund No.15

 

12,281

 

(489)

 

780

 

-

 

-

 

12,572

Shinhan-Kunicorn first Fund

 

9,831

 

-

 

(205)

 

-

 

-

 

9,626

Harvest Fund No.3

 

15,854

 

(15,854)

 

-

 

-

 

-

 

-

Shinhan-Quantum Startup Fund

 

1,119

 

3,000

 

(133)

 

-

 

-

 

3,986

Shinhan Simone Fund Ⅰ

 

4,796

 

-

 

41

 

-

 

-

 

4,837

Korea Investment develop seed Trust No.1

 

10,242

 

(901)

 

191

 

-

 

-

 

9,532

Tiger Green alpha Trust No.29

 

26,806

 

(588)

 

2,355

 

-

 

-

 

28,573

STIC ALT Global II Private Equity Fund

 

9,859

 

(218)

 

(137)

 

-

 

-

 

9,504

NH-Brain EV Fund

 

11,592

 

-

 

(467)

 

-

 

-

 

11,125

DDI LVC Master Real Estate Investment Trust Co., Ltd.

 

6,405

 

450

 

(272)

 

-

 

-

 

6,583

Leverent-Frontier 4th Venture PEF

 

2,964

 

-

 

330

 

-

 

-

 

3,294

Find-Green New Deal 2nd Equity Fund

 

4,508

 

-

 

(43)

 

-

 

-

 

4,465

ShinhanFitrin 1st Technology Business Investment Association

 

4,437

 

-

 

82

 

-

 

-

 

4,519

PARATUS No.3 Private Equity Fund

 

4,936

 

(4,936)

 

-

 

-

 

-

 

-

 

 

100

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

Golden Route 2nd Startup Venture Specialized Private Equity Fund

W  

3,003

 

(3,003)

 

-

 

-

 

-

 

-

Koramco Private Real Estate Fund 143

 

3,030

 

3,636

 

1

 

-

 

-

 

6,667

Korea Investment Top Mezzanine Private Real Estate Trust No.1

 

9,885

 

(1,169)

 

1,300

 

-

 

-

 

10,016

LB YoungNam Logistics Private Trust No.40

 

9,748

 

(600)

 

634

 

-

 

-

 

9,782

Shinhan-Cognitive Start-up Fund L.P.

 

9,953

 

(5,052)

 

428

 

-

 

-

 

5,329

IGEN2022 No.1 private Equity Fund

 

9,045

 

(9,045)

 

-

 

-

 

-

 

-

Cornerstone J&M Fund I

 

3,561

 

-

 

(73)

 

-

 

-

 

3,488

Logisvalley Shinhan REIT Co.,Ltd.

 

3,804

 

-

 

(206)

 

-

 

-

 

3,598

DA Value-Honest New Technology Investment Fund 1

 

2,663

 

(1,145)

 

2,581

 

-

 

-

 

4,099

KDB Investment Global Healthcare Private Equity Fund I

 

34,468

 

(34,468)

 

-

 

-

 

-

 

-

Shinhan-Ji and Tec Smart Innovation Fund

 

2,587

 

7,800

 

(410)

 

-

 

-

 

9,977

Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st

 

1,776

 

5,400

 

(208)

 

-

 

-

 

6,968

Korea Investment Green Newdeal Infra Trust No.1

 

5,714

 

4,537

 

6

 

-

 

-

 

10,257

BTS 2nd Private Equity Fund

 

3,772

 

2,860

 

(290)

 

-

 

-

 

6,342

Shinhan Global Active REIT Co.Ltd.

 

19,222

 

(69)

 

(156)

 

-

 

-

 

18,997

NH-J&-IBKC Label Technology Fund

 

9,866

 

-

 

(119)

 

-

 

-

 

9,747

Hanyang Time Mezzanine Fund

 

3,000

 

-

 

12

 

-

 

-

 

3,012

IMM Global Venture Opportunity, LP

 

3,115

 

(3,115)

 

-

 

-

 

-

 

-

Shinhan-isquare Venture PEF 1st

 

497

 

4,000

 

(211)

 

-

 

-

 

4,286

Capstone Develop Frontier Trust

 

6,857

 

(565)

 

1,255

 

-

 

-

 

7,547

Nextrade Co., Ltd.

 

9,700

 

-

 

-

 

-

 

-

 

9,700

SH Sustainable Management ESG Short term Bond Security Feeder Investment Trust No.1 (*2)

 

3,011

 

(3,011)

 

-

 

-

 

-

 

-

SH 1.5years Maturity Investment Type Security Investment Trust No.2

 

4,601

 

-

 

234

 

-

 

-

 

4,835

Eventus-IBKC LIB Fund

 

6,035

 

-

 

597

 

-

 

-

 

6,632

NH-Daishin-Kyobo healthcare 1 Fund

 

3,948

 

(3,948)

 

-

 

-

 

-

 

-

IBKC-Behigh Fund 1st

 

3,268

 

-

 

(49)

 

-

 

-

 

3,219

Nautic Green Innovation ESG Co-investment No.1 Private Equity Fund

 

3,956

 

(3,956)

 

-

 

-

 

-

 

-

ON No.1 Private Equity Fund

 

5,362

 

-

 

(41)

 

-

 

-

 

5,321

Digital New Deal Kappa Private Equity Fund

 

4,946

 

-

 

(101)

 

-

 

-

 

4,845

IBKCJS New Technology Fund No.1

 

-

 

5,000

 

1,130

 

-

 

-

 

6,130

DS-Shinhan-JBWoori New Media New Technology Investment Fund No.1

 

-

 

10,000

 

(197)

 

-

 

-

 

9,803

VOGO Debt Strategy General Private Real Estate Investment Trust No. 18

 

-

 

11,014

 

999

 

-

 

-

 

12,013

Koramco IPO LEITS Mezzanine General Private Investment Trust No. 38

 

-

 

3,000

 

171

 

-

 

-

 

3,171

TogetherKorea Private Investment Trust No. 6

 

-

 

5,122

 

148

 

-

 

-

 

5,270

TogetherKorea Private Investment Trust No. 7

 

-

 

5,122

 

148

 

-

 

-

 

5,270

Kiwoom Material Part Equipment New Technology Investment Fund No.3

 

-

 

4,000

 

180

 

-

 

-

 

4,180

 

101

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

12. Investments in associates (continued)

 

(b) Changes in investments in associates for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows (continued):

 

 

December 31, 2023

Investees

 

Beginning

balance

 

 

Investment

and

dividend

 

Equity

method

income

(loss)

 

Change in

other comprehensive income

 

Impairment

loss

 

Ending

balance

Penture K-Content Investment Fund

W

-

 

6,000

 

(378)

 

-

 

-

 

5,622

2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund

 

-

 

7,838

 

131

 

-

 

-

 

7,969

Hana Alternative Investment Kosmes PCBO General PEF No. 1

 

-

 

4,740

 

367

 

-

 

-

 

5,107

Shinhan-timefolio Bio Development Investment Fund

 

-

 

6,000

 

(73)

 

-

 

-

 

5,927

Shinhan M&A-ESG Investment Fund

 

-

 

4,354

 

(185)

 

-

 

-

 

4,169

Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd.

 

-

 

9,565

 

1,009

 

-

 

-

 

10,574

KDBC meta-enter New Technology investment fund

 

-

 

7,000

 

(60)

 

-

 

-

 

6,940

Shinhan Time Secondary Blind New Technology Investment Trust

 

-

 

4,750

 

4

 

-

 

-

 

4,754

Shinhan DS Secondary Investment Fund

 

-

 

1,815

 

5,662

 

-

 

-

 

7,477

Shinhan-OpenWater Pre-IPO Fund-1

 

-

 

5,000

 

(27)

 

-

 

-

 

4,973

Shinhan-Eco Venture Fund 2nd

 

-

 

3,650

 

(40)

 

-

 

-

 

3,610

Heungkuk-Shinhan The First Visionary Fund No.1

 

-

 

3,200

 

(46)

 

-

 

-

 

3,154

Koreainvestment-Shinhan-LEP K beauty

 

-

 

10,000

 

(31)

 

-

 

-

 

9,969

Shinhan HB Wellness 1st Fund

 

-

 

5,000

 

(8)

 

-

 

-

 

4,992

Korea real Asset Fund No.3

 

-

 

9,370

 

(55)

 

-

 

-

 

9,315

Igis Yongsan Office General PE Real Estate Inv. Trust No. 518

 

-

 

23,900

 

(769)

 

-

 

-

 

23,131

Samsung-dunamu Innovative IT Technology Investment Trust No. 1

 

-

 

4,000

 

536

 

-

 

-

 

4,536

Time Robotics New Technology Investment Trust

 

-

 

4,000

 

(34)

 

-

 

-

 

3,966

Ascent-welcome Technology Investment Trust No.2

 

-

 

9,000

 

(229)

 

-

 

-

 

8,771

Igis General PE Real Estate Investment Trust 517-1

 

-

 

52,000

 

(264)

 

-

 

-

 

51,736

Consus Osansegyo No.2

 

-

 

8,000

 

104

 

-

 

-

 

8,104

Mastern General Private Real Estate Investment Trust No.189(Type 1 Beneficiary Securities)

 

-

 

8,500

 

(678)

 

-

 

-

 

7,822

Shinhan AIM Private Fund of Fund 9-B

 

-

 

23,036

 

982

 

-

 

-

 

24,018

Shinhan General Private Real Estate Investment Trust No.3

 

-

 

7,721

 

117

 

-

 

-

 

7,838

NH Absolute Project L General Private Investment Trust

 

-

 

4,488

 

405

 

-

 

-

 

4,893

Paros Kosdaq Venture General Private Investment Trust No. 5

 

-

 

6,000

 

(6)

 

-

 

-

 

5,994

Happy Pet Life Care New Technology Investment Association No.2

 

-

 

3,000

 

456

 

-

 

-

 

3,456

Shinhan-soo secondary Fund

 

-

 

5,250

 

(1)

 

-

 

-

 

5,249

Others

 

225,498

 

(39,576)

 

4,942

 

424

 

(289)

 

190,999

 

W

2,904,474

 

(331,686)

 

125,088

 

9,738

 

(15,583)

 

2,692,031

(*1) The Group has stopped recognizing its equity method income or loss due to the carrying amount of ‘0’ resulting from the investees’ cumulative loss.

(*2) For the year ended December 31, 2023 it is incorporated into the consolidation target as the Group held control due to increased equity ratio.

102

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

13. Financial liabilities at fair value through profit or loss

 

Financial liabilities at fair value through profit or loss as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Securities sold:

 

 

 

 

 Stocks

W

620,651

 

628,225

Bonds

 

791,876

 

477,626

 Others

 

373,530

 

343,783

 

 

1,786,057

 

1,449,634

Gold/silver deposits

 

479,270

 

419,343

 

W

2,265,327

 

1,868,977

 

 

14. Financial liabilities designated at fair value through profit or loss

 

(a) Financial liabilities designated at fair value through profit or loss as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

 

Reason for designation

Equity-linked securities sold

W

5,067,445

 

5,610,256

 

Combined financial instrument

Securities sold with embedded derivatives

 

2,316,102

 

1,931,639

 

Debt securities issued

 

254,501

 

254,832

 

Fair value measurement

and management

 

W

7,638,048

 

7,796,727

 

 

(*) The Group designated the financial liabilities at the initial recognition (or subsequently) in accordance with paragraph 6.7.1 of K-IFRS 1109 as financial liabilities at fair value through profit or loss.

 

Maximum credit risk exposure of the financial liabilities designated at fair value through profit or loss amounts to W 7,638,048 million as of June 30, 2024. Decrease in values of the liability due to credit risk changes is W 4,483 million for the six-month period ended June 30, 2024 and the accumulated changes in values are W 5,507 million as negative as of June 30, 2024.

 

 

(b) The difference between the carrying value of financial liabilities designated at fair value through profit or loss and the amount required to be paid at contractual maturity as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

 Expiration payment

W

7,420,563

 

7,519,962

 Carrying amount

 

7,638,048

 

7,796,727

 Difference from carrying amount

W

(217,485)

 

(276,765)

 

103

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

15. Debt securities issued

 

Debt securities issued as of June 30, 2024 and December 31, 2023 are as follows:

 

 

June 30, 2024

 

December 31, 2023

 

Interest
rate (%)

 

Amount

 

Interest
rate (%)

 

Amount

Debt securities issued in Korean won:

 

 

 

 

 

 

 

  Debt securities issued

0.00~8.50

W

66,673,586

 

0.00~7.70

W

65,801,744

  Subordinated debt securities issued

2.20~5.20

 

3,070,105

 

2.20~5.20

 

2,860,105

 Loss on fair value hedges

-

 

(241,181)

 

-

 

(225,750)

  Discount on debt securities issued

-

 

(78,690)

 

-

 

(53,857)

 

 

 

69,423,820

 

 

 

68,382,242

Debt securities issued in foreign

 currencies:

 

 

 

 

 

 

 

  Debt securities issued

0.25~7.28

 

12,457,238

 

0.25~7.36

 

9,697,265

Subordinated debt securities issued

3.34~5.75

 

4,745,340

 

3.34~5.00

 

3,768,942

 Loss on fair value hedges

 

 

(313,614)

 

-

 

(240,483)

  Discount on debt securities issued

 

 

(63,437)

 

-

 

(46,241)

 

 

 

16,825,527

 

 

 

13,179,483

 

 

W

86,249,347

 

 

W

81,561,725

 

 

 

104

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

16. Defined benefits assets and liablilities

The Group has operated a defined benefit plan and calculates defined benefit obligations based on the employee’s pension compensation benefits and service period.

 

(a) Defined benefit obligations and plan assets as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Present value of defined benefit obligations

W

2,167,829

 

2,219,490

Fair value of plan assets

 

(2,251,714)

 

(2,266,248)

Recognized liability (asset) for defined benefit obligations (*)

W

(83,885)

 

(46,758)

(*) The asset for defined benefit obligation of W83,885 million as of June 30, 2024 is the net defined benefit assets of W176,112 million less the net defined liabilities of W92,227 million. In addition, the asset for defined benefit obligation of W46,758 million as of December 31, 2023 is the net defined benefit assets of W114,378 million less the net defined liabilities of W67,620 million.

 

(b) Net income relating to defined benefit liabilities for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-month

Six-

month

 

Three-

month

Six-

month

Current service cost

W

40,620

82,169

 

35,817

72,138

Net interest expense (income)

 

(6,932)

(7,482)

 

(8,652)

(17,454)

Past service cost

 

265

265

 

92

92

Settlement

 

(118)

(1,987)

 

5,557

5,397

 

W

33,835

72,965

 

32,814

60,173

 

 

105

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

17. Provisions

 

(a) Provisions as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Asset retirement obligations

W

101,423

 

99,927

Expected loss related to litigation

 

27,106

 

31,371

Unused credit commitments

 

468,976

 

355,591

Guarantee contracts issued:

 

76,842

 

63,161

 Financial guarantee contracts issued:

 

57,518

 

39,998

 Non-financial guarantee contracts issued:

 

19,324

 

23,163

Others(*1), (*2), (*3)

 

695,514

 

819,616

 

W

1,369,861

 

1,369,666

(*1) As of June 30, 2024 and December 31, 2023, the Group recognizes a provision of W 314,795 million and W 360,137 million, respectively, an estimated amount which is highly probable to be paid for customer losses expected due to delays in redemption of Lime CI funds, etc.

(*2) As of June 30, 2024 and December 31, 2023, the Group recognizes a provision of W 52,828 million and W 293,824 million for vulnerable groups such as self-employed people, small business owners and institutions supporting vulnerable groups, etc. in accordance with the “Banking financial support plan for people’s livelihood.”

(*3) As of June 30, 2024, the Group recognizes a provision of W 161,055 million for an estimated customer compensation amount related to stock-linked products based on the Hang Seng China Enterprises Index (HSCEI)

106

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

17. Provisions (continued)

 

(b) Changes in provision for unused credit commitments and financial guarantee contracts issued for the six-month period ended June 30, 2024 and the year ended December 31, 2023 are as follows:

 

 

 

 

June 30, 2024

 

 

 

 

 

Unused credit commitments

 

Financial guaranteed contracts issued

 

Total

 

 

12 months expected
credit loss

 

Life-time expected
credit loss

 

Impaired

financial asset

 

12 months expected credit loss

 

Life-time expected
credit loss

 

Impaired financial asset

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

W

206,687

 

129,182

 

19,722

 

32,002

 

7,590

 

406

 

395,589

Transfer (from)to 12 months expected credit loss

 

51,671

 

(51,582)

 

(89)

 

5,349

 

(5,349)

 

-

 

-

Transfer (from)to life-time expected credit loss

 

(14,883)

 

15,115

 

(232)

 

(2,582)

 

2,582

 

-

 

-

Transfer (from)to impaired financial asset

 

(563)

 

(1,222)

 

1,785

 

-

 

-

 

-

 

-

Provided (reversed)

 

(32,473)

 

35,186

 

108,311

 

(1,558)

 

(742)

 

7

 

108,731

Change in foreign exchange rate

 

1,731

 

630

 

-

 

1,112

 

421

 

-

 

3,894

OtOthers(*)

 

(106)

 

106

 

-

 

17,190

 

1,487

 

(397)

 

18,280

Ending balance

W

212,064

 

127,415

 

129,497

 

51,513

 

5,989

 

16

 

526,494

 

 

107

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

17. Provisions (continued)

 

(b) Changes in provision for unused credit commitments and financial guarantee contracts issued for the six-month period ended June 30, 2024 and the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

 

 

 

 

 

Unused credit commitments

 

Financial guaranteed contracts issued

 

Total

 

 

12 months expected
credit loss

 

Life-time expected
credit loss

 

Impaired

financial asset

 

12 months expected credit loss

 

Life-time expected
credit loss

 

Impaired financial asset

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

W

175,562

 

139,998

 

2,030

 

48,113

 

7,687

 

28

 

373,418

Transfer (from)to 12 months expected credit loss

 

65,058

 

(64,897)

 

(161)

 

3,921

 

(3,921)

 

-

 

-

Transfer (from)to life-time expected credit loss

 

(13,466)

 

13,502

 

(36)

 

(7,659)

 

7,659

 

-

 

-

Transfer (from)to impaired financial asset

 

(609)

 

(1,953)

 

2,562

 

(530)

 

-

 

530

 

-

Provided (reversed)

 

(20,883)

 

42,506

 

15,327

 

150

 

70

 

(14)

 

37,156

Change in foreign exchange rate

 

1,025

 

26

 

-

 

294

 

92

 

1

 

1,438

OtOthers(*)

 

-

 

-

 

-

 

(12,287)

 

(3,997)

 

(139)

 

(16,423)

Ending balance

W

206,687

 

129,182

 

19,722

 

32,002

 

7,590

 

406

 

395,589

(*) Others include effects of the provision from the new financial guaranteed contracts measured at fair value, and the expired contracts, the change of discount rate and others.

108

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

18. Insurance contracts liabilities and others

 

(a) Insurance contract liabilities as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Insurance contract assets

W

866

 

10,654

Insurance contract liabilities

 

49,667,364

 

48,333,208

   Net insurance contract liabilities

W

49,666,498

 

48,322,554

Reinsurance contract assets

W

113,438

 

88,353

Reinsurance contract liabilities

 

116,490

 

93,240

   Net reinsurance contract liabilities

W

3,052

 

4,887

 

 

109

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

18. Insurance contracts liabilities and others (continued)

 

(b) Income or expenses on insurance for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

 

Six-month

 

 

Modified retrospective approach

 

Fair value approach

 

Others

 

Total

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Expected premium and other income

W

386,105

 

348,702

 

84,123

 

818,930

  Adjustment for change in risk

 

24,824

 

18,070

 

21,402

 

64,296

  Amortization of contractual service margin

 

233,918

 

125,624

 

113,206

 

472,748

  Collection of insurance acquisition cash flows

 

61,541

 

208

 

104,626

 

166,375

  Others(*)

 

(7,722)

 

39

 

3,098

 

(4,585)

Sub-total

 

698,666

 

492,643

 

326,455

 

1,517,764

Premium allocation approach

 

26,039

 

-

 

121

 

26,160

Total of insurance revenue

 

724,705

 

492,643

 

326,576

 

1,543,924

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

Incurred premium and other expenses

 

371,820

 

253,566

 

72,942

 

698,328

  Changes in fulfillment cash flows

 

10,565

 

83,739

 

10,126

 

104,430

  Onerous contracts expense (reversal)

 

385

 

4,902

 

(1,115)

 

4,172

  Amortization of insurance acquisition cash flows

 

61,618

 

208

 

104,548

 

166,374

  Others(*)

 

(6,614)

 

426

 

(33,324)

 

(39,512)

Sub-total

 

437,774

 

342,841

 

153,177

 

933,792

Premium allocation approach

 

34,236

 

-

 

(566)

 

33,670

Total of insurance service expense

 

472,010

 

342,841

 

152,611

 

967,462

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Incurred premium for reinsurance

 

14

 

30,250

 

3,892

 

34,156

  Changes in fulfillment cash flows

 

45

 

(11,060)

 

(327)

 

(11,342)

  Others (*)

 

7

 

(5,043)

 

(3,173)

 

(8,209)

Sub-total

 

66

 

14,147

 

392

 

14,605

Premium allocation approach

 

8,354

 

-

 

-

 

8,354

Sub-total of reinsurance revenue

 

8,420

 

14,147

 

392

 

22,959

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Expected reinsurance premium

 

-

 

19,959

 

5,644

 

25,603

Adjustment for change in risk

 

-

 

1,428

 

416

 

1,844

Amortized contractual service margin

 

-

 

2,742

 

4,916

 

7,658

Others(*)

 

-

 

(2,779)

 

(369)

 

(3,148)

Sub-total

 

-

 

21,350

 

10,607

 

31,957

Premium allocation approach

 

6,749

 

-

 

-

 

6,749

Net insurance service expense

 

6,749

 

21,350

 

10,607

 

38,706

Net of insurance income (expense)

W

254,366

 

142,599

 

163,750

 

560,715

(*) Others include allocation of loss components, etc.

.

 

110

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

18. Insurance contracts liabilities (continued)

 

(b) Income or expenses on insurance for the six-month periods ended June 30, 2024 and 2023 are as follows(continued):

 

 

 

June 30, 2024

 

 

Three-month

 

 

Modified retrospective approach

 

Fair value approach

 

Others

 

Total

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Expected premium and other income

W

192,515

 

173,672

 

45,562

 

411,749

  Adjustment for change in risk

 

12,117

 

8,875

 

10,640

 

31,632

  Amortization of contractual service margin

 

114,046

 

60,342

 

60,371

 

234,759

  Collection of insurance acquisition cash flows

 

31,462

 

108

 

56,858

 

88,428

  Others(*)

 

(3,277)

 

(14)

 

2,346

 

(945)

Sub-total

 

346,863

 

242,983

 

175,777

 

765,623

Premium allocation approach

 

12,888

 

-

 

70

 

12,958

Total of insurance revenue

 

359,751

 

242,983

 

175,847

 

778,581

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

Incurred premium and other expenses

 

187,958

 

161,809

 

43,336

 

393,103

  Changes in fulfillment cash flows

 

(2,453)

 

(6,292)

 

679

 

(8,066)

  Onerous contracts expense

 

7,010

 

8,262

 

(12,962)

 

2,310

  Amortization of insurance acquisition cash flows

 

31,503

 

108

 

56,816

 

88,427

  Others(*)

 

(2,772)

 

214

 

(625)

 

(3,183)

Sub-total

 

221,246

 

164,101

 

87,244

 

472,591

Premium allocation approach

 

19,527

 

-

 

(603)

 

18,924

Total of insurance service expense

 

240,773

 

164,101

 

86,641

 

491,515

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Incurred premium for reinsurance

 

11

 

16,337

 

2,190

 

18,538

  Changes in fulfillment cash flows

 

13

 

(7,102)

 

(298)

 

(7,387)

  Others (*)

 

6

 

(4,600)

 

(3,165)

 

(7,759)

Sub-total

 

30

 

4,635

 

(1,273)

 

3,392

Premium allocation approach

 

4,756

 

-

 

-

 

4,756

Sub-total of reinsurance revenue

 

4,786

 

4,635

 

(1,273)

 

8,148

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Expected reinsurance premium

 

-

 

9,907

 

2,910

 

12,817

Adjustment for change in risk

 

-

 

705

 

211

 

916

Amortized contractual service margin

 

-

 

1,929

 

2,896

 

4,825

Others(*)

 

-

 

(71)

 

266

 

195

Sub-total

 

-

 

12,470

 

6,283

 

18,753

Premium allocation approach

 

3,155

 

-

 

-

 

3,155

Net insurance service expense

 

3,155

 

12,470

 

6,283

 

21,908

Net of insurance income (expense)

W

120,609

 

71,047

 

81,650

 

273,306

(*) Others include allocation of loss components, etc.

 

 

111

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

18. Insurance contracts liabilities (continued)

 

(b) Income or expenses on insurance for the six-month periods ended June 30, 2024 and 2023 are as follows(continued):

 

 

 

June 30, 2023

 

 

Six-month

 

 

Modified retrospective approach

 

Fair value approach

 

Others

 

Total

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Expected premium and other income

W

409,252

 

336,668

 

35,280

 

781,200

  Adjustment for change in risk

 

29,585

 

17,596

 

10,576

 

57,757

  Amortization of contractual service margin

 

286,634

 

97,376

 

62,020

 

446,030

  Collection of insurance acquisition cash flows

 

68,642

 

21

 

54,418

 

123,081

  Others(*)

 

(9,591)

 

58

 

826

 

(8,707)

Sub-total

 

784,522

 

451,719

 

163,120

 

1,399,361

Premium allocation approach

 

13,372

 

-

 

193

 

13,565

Total of insurance revenue

 

797,894

 

451,719

 

163,313

 

1,412,926

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

Incurred premium and other expenses

 

406,399

 

236,641

 

31,797

 

674,837

  Changes in fulfillment cash flows

 

8,552

 

74,235

 

2,852

 

85,639

  Onerous contracts expense

 

13,138

 

7,556

 

6,425

 

27,119

  Amortization of insurance acquisition cash flows

 

68,642

 

21

 

54,418

 

123,081

  Others(*)

 

(6,347)

 

895

 

(17,977)

 

(23,429)

Sub-total

 

490,384

 

319,348

 

77,515

 

887,247

Premium allocation approach

 

13,653

 

-

 

112

 

13,765

Total of insurance service expense

 

504,037

 

319,348

 

77,627

 

901,012

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Incurred premium for reinsurance

 

-

 

33,848

 

1,975

 

35,823

  Changes in fulfillment cash flows

 

-

 

(12,621)

 

(174)

 

(12,795)

  Others(*)

 

-

 

(1,691)

 

1,376

 

(315)

Sub-total

 

-

 

19,536

 

3,177

 

22,713

Premium allocation approach

 

543

 

-

 

-

 

543

Sub-total of reinsurance revenue

 

543

 

19,536

 

3,177

 

23,256

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Expected reinsurance premium

 

-

 

21,427

 

2,710

 

24,137

Adjustment for change in risk

 

-

 

1,691

 

247

 

1,938

Amortized contractual service margin

 

-

 

5,250

 

3,224

 

8,474

Others(*)

 

-

 

(1,017)

 

1,804

 

787

Sub-total

 

-

 

27,351

 

7,985

 

35,336

Premium allocation approach

 

2,258

 

-

 

-

 

2,258

Net insurance service expense

 

2,258

 

27,351

 

7,985

 

37,594

Net of insurance income (expense)

W

292,142

 

124,556

 

80,878

 

497,576

(*) Others include allocation of loss components, etc.

 

112

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

18. Insurance contracts liabilities (continued)

 

(b) Income or expenses on insurance for the six-month periods ended June 30, 2024 and 2023 are as follows(continued):

 

 

 

June 30, 2023

 

 

Three-month

 

 

Modified retrospective approach

 

Fair value approach

 

Others

 

Total

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Expected premium and other income

W

203,547

 

167,529

 

20,065

 

391,141

  Adjustment for change in risk

 

14,589

 

8,535

 

5,787

 

28,911

  Amortization of contractual service margin

 

144,616

 

41,807

 

34,954

 

221,377

  Collection of insurance acquisition cash flows

 

46,389

 

28

 

37,789

 

84,206

  Others(*)

 

(4,829)

 

39

 

(2,380)

 

(7,170)

Sub-total

 

404,312

 

217,938

 

96,215

 

718,465

Premium allocation approach

 

8,650

 

-

 

146

 

8,796

Total of insurance revenue

 

412,962

 

217,938

 

96,361

 

727,261

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

Incurred premium and other expenses

 

206,337

 

154,779

 

14,091

 

375,207

  Changes in fulfillment cash flows

 

(2,719)

 

(8,794)

 

292

 

(11,221)

  Onerous contracts expense

 

9,787

 

1,251

 

2,632

 

13,670

  Amortization of insurance acquisition cash flows

 

46,145

 

272

 

37,790

 

84,207

  Others(*)

 

(3,250)

 

539

 

(9,547)

 

(12,258)

Sub-total

 

256,300

 

148,047

 

45,258

 

449,605

Premium allocation approach

 

8,107

 

-

 

(35)

 

8,072

Total of insurance service expense

 

264,407

 

148,047

 

45,223

 

457,677

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Incurred premium for reinsurance

 

(334)

 

16,567

 

1,713

 

17,946

  Changes in fulfillment cash flows

 

420

 

(8,084)

 

(342)

 

(8,006)

  Others(*)

 

5

 

(240)

 

(54)

 

(289)

Sub-total

 

91

 

8,243

 

1,317

 

9,651

Premium allocation approach

 

543

 

-

 

-

 

543

Sub-total of reinsurance revenue

 

634

 

8,243

 

1,317

 

10,194

Insurance contracts with no premium allocation approach

 

 

 

 

 

 

 

 

  Expected reinsurance premium

 

-

 

10,354

 

1,735

 

12,089

Adjustment for change in risk

 

-

 

829

 

156

 

985

Amortized contractual service margin

 

-

 

2,251

 

1,794

 

4,045

Others(*)

 

-

 

(173)

 

753

 

580

Sub-total

 

-

 

13,261

 

4,438

 

17,699

Premium allocation approach

 

1,311

 

-

 

-

 

1,311

Net insurance service expense

 

1,311

 

13,261

 

4,438

 

19,010

Net of insurance income (expense)

W

147,878

 

64,873

 

48,017

 

260,768

(*) Others include allocation of loss components, etc.

 

113

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

19. Insurance finance income and expense

 

Insurance finance income or expense for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-month

Six-

month

 

Three-month

Six-

month

Insurance finance income

 

 

 

 

 

 

  Insurance contract

 

 

 

 

 

 

   Foreign exchange rate change effects

W

112

312

 

1,960

2,081

   Other

 

4,844

16,464

 

11,290

24,431

 

4,956

16,776

 

13,250

26,512

  Reinsurance contract

 

 

 

 

 

 

   Discount rate change effects

 

-

-

 

(3)

6

   The change in non-performance risk by reinsurer

 

(23)

(26)

 

-

-

 

 

(23)

(26)

 

(3)

6

 

4,933

16,750

 

13,247

26,518

Insurance finance expense

 

 

 

 

 

 

  Insurance contract

 

 

 

 

 

 

   Foreign exchange rate change effects

 

8,517

20,307

 

4,952

12,710

   Discount rate change effects

 

-

-

 

(5)

12

   Other

 

130,160

256,234

 

70,274

352,122

 

138,677

276,541

 

75,221

364,844

Insurance finance income (expense)

W

(133,744)

(259,791)

 

(61,974)

(338,326)

 

 

 

114

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

20. Equity

 

(a) Equity as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Capital stock(*):

 

 

 

 

Common stock

W

2,695,586

 

2,695,586

Preferred stock

 

274,055

 

274,055

 

 

2,969,641

 

2,969,641

 

 

 

 

 

Hybrid bond

 

4,201,088

 

4,001,731

 

 

 

 

 

Capital surplus:

 

 

 

 

Share premium

 

11,352,744

 

11,352,744

Others

 

742,224

 

742,224

 

 

12,094,968

 

12,094,968

 

 

 

 

 

Capital adjustments

 

(706,879)

 

(658,664)

 

 

 

 

 

Accumulated other comprehensive income, net of tax:

 

 

 

 

Loss on financial assets at fair value through other comprehensive income

 

(3,535,677)

 

(3,503,542)

Equity in other comprehensive loss of associates

 

(1,007)

 

(970)

Foreign currency translation adjustments for foreign operations

 

(5,440)

 

(118,517)

Net loss from cash flow hedges

 

(56,621)

 

(35,108)

Remeasurement of defined benefit obligation

 

(231,448)

 

(292,328)

Changes in own credit risk on financial liabilities designated under fair value option

 

(4,053)

 

(3,884)

Net finance gain on insurance contract assets(liabilities)

 

1,854,406

 

2,866,623

Net finance gain on reinsurance contract assets(liabilities)

 

12,778

 

13,273

 

 

(1,967,062)

 

(1,074,453)

 

 

 

 

 

Retained earnings

 

38,245,507

 

36,387,314

 

 

 

 

 

Non-controlling interest

 

2,765,017

 

2,601,328

 

W

57,602,280

 

56,321,865

(*) Due to the retirement of earned surplus reserve, the capital is different from the total face value of the issued stock.

 

 

 

 

115

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

20. Equity (continued)

 

(b) Hybrid bonds

 

Hybrid bonds classified as other equity instruments of June 30, 2024 and December 31, 2023 are as follows:

 

 

Issue date

 

Maturity date

 

Interest rate (%)

 

June 30,

2024

 

December 31,

2023

Hybrid bonds in Korean won

June 25, 2015

 

June 25, 2045

 

4.38

W

199,455

 

199,455

September 15, 2017

 

Perpetual bond

 

4.25

 

89,783

 

89,783

April 13, 2018

 

Perpetual bond

 

4.56

 

14,955

 

14,955

June 28, 2019

 

Perpetual bond

 

3.27

 

  -

 

199,476

September 17, 2020

 

Perpetual bond

 

3.12

 

448,699

 

448,699

March 16, 2021

 

Perpetual bond

 

2.94

 

429,009

 

429,009

March 16, 2021

 

Perpetual bond

 

3.30

 

169,581

 

169,581

January 25, 2022

 

Perpetual bond

 

3.90

 

560,438

 

560,438

January 25, 2022

 

Perpetual bond

 

4.00

 

37,853

 

37,853

August 26, 2022

 

Perpetual bond

 

4.93

 

343,026

 

343,026

August 26, 2022

 

Perpetual bond

 

5.15

 

55,803

 

55,803

January 30, 2023

 

Perpetual bond

 

5.14

 

398,831

 

398,831

July 13, 2023

 

Perpetual bond

 

5.40

 

498,815

 

498,815

January 31, 2024

 

Perpetual bond

 

4.49

 

398,833

 

-

Hybrid bonds in foreign currency

May 12, 2021

 

Perpetual bond

 

2.88

 

556,007

 

556,007

 

 

 

 

 

 

W

4,201,088

 

4,001,731

(*) For the six-month period ended June 30, 2024, the deduction for capital related to hybrid bonds issued is W1,167 million.

 

The hybrid bonds above can be repaid early after 5 or 10 years from the date of issuance, and the controlling company has an unconditional right to extend the maturity under the same condition or change them to perpetual bonds.

 

 

116

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

20. Equity (continued)

 

(c) Treasury stock

 

Changes in treasury stock for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

 

 

The number of shares

 

Carrying value

 

The number of shares

 

Carrying value

Beginning balance

 

6,352

W

227

 

6,352

W

227

Acquisition

 

6,541,412

 

300,050

 

13,507,398

 

485,947

Disposal

 

(6,353)

 

(227)

 

-

 

-

Retirement(*)

 

(3,366,257)

 

(150,000)

 

(13,507,398)

 

(485,947)

Ending balance

 

3,175,154

W

150,050

 

6,352

W

227

(*) For the year ended June 30, 2024, the Group acquired treasury stocks for retirement, and the retirement of 3,366,257 shares was completed on March 22, 2024. For the year ended December 31, 2023, the Group acquired treasury stocks for retirement, and the retirement of 3,676,470 shares, 4,243,281 shares, 2,842,929 shares and 2,744,718 shares was completed on March 28, 2023, June 16, 2023, August 31, 2023 and December 27, 2023, respectively.

 

117

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

20. Equity (continued)

 

(d) Accumulated other comprehensive income

 

Changes in accumulated other comprehensive income for the six-month period ended June 30, 2024 and the year ended December 31, 2023 are as follows:

June 30, 2024

Items that are or may be reclassified to profit or loss

Items that will never be reclassified to profit or loss

Total

Gain (loss) on securities at fair value through other comprehensive income

 

Equity in other comprehensive income (loss) of

associates

 

Foreign currency translation

adjustments

for foreign

operations

 

Net gain(loss) from cash flow hedges

 

Net finance gain on insurance contract assets

(liabilities)

 

Net finance

gain on

reinsurance

 contract assets

(liabilities)

 

Remeasure

-ments of

the defined benefit

plans

 

Equity in other comprehensive income (expense) of

associates

 

Gain (loss) on securities at

fair value

through other

comprehensive income

 

Gain (loss) on financial

Liabilities

measured at

FVTPL
attributable to
changes in
credit risk

 

Beginning balance

W

(3,628,434)

 

(979)

 

(118,517)

 

(35,108)

 

2,866,623

 

13,273

 

(292,328)

 

9

 

124,892

 

(3,884)

 

(1,074,453)

Change due to fair value

(95,590)

 

(46)

 

-

 

-

 

(1,375,288)

 

(679)

 

-

 

-

 

62,558

 

(4,483)

 

(1,413,528)

Reclassification:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change due to impairment or disposal

439

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

439

Effect of hedge accounting

-

 

-

 

-

 

(269,983)

 

-

 

-

 

-

 

-

 

-

 

-

 

(269,983)

Hedging

(18,959)

 

-

 

(96,973)

 

250,519

 

-

 

-

 

-

 

-

 

-

 

-

 

134,587

Effects from changes in foreign exchange rate

-

 

(4)

 

208,421

 

-

 

-

 

-

 

-

 

-

 

6,870

 

-

 

215,287

Remeasurements of the net defined benefit plans

-

 

-

 

-

 

-

 

-

 

-

 

83,206

 

-

 

-

 

-

 

83,206

Deferred income taxes

28,472

 

13

 

1,795

 

(2,049)

 

363,071

 

184

 

(22,143)

 

-

 

(19,262)

 

61

 

350,142

Transfer to other account

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

3,388

 

4,253

 

7,641

Non-controlling interests

(51)

 

-

 

(166)

 

-

 

-

 

-

 

(183)

 

-

 

-

 

-

 

(400)

118

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

Ending balance

W

(3,714,123)

 

(1,016)

 

(5,440)

 

(56,621)

 

1,854,406

 

12,778

 

(231,448)

 

9

 

178,446

 

(4,053)

 

(1,967,062)

 

 

119

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

20. Equity (continued)

 

(d) Accumulated other comprehensive income (continued)

 

Changes in accumulated other comprehensive income for the six-month period ended June 30, 2024 and the year ended December 31, 2023 are as follows (continued):

 

 

 

December 31, 2023

 

 

Items that are or may be reclassified to profit or loss

 

Items that will never be reclassified to profit or loss

 

Total

 

 

Gain (loss) on securities at fair value through other comprehensive income

 

Equity in other comprehensive income (expense) of

associates

 

Foreign currency translation

adjustments

for foreign

operations

 

Net gain (loss)

from cash

flow

hedges

 

Net finance

Income (expense) on insurance contract

assets

(liabilities)

 

Net finance

Income (expense) on reinsurance contract assets

(liabilities)

 

Remeasure

-ments of

the defined benefit

plans

 

Equity in other comprehensive income (expense) of

associates

 

Gain (loss) on securities at

fair value

through other

comprehensive income

 

Gain (loss) on

financial

Liabilities

measured at

FVTPL
attributable to
changes in
credit risk

 

Beginning balance

W

(6,786,650)

 

(8,135)

 

(112,283)

 

(96,388)

 

5,039,081

 

34,045

 

(91,993)

 

9

 

116,719

 

(5,155)

 

(1,910,750)

Change due to fair value

 

3,862,277

 

9,738

 

-

 

-

 

(2,961,019)

 

(28,283)

 

-

 

-

 

1,459

 

4,011

 

888,183

Reclassification:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change due to impairment or disposal

 

465,343

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

4,199

 

5,077

 

474,619

Effect of hedge accounting

 

-

 

-

 

-

 

(69,484)

 

-

 

-

 

-

 

-

 

-

 

-

 

(69,484)

Hedging

 

(28,044)

 

-

 

(3,903)

 

152,927

 

-

 

-

 

-

 

-

 

-

 

-

 

120,980

Effects from changes in foreign exchange rate

 

-

 

-

 

2,316

 

-

 

-

 

-

 

-

 

-

 

2,862

 

-

 

5,178

Remeasurements of the net defined benefit plans

 

-

 

-

 

-

 

-

 

-

 

-

 

(272,792)

 

-

 

-

 

-

 

(272,792)

Deferred income taxes

 

(1,137,032)

 

(2,582)

 

(4,658)

 

(22,163)

 

788,561

 

7,511

 

71,935

 

-

 

(3,402)

 

(465)

 

(302,295)

Transfer to other account

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

3,055

 

(7,352)

 

(4,297)

Non-controlling interests

 

(4,328)

 

-

 

11

 

-

 

-

 

-

 

522

 

-

 

-

 

-

 

(3,795)

Ending balance

W

(3,628,434)

 

(979)

 

(118,517)

 

(35,108)

 

2,866,623

 

13,273

 

(292,328)

 

9

 

124,892

 

(3,884)

 

(1,074,453)

 

120

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

20. Equity (continued)

 

(e) Regulatory reserve for loan losses

In accordance with Regulations for the Supervision of Financial Institutions, the Group reserves the difference between allowance for credit losses by K-IFRS and that as required by the Regulations at the account of regulatory reserve for loan losses in retained earnings .

 

i) Changes in regulatory reserve for loan losses including non-controlling interests as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Beginning balance

W

3,456,487

 

3,609,851

Planned provision (reversal) for regulatory reserve for loan losses

 

518,694

 

(153,364)

Ending balance

W

3,975,181

 

3,456,487

 

ii) Profit attributable to equity holders of Shinhan Financial Group and earnings per share after factoring in regulatory reserve for loan losses for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-

month

 

Six-

month

 

Three-month

 

Six-

month

Profit attributable to equity holders of Shinhan Financial Group

W

1,425,479

 

2,747,011

 

1,238,265

 

2,626,223

Provision for regulatory reserve for loan losses

 

(220,983)

 

(517,107)

 

3,176

 

175,059

Profit attributable to equity holders of Shinhan Financial Group adjusted for regulatory reserve

W

1,204,496

 

2,229,904

 

1,241,441

 

2,801,282

Basic and diluted earnings per share adjusted for regulatory reserve in Korean won(*)

W

2,270

 

4,205

 

2,302

 

5,181

(*) Dividends for hybrid bonds are deducted.

 

 

121

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

20. Equity (continued)

 

(f) Dividends

 

i) Quarterly dividends paid by the controlling company for the six-month period ended June 30, 2024 are as follows:

 

 

 

 

Record date

 

Total dividends

Common stock (W 540 per share)

 

March 31, 2024

W

275,069

 

 

ii) By resolutions of the 23nd general meeting of stockholders, the annual dividends declared to be paid by the controlling company to the shareholders of the Company in respect of the year ended December 31, 2023 are as follows:

 

 

 

Total dividends

Common stock (W525 per share)

W

268,697

 

 

122

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

21. Operating income

 

Operating income for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-

month

 

Six-

month

 

Three-

month

 

Six-

month

Operating income:

 

 

 

 

 

 

 

 

Interest income

W

7,244,965

 

14,435,457

 

6,814,724

 

13,307,663

Fees and commission income

 

1,121,853

 

2,186,078

 

1,045,050

 

1,995,691

Insurance income

 

778,581

 

1,543,924

 

727,261

 

1,412,926

Reinsurance income

 

8,148

 

22,959

 

10,194

 

23,256

Insurance finance income

 

4,933

 

16,750

 

13,247

 

26,518

Dividend income

 

74,465

 

153,554

 

60,729

 

129,201

Gain on financial instruments at fair value through profit or loss

 

1,118,250

 

2,553,942

 

809,031

 

2,330,867

Income from derivatives held for trading

 

4,931,421

 

11,516,265

 

3,122,350

 

9,634,034

Gain on financial instruments designated at fair value through profit or loss

 

(11,553)

 

115,509

 

60,065

 

132,649

Gain on foreign currency transaction

 

2,236,417

 

4,576,806

 

748,210

 

2,896,088

Gain on disposal of financial securities at fair value through other comprehensive income

 

38,040

 

72,618

 

15,668

 

39,915

Gain on disposal of securities at amortized cost

 

-

 

-

 

-

 

358

Reversal of allowance for credit loss

 

7,130

 

11,420

 

9,270

 

11,596

Gain on hedging instruments

 

138,337

 

406,765

 

(15,878)

 

262,457

Other operating income

 

280,926

 

482,079

 

163,673

 

362,280

 

 

17,971,913

 

38,094,126

 

13,583,594

 

32,565,499

 

123

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

22. Net interest income

 

Net interest income for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-

month

 

Six-

month

 

Three-

month

 

Six-

month

Interest income:

 

 

 

 

 

 

 

 

Cash and due from banks at amortized cost

W

203,349

 

382,095

 

142,482

 

281,986

Deposit at FVTPL

 

-

 

-

 

-

 

349

Securities at FVTPL

 

401,152

 

812,658

 

337,482

 

640,518

Securities at FVOCI

 

682,802

 

1,342,785

 

557,418

 

1,078,897

Securities at amortized cost

 

280,802

 

551,746

 

261,953

 

495,082

Loans at amortized cost

 

5,563,199

 

11,105,504

 

5,380,362

 

10,551,801

Loans at FVTPL

 

24,303

 

47,497

 

45,248

 

66,647

Insurance finance interest income

 

51,139

 

113,370

 

53,733

 

123,012

Others

 

38,219

 

79,802

 

36,046

 

69,371

 

 

7,244,965

 

14,435,457

 

6,814,724

 

13,307,663

Interest expense:

 

 

 

 

 

 

 

 

Deposits

 

2,530,706

 

5,009,564

 

2,386,639

 

4,673,337

Interests on financial liabilities measured at FVTPL

 

3,293

 

6,590

 

2,412

 

3,186

Borrowings

 

477,793

 

984,200

 

454,700

 

924,826

Debt securities issued

 

836,065

 

1,637,936

 

653,294

 

1,272,326

Insurance finance interest expenses

 

475,498

 

958,618

 

504,381

 

981,090

Others

 

99,767

 

200,836

 

119,115

 

184,873

 

 

4,423,122

 

8,797,744

 

4,120,541

 

8,039,638

 

 

 

 

 

 

 

 

 

Net interest income

W

2,821,843

 

5,637,713

 

2,694,183

 

5,268,025

 

 

124

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

23. Net fees and commission income

 

Net fees and commission income for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-month

 

Six-

month

 

Three-month

 

Six-

month

Fees and commission income:

 

 

 

 

 

 

 

 

Credit placement fees

W

18,784

 

40,431

 

23,404

 

40,205

Commission received as electronic charge receipt

 

36,991

 

74,153

 

37,363

 

73,218

Brokerage fees

 

103,462

 

212,693

 

103,215

 

192,980

Commission received as agency

 

38,950

 

78,833

 

31,476

 

64,395

Investment banking fees

 

51,996

 

92,995

 

43,914

 

77,875

Commission received in foreign exchange activities

 

89,373

 

173,840

 

74,445

 

142,063

Trust management fees

 

61,436

 

126,338

 

77,789

 

151,844

Credit card fees

 

364,976

 

685,568

 

329,843

 

623,797

Operating lease fees

 

159,924

 

325,312

 

145,807

 

290,726

Others

 

195,961

 

375,915

 

177,794

 

338,588

 

1,121,853

 

2,186,078

 

1,045,050

 

1,995,691

Fees and commission expense:

 

 

 

 

 

 

 

 

Credit-related fee

 

12,442

 

24,670

 

11,743

 

22,128

Credit card fees

 

240,798

 

467,114

 

236,610

 

457,114

Others

 

152,705

 

274,985

 

147,394

 

263,721

 

 

405,945

 

766,769

 

395,747

 

742,963

 

 

 

 

 

 

 

 

 

Net fees and commission income

W

715,908

 

1,419,309

 

649,303

 

1,252,728

 

 

 

125

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

24. Reversal of (provision for) credit loss allowance

 

Reversal of (provision for) credit loss allowance on financial assets for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-month

Six-

month

 

Three-month

Six-

month

Allowance provided:

 

 

 

 

 

 

Loans at amortized cost

W

(490,550)

(844,457)

 

(497,182)

(938,684)

Other financial assets at amortized cost

 

(23,456)

(35,712)

 

(34,083)

(47,447)

Unused credit line and financial guarantee

 

(98,625)

(108,731)

 

1,473

(6,981)

Securities at amortized cost

 

-

-

 

(1,757)

(1,967)

 

 

(612,631)

(988,900)

 

(531,549)

(995,079)

Allowance reversed:

 

 

 

 

 

 

Securities at fair value through other comprehensive income

 

6,442

9,973

 

9,270

11,596

Securities at amortized cost

 

688

1,447

 

-

-

 

 

7,130

11,420

 

9,270

11,596

 

W

(605,501)

(977,480)

 

(522,279)

(983,483)

 

 

25. General and administrative expenses

 

General and administrative expenses for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-month

 

Six-month

 

Three-month

 

Six-month

Employee benefits:

 

 

 

 

 

 

 

 

Salaries

W

814,108

 

1,615,626

 

823,247

 

1,628,771

Severance benefits:

 

38,954

 

85,265

 

38,691

 

73,829

Defined contribution

 

8,475

 

19,044

 

8,289

 

18,366

Defined benefit

 

30,479

 

66,221

 

30,402

 

55,463

Termination benefits

 

878

 

6,024

 

2,365

 

36,617

 

 

853,940

 

1,706,915

 

864,303

 

1,739,217

 

 

 

 

 

 

 

 

 

Entertainment

 

10,787

 

20,343

 

9,406

 

19,164

Depreciation

 

130,452

 

260,071

 

125,291

 

248,954

Amortization

 

63,391

 

123,995

 

58,591

 

109,075

Taxes and utility bills

 

91,347

 

150,726

 

76,040

 

128,819

Advertising

 

71,664

 

115,835

 

72,091

 

114,469

Research

 

5,837

 

11,564

 

6,030

 

11,430

Others

 

244,196

 

454,402

 

231,170

 

427,720

 

W

1,471,614

 

2,843,851

 

1,442,922

 

2,798,848

 

 

126

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

26. Share-based payments

 

(a) Performance shares granted as of June 30, 2024 are as follows:

 

 

 

Expired

 

Not expired

 

 

 

Type

 

Cash-settled share-based payment

 

 

 

Performance conditions

 

Relative stock price linked (20.0%), management index (80.0%)

 

 

 

Exercising period

 

4 years from the commencement date of the year to which the grant date belongs

 

 

 

 

 

Estimated number of shares vested at June 30, 2024

 

170,874

 

2,653,191

 

 

 

 

 

Fair value per share in Korean won

 

W 44,222, W 33,122,
W 37,387, W 37,081 and W 38,156 for the expiration of exercising period from 2019 to 2023

 

W 48,150

(*) Based on performance-based stock compensation, the reference stock price (the arithmetic average of the weighted average share price of transaction volume for the past two month, the past one month, and the past one week) of four years after the commencement of the grant year is paid in cash, and the fair value of the reference stock to be paid in the future is assessed as the closing price of the settlement.

 

 

127

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

26. Share-based payments (continued)

 

(b) Share-based compensation costs for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

 

Employees of

 

 

 

 

The controlling company

 

The subsidiaries

 

Total

 

 

 

 

 

 

 

Performance share

W

3,229

 

25,753

 

28,982

 

 

 

June 30, 2023

 

 

Employees of

 

 

 

 

The controlling company

 

The subsidiaries

 

Total

 

 

 

 

 

 

 

Performance share

W

1,465

 

8,068

 

9,533

 

 

(c) Accrued expenses recognized related to share-based payment transactions as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

Accrued expenses

 

 

The controlling company

 

The subsidiaries

 

Total

 

 

 

 

 

 

 

Performance share

W

14,675

 

119,423

 

134,098

 

 

 

December 31, 2023

 

 

Accrued expenses

 

 

The controlling company

 

The subsidiaries

 

Total

 

 

 

 

 

 

 

Performance share

W

  16,079

 

  111,056

 

  127,135

 

 

128

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

27. Income tax expense

 

(a) Income tax expense for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-month

 

Six-

month

 

Three-month

 

Six-

month

Current income tax expense

W

367,716

 

568,449

 

434,781

 

573,207

Temporary differences(*)

 

(54,380)

 

(55,266)

 

10,738

 

539,362

Income tax recognized in other comprehensive income(*)

 

107,117

 

349,946

 

14,117

 

(210,513)

Income tax expenses

W

420,453

 

863,129

 

459,636

 

902,056

 

 

 

 

 

 

 

 

 

Effective tax rate

%

22.47

 

23.57

 

26.59

 

25.16

(*) The Group does not recognize deferred tax assets and liabilities related to global minimum tax laws by applying the temporary exception provision for deferred tax in K-IFRS No. 1012.

 

(b) The Group is reviewing the impact on the consolidated financial statements following the implementation of the Global Minimum Tax Act. Due to the complexity of the application of the global minimum tax law, it is difficult to reasonably estimate the impact on the consolidated financial statements, and the Group is estimating the impact on the consolidated financial statement with a tax expert.

 

129

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

28. Earnings per share

 

Basic and diluted earnings per share for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-

month

 

Six-

month

 

Three-month

 

Six-

month

Profit attributable to equity holders of Shinhan Financial Group

W

1,425,479

 

2,747,011

 

1,238,265

 

2,626,223

Less:

 

 

 

 

 

 

 

 

Dividends to hybrid bonds

 

(50,070)

 

(85,806)

 

(44,030)

 

(91,954)

Profit available for common stock

W

1,375,409

 

2,661,205

 

1,194,235

 

2,534,269

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding(*)

 

508,306,029

 

509,942,342

 

520,676,621

 

522,896,062

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share in Korean won

W

2,706

 

5,219

 

2,295

 

4,847

(*) As of June 30, 2024, the number of common shares issued by the Group is 509,393,214 shares, and the weighted average number of outstanding shares reflects changes such as the acquisition and retirement of treasury stock for the six-month periods ended June 30, 2024 and 2023.

 

130

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

29. Commitments and contingencies

 

(a) Guarantees, acceptances and credit commitments as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Guarantees and purchase agreements:

 

 

 

 

Outstanding guarantees

W

15,151,745

 

12,503,445

Contingent guarantees

 

5,185,717

 

4,337,751

ABS and ABCP purchase agreements

 

1,726,769

 

1,533,047

 

 

22,064,231

 

18,374,243

Commitments to extend credit:

 

 

 

 

Loan commitments in Korean won

 

92,600,647

 

88,913,555

Loan commitments in foreign currency

 

28,454,293

 

26,970,371

Other agreements (*)

 

97,680,876

 

96,194,944

 

 

218,735,816

 

212,078,870

Endorsed bills:

 

 

 

 

Secured endorsed bills

 

1,311

 

44

Unsecured endorsed bills

 

12,284,830

 

10,519,665

 

 

12,286,141

 

10,519,709

 

W

253,086,188

 

240,972,822

(*) Unused credit commitments provided to the card customers are included, the amounts are W 91,717,958 million for the six-month period ended June 30, 2024 and W90,832,893 million for the year ended December 31, 2023.

 

 

(b) Legal contingencies

As of June 30, 2024, the Group is involved with 975 pending lawsuits as a defendant with total litigation fee of W 1,046,471 million.

 

As of the June 30, 2024, the Group has recorded W 27,106 million and W3,720 million, respectively, as other provisions and insurance contract liabilities for litigations, etc., which have been decided to lose at the first trial. The outcome of the remaining litigations other than those accounted for provisions, etc. are not expected to have a material impact on the consolidated financial statements, but additional losses may result from future litigation.

 

(c) As a Prime Brokerage Service operator, the Group entered into a total return swap agreement (“TRS”, derivatives that exchange profits and losses from underlying assets such as stocks, bonds and funds) with a fund operated by Lime Asset Management ("Lime Fund"). Through TRS with the Group, the Lime Fund invested approximately $200 million in IIG Global Trade Finance Fund, IIG Trade Finance Fund, and IIG Trade Finance Fund-FX Hedge ("IIG Fund") from May 2017 to September 2017. The Group invested the IIG Fund in LAM Enhanced Finance III L.P ("LAM III Fund") in kind and acquired the LAM III Fund's beneficiary certificates in accordance with the management instructions of Lime Asset Management in 2019. The recoverable value of the LAM III Fund beneficiary certificates is affected by the recoverable value of the IIG Fund invested in kind.

Meanwhile, IIG Fund received cancellation of registration and asset freeze from the US Securities and Exchange Commission in November 2019. The Financial Supervisory Service (FSS) announced in its interim inspection of Lime Fund in February 2020 that the Group is charged of being involved in poor concealment and fraud of Lime Fund while operating TRSs with Lime Fund, and a related prosecution investigation has been under way since then.

Institutional sanctions (banned from the sale of new private equity funds and etc. for six months) against the Group was finalized by the Financial Services Commission on November 12, 2021.

In addition, the prosecution arrested and indicted the former director of Prime Brokerage Services for fraud charges and violation of the Capital Market and Financial Investment Services Act. Finally, the former director of Prime Brokerage Services was found guilty.

 

131

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

29. Commitments and contingencies (continued)

 

The prosecution indicted the Group and the former director of Prime Brokerage Services on January 22, 2021 for violating ‘Financial Investment Services and Capital Markets Act’. The Group was fined W 50 million on March 15, 2023, for relaxing its supervision obligation. However, the Group believes that additional legal liability that arise in the future in relation to the above incident is not high.

Considering the board resolutions and the results of the Financial Supervisory Service's dispute settlement committee, the Group has been completed or will be carried out the compensation and liquidity supply for some of the Lime Fund sales in the future.

(d) The Group has sold Gen2 related trust instruments from May 2014 to November 2019. As of June 30, 2024, approximately W420 billion, the entire outstanding balance, is suspended from redemption and delayed in repayment. In accordance with a resolution of the Board of Directors on September 28, 2021, the Group has decided to pay 40% of the investment principal to the customers who have agreed to the suspension of redemption and settle the amount upon investment recovery. On August 29, 2023, the Board of Directors decided to proceed with privatization using the post-settlement method. In addition, on December 8, 2023, the Board of Directors decided to privatize NH-UK Peterborough Power Plant Trust and others through a post-settlement method.

(e) The Group is responsible for the completion of construction when the contractor fails to fulfill its responsibilities. In case the Group fails to fulfill its responsibility, it is in the process of a responsible-for-completion land trust project (108 cases other than the new residential and commercial apartment project in Mugeo-dong Nam-gu, Ulsan (excluding completed workplaces)) to compensate for damages incurred to the financial institutions, and for the period ended June 30, 2024, the total PF commitment amount of PF loan financial institutions is W 2,595.4 billion on a temporary basis, W 3,472.8 billion on a limit basis, and the total PF loans amounted to W 4,734.9 billion.

 

Meanwhile, the construction company’s responsibility for completion of a total of 53 land trust projects, including the new construction project of the Logistics Center in Juchon-ri, Iljuk-myeon, Anseong-si, Gyeonggi-do, which the consolidated entity is in progress as of the end of the current period, has not been fulfilled. The total PF commitment amount of PF loan financial institutions invested in the relevant business site at the end of the current period is W 787.1 billion on a temporary basis and W 1,136.2 billion on a limit basis, and the PF loan amount is W 1,670.7 billion.

 

In addition, the completion deadline for a total of 11 land trust projects, including the Sanho-dong multiplex in Masan Happo-gu, Changwon-si, Gyeongsangnam-do, which the consolidated entity is in progress as of the end of the current period, has passed. The total PF commitment amount of PF loan financial institutions invested in the relevant business site at the end of the current period is W 171.2 billion on a temporary basis and W 233.7 billion on a limit basis, and the PF loan amount is W 390.0 billion.

 

The amount of claim for damages of the Group is determined after identifying whether it is a damage caused by the Group’s failure to fulfill its responsibilities, and the scope of damages to be compensated by the Group may change depending on the results of lawsuits that are in progress as of June 30, 2024 or that will proceed after the end of the current period. Since the loss amount cannot be reliably measured, the consolidated financial statements as of June 30, 2024, do not reflect these impacts. The Group will continue to monitor the progress of each business site in the future.

 

(f) As of June 30, 2024, the Group may lease some part of the total project cost for 37 borrowing-type land trust contracts, including the Janghyeon District office complex in Siheung, Gyeonggi-do. The additional maximum lending amount (unused limit) is W 367,747 million. The decision on whether to lease from the trust account for the project is not an unconditional obligation for the Group. It will be determined based on various factors, including own accounts and the fund management plan of each trust business.

 

(g) An investigation by the Fair Trade Commission regarding unfair collaborative practices by four commercial banks are in progress, and the results cannot be predicted at this moment.

 

 

132

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

30. Statement of cash flows

 

Cash and cash equivalents in the consolidated statements of cash flows as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Cash and due from banks at amortized cost

W

35,035,167

 

34,650,390

Adjustments:

 

 

 

 

Due from financial institutions with a maturity over

  three months from date of acquisition

 

(1,378,914)

 

(1,322,274)

Restricted due from banks

 

(3,061,298)

 

(2,911,232)

 

 

(4,440,212)

 

(4,233,506)

 

W

30,594,955

 

30,416,884

 

133

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

31. Related parties

 

Intra-group balances, and income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. In accordance with K-IFRS1024, the Group defines the retirement benefit plans of the associates, key management and their families, the consolidation Group and related parties as the scope of related parties. The amount of profit and loss, receivable balance and payable balance between the Group and the related parties are disclosed. For details of the associates and joint ventures, refer to ‘Note 12’

(a)
Balances with the related parties as of June 30, 2024 and December 31, 2023 are as follows:

 

Related party

 

Account

 

June 30,

2024

 

December 31, 2023

Investments in associates:

 

 

 

 

 

 

BNP Paribas Cardif Life Insurance

 

Credit card loans

W

118

 

105

 

ACL

 

(1)

 

(1)

 

Accrued income

W

28

 

32

 

Deposits

 

7,150

 

2,984

 

Allowance for Undrawn Commitment

 

2

 

2

Incorporated association Finance Saving Information Center

 

Credit card loans

 

1

 

-

      〃

 

Deposits

 

13

 

7

Nomura-Rifa Private Real Estate Investment Trust No.19

 

Loans

 

11,700

 

12,000

      〃

 

ACL

 

(276)

 

(471)

 

Accrued income

 

48

 

51

SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3

 

Accrued income

 

259

 

310

KOREA FINANCE SECURITY CO., LTD.

 

Deposits

 

100

 

132

 

Credit card loans

 

1

 

-

Korea Credit Bureau

 

Deposits

 

53

 

640

 

Credit card loans

 

226

 

-

Goduck Gangil1 PFV Co., Ltd.

 

Deposits

 

4

 

11

SBC PFV Co., Ltd.

 

Loans

 

1,020,000

 

-

 

ACL

 

(1,658)

 

-

 

Accrued income

 

80

 

-

 

Deposits

 

2,228

 

13,113

Goduck Gangil10 PFV Co., Ltd.

 

Loans

 

-

 

1,100

       〃

 

ACL

 

-

 

(5)

       〃

 

Deposits

 

7,777

 

7,568

Shinhan Global Healthcare Investment Fund 2

 

Deposits

 

1

 

1

Future-Creation Neoplux Venture Capital Fund

 

Account receivables

 

3,600

 

3,600

Neoplux Market-Frontier Secondary Fund

 

Account receivables

 

-

 

592

Gyeonggi-Neoplux Superman Fund

 

Account receivables

 

1,308

 

1,174

Shinhan-Neoplux Energy Newbiz Fund

 

Account receivables

 

188

 

1,883

 

134

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

31. Related parties(continued)

 

(a) Balances with the related parties as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

Related party

 

Account

 

June 30,

2024

 

December 31, 2023

Investments in associates (continued):

 

 

 

 

 

 

SHINHAN-NEO Core Industrial Technology Fund

 

Account receivables

W

115

 

123

Neoplux No.3 Private Equity Fund

 

Account receivables

 

6,517

 

5,866

Korea Digital Asset Custody

 

Deposits

 

77

 

34

 

Credit card loans

 

5

 

-

Shinhan Smilegate Global PEF I

 

Unearned revenue

 

-

 

7

WaveTechnology co.Ltd.

 

Deposits

 

254

 

17

SHINHAN-NEO Market-Frontier 2nd Fund

 

Account receivables

 

356

 

1,596

iPIXEL Co.,Ltd.

 

Credit card loans

 

14

 

-

 

ACL

 

(1)

 

-

 

Deposits

 

988

 

11

 

Allowance for Undrawn Commitment

 

1

 

-

CJL No.1 Private Equity Fund

 

Deposits

 

98

 

265

NewWave 6th Fund

 

Account receivables

 

235

 

984

DDI LVC Master Real Estate Investment Trust Co., Ltd.

 

Deposits

 

884

 

923

Logisvalley Shinhan REIT Co.,Ltd.

 

Loans

 

33,000

 

33,000

 

ACL

 

(36)

 

(36)

 

Accrued income

 

75

 

81

 

Deposits

 

2,290

 

1,134

Shinhan-Albatross tech investment Fund

 

Deposits

 

2,579

 

2,229

Shinhan Global Active REIT Co.Ltd. (*2)

 

Loans

 

40,200

 

-

 

ACL

 

(252)

 

-

 

Derivative assets

 

8,939

 

-

 

Accrued income

 

618

 

-

 

Deposits

 

10,487

 

206

Shinhan VC tomorrow venture fund 1

 

Account receivables

 

549

 

730

Global Net Zero Solution Security Investment Trust(*1)

 

Accrued income

 

-

 

2

SEOKWANG T&I

 

Deposits

 

-

 

1

Shinhan Time 1st Investment fund

 

Deposits

 

64

 

151

Shinhan-Cognitive Start-up Fund L.P.

 

Unearned revenue

 

-

 

52

NH-J&-IBKC Label Technology Fund

 

Deposits

 

205

 

301

Shinhan-JW Mezzanin New Technology Fund 1st(*1)

 

Unearned revenue

 

-

 

7

Shinhan M&A-ESG Investment fund

 

Account receivables

 

285

 

285

K-REITs Infrastructure Real Estate Fund

 

Accrued income

 

5

 

-

MAN Grobal Strategy Fund(H)

 

Accrued income

 

1

 

-

Shinhan General Private Real Estate Investment Trust No.3

 

Accrued income

 

29

 

13

Capstone REITs No.26

 

Loans

 

20,000

 

-

 

ACL

 

(22)

 

-

 

Accrued income

 

85

 

-

 

Deposits

 

-

 

1

Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd.

 

Accrued income

 

41

 

21

 

 

135

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

31. Related parties(continued)

 

(a) Balances with the related parties as of June 30, 2024 and December 31, 2023 are as follows (continued):

 

Related party

 

Account

 

June 30,

2024

 

December 31, 2023

Investments in associates (continued):

 

 

 

 

 

 

Shinhan-GB FutureFlow Fund L.P.

 

Unearned revenue

W

121

 

-

LB Scotland Amazon Fulfillment Center Fund 29

 

Derivative assets

 

196

 

-

Shinhan AIM FoF Fund 1-A

 

Derivative assets

 

1,972

 

-

Pinestreet Grobal Fund 13-2

 

Derivative assets

 

28

 

-

Cascade Tech Co.,Ltd.

 

Deposits

 

22

 

-

STIC ALT Global II Private Equity Fund

 

Deposits

 

2,463

 

-

Douzone Techfin Co.,Ltd.

 

Credit card loans

 

17

 

-

 

Deposits

 

23,858

 

-

 

Allowance for Undrawn Commitment

 

1

 

-

Rifa Private Real Estate Investment Trust 31

 

Loans

 

14,000

 

-

 

ACL

 

(47)

 

-

Pacific Private Placement Real Estate Fund No.40

 

Loans

 

14,000

 

-

 

ACL

 

(37)

 

-

 

Accrued income

 

122

 

-

Shinhan-DS Mezzanine New Technology Investment Association No. 1

 

Unearned revenue

 

226

 

-

Shinhan-C Square Mezzanine New Technology Investment Association No. 1

 

Unearned revenue

 

39

 

-

KR Seocho Co., Ltd.

 

Loans

 

11,871

 

-

 

ACL

 

(110)

 

-

 

Accrued income

 

9

 

-

KB Distribution Private Real Estate 3-1

 

Loans

 

2,000

 

-

 

ACL

 

(5)

 

-

 

Accrued income

 

17

 

-

Key management personnel

and their immediate relatives:

 

Loans

 

3,318

 

5,003

 

 

Assets

 

1,193,731

 

68,038

 

 

Liabilities

W

61,985

 

29,797

(*1) Excluded from the associates due to disposal and liquidation for the six-month period ended June 30, 2024.

(*2) Included accounts receivable and payable with the subsidiary of the related parties.

 

136

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

31. Related parties (continued)

 

(b) Transactions with the related parties for the six-month periods ended June 30, 2024 and 2023 are as follows:

Related party

 

Account

 

June 30, 2024

 

June 30, 2023

 

 

 

 

Three- month

 

Six-

month

 

Three- month

 

Six-

month

Investments in associates:

 

 

 

 

 

 

 

 

 

 

BNP Paribas Cardif Life Insurance

 

Fees and commission income

W

259

 

531

 

848

 

1,216

 

Provision for credit loss

 

-

 

-

 

(2)

 

(2)

 

Interest expense

 

(1)

 

(6)

 

(4)

 

(49)

Partners 4th Growth Investment Fund (*1)

 

Interest expense

 

-

 

-

 

(2)

 

(2)

Shinhan-Albatross Technology Investment Fund

 

Fees and commission income

 

153

 

247

 

-

 

115

 

Interest expense

 

(3)

 

(5)

 

-

 

(2)

Shinhan-Nvestor Liquidity Solution Fund

 

Fees and commission income

 

192

 

192

 

173

 

173

Shinhan-PS Investment Fund No.1

 

Fees and commission income

 

5

 

5

 

5

 

15

Nomura-Rifa Private Real Estate Investment Trust No.19

 

Interest income

 

148

 

297

 

136

 

265

 

Reversal of credit loss

 

195

 

195

 

-

 

-

SH MAIN Professional Investment Type Private Mixed Asset Investment Trust No.3

 

Fees and commission income

 

259

 

555

 

306

 

642

KOREA FINANCE SECURITY CO., LTD.

 

Fees and commission income

 

1

 

2

 

1

 

2

ShinHan – Soo Young Entrepreneur Investment Fund No.1

 

Fees and commission income

 

-

 

122

 

-

 

139

Kiwoom-Shinhan Innovation Fund I

 

Fees and commission income

 

-

 

148

 

-

 

140

FuturePlay-Shinhan TechInnovation Fund 1

 

Fees and commission income

 

-

 

-

 

-

 

56

Korea Credit Bureau

 

Fees and commission income

 

9

 

19

 

5

 

8

Goduck Gangil1 PFV Co., Ltd.

 

Interest income

 

-

 

-

 

43

 

108

 

Reversal of credit loss

 

-

 

-

 

3

 

11

SBC PFV Co., Ltd.

 

Fees and commission income

 

6,600

 

7,590

 

-

 

-

 

Interest income

 

4,064

 

6,027

 

-

 

-

 

Interest expense

 

(7)

 

(12)

 

(4)

 

(8)

 

Provision for credit loss

 

(1,371)

 

(1,419)

 

-

 

-

Goduck Gangil10 PFV Co., Ltd.

 

Interest income

 

-

 

30

 

20

 

43

 

Interest expense

 

(68)

 

(176)

 

(175)

 

(349)

 

Reversal of credit loss

 

-

 

5

 

1

 

1

Korea Omega Project Fund I

 

Fees and commission income

 

37

 

75

 

39

 

83

Sparklabs-Shinhan Opportunity Fund 1

 

Fees and commission income

 

4

 

12

 

4

 

34

Kakao-Shinhan 1st TNYT Fund

 

Fees and commission income

 

97

 

193

 

97

 

193

Future-Creation Neoplux Venture Capital Fund

 

Interest income

 

-

 

19

 

19

 

47

Neoplux Market-Frontier Secondary Fund

 

Fees and commission income

 

-

 

-

 

187

 

381

Gyeonggi-Neoplux Superman Fund

 

Fees and commission income

 

134

 

268

 

148

 

297

Shinhan-Neoplux Energy Newbiz Fund

 

Fees and commission income

 

183

 

355

 

239

 

477

NewWave 6th Fund

 

Fees and commission income

 

236

 

471

 

245

 

489

 

137

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

31. Related parties (continued)

 

(b) Transactions with the related parties for the six-month periods ended June 30, 2024 and 2023 are as follows (continued):

 

Related party

 

Account

 

June 30, 2024

 

June 30, 2023

 

 

 

 

Three- month

 

Six-

month

 

Three- month

 

Six-

month

Investments in associates (continued):

 

 

 

 

 

 

 

 

 

 

SHINHAN-NEO Core Industrial Technology Fund

 

Fees and commission income

W

115

 

232

 

125

 

249

KTC-NP Growth Champ 2011-2 Private Equity Fund (*1)

 

Interest income

 

-

 

-

 

13

 

36

Neoplux No.3 Private Equity Fund

 

Fees and commission income

 

645

 

1,296

 

667

 

1,327

SHINHAN-NEO Market-Frontier 2nd Fund

 

Fees and commission income

 

398

 

754

 

401

 

793

SWK-Shinhan New Technology Investment Fund 1st

 

Fees and commission income

 

15

 

30

 

15

 

30

Ulmus SHC innovation investment fund

 

Fees and commission income

 

16

 

35

 

23

 

46

CJL No.1 Private Equity Fund

 

Interest expense

 

-

 

(2)

 

(3)

 

(5)

Leverent-Shinhan Vista New Technology Investment Fund

 

Fees and commission income

 

-

 

40

 

40

 

40

Kiwoom-Shinhan Innovation Fund 2

 

Fees and commission income

 

59

 

120

 

68

 

136

ETRI Holdings-Shinhan 1st Unicorn Fund

 

Fees and commission income

 

25

 

50

 

25

 

50

Shinhan-Time mezzanine blind Fund

 

Fees and commission income

 

74

 

149

 

75

 

75

Shinhan VC tomorrow venture fund 1

 

Fees and commission income

 

598

 

1,147

 

850

 

1,700

JS Shinhan Private Equity Fund

 

Fees and commission income

 

149

 

298

 

150

 

298

Stonebridge-Shinhan Unicorn Secondary Fund

 

Fees and commission income

 

148

 

296

 

148

 

296

Shinhan-Kunicorn first Fund

 

Fees and commission income

 

-

 

261

 

-

 

232

Shinhan-Quantum Startup Fund

 

Fees and commission income

 

38

 

76

 

38

 

76

Shinhan Simone Fund

 

Fees and commission income

 

-

 

78

 

-

 

78

Shinhan Whitrin New Tech Fund

 

Fees and commission income

 

20

 

41

 

22

 

43

Logisvalley Shinhan REIT Co.,Ltd.

 

Interest income

 

424

 

847

 

493

 

983

 

Fees and commission income

 

38

 

56

 

40

 

81

 

Interest expense

 

(1)

 

(1)

 

(1)

 

(1)

 

Reversal of (provision for) credit loss

 

-

 

-

 

24

 

(4)

Shinhan Dev Healthcare Investment Fund

 

Fees and commission income

 

95

 

177

 

19

 

39

Shinhan-Cognitive Start-up Fund L.P.

 

Fees and commission income

 

(29)

 

193

 

59

 

67

Global Commerce New Technology Investment Fund

 

Fees and commission income

 

8

 

15

 

7

 

22

Shinhan-HGI Entities with social responsibility Investment Fund

 

Fees and commission income

 

15

 

31

 

15

 

31

Shinhan WWG Energy Fund New Technology Investment Fund

 

Fees and commission income

 

12

 

23

 

12

 

23

Shinhan-Ji and Tec Smart Innovation Fund

 

Fees and commission income

 

-

 

65

 

65

 

130

Global Net Zero Solution Security Investment Trust (*2)

 

Fees and commission income

 

-

 

17

 

20

 

39

SH 1.5years Maturity Investment Type Security Investment Trust No.2 (*2)

 

Fees and commission income

 

-

 

4

 

4

 

8

 

138

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

31. Related parties (continued)

 

(b) Transactions with the related parties for the six-month periods ended June 30, 2024 and 2023 are as follows (continued):

 

Related party

 

Account

 

June 30, 2024

 

June 30, 2023

 

 

 

 

Three- month

 

Six-

month

 

Three- month

 

Six-

month

Investments in associates (continued):

 

 

 

 

 

 

 

 

 

 

Shinhan Global Active REIT Co. Ltd.(*3)

 

Interest income

W

2,198

 

3,344

 

-

 

-

 

Fees and commission income

 

840

 

1,657

 

-

 

-

 

Derivative-related income

 

3,547

 

8,016

 

-

 

-

 

Interest expense

 

(2)

 

(2)

 

-

 

(1)

 

Provision for credit loss

 

(219)

 

(219)

 

-

 

-

DeepBlue No.1 Private Equity Fund (*1)

 

Interest expense

 

-

 

-

 

(3)

 

(8)

Shinhan Time 1st Investment fund

 

Fees and commission income

 

-

 

26

 

-

 

26

Shinhan SGC ESG Investment Fund 1st

 

Fees and commission income

 

28

 

57

 

29

 

57

Shinhan-iSquare Venture PEF 1st

 

Fees and commission income

 

25

 

50

 

25

 

50

Shinhan-Gene and New Normal First Mover Venture Investment Equity Fund 1st

 

Fees and commission income

 

-

 

207

 

-

 

42

DS-Shinhan-JBWoori New Media New Tehcnology Investment Fund No.1

 

Fees and commission income

 

-

 

216

 

-

 

216

NH-J&-IBKC Label Technology Fund

 

Interest expense

 

(2)

 

(4)

 

(7)

 

(7)

Bonanza-Shinhan GIB Innovative Semiconductor Investment Fund

 

Fees and commission income

 

55

 

55

 

55

 

55

2023 Shinhan-JB Woori-Daeshin Listed Companies New Technology Fund

 

Fees and commission income

 

53

 

106

 

5

 

5

Shinhan M&A-ESG Investment Fund

 

Fees and commission income

 

285

 

570

 

156

 

156

Shinhan-JW Mezzanin New Technology Fund 1st (*2)

 

Fees and commission income

 

-

 

7

 

-

 

-

MAN Grobal Strategy Fund(H)

 

Fees and commission income

 

2

 

4

 

-

 

-

Shinhan Time Secondary Blind New Technology Investment Association

 

Fees and commission income

 

49

 

99

 

-

 

-

Shinhan-OpenWater Pre-IPO Fund-1

 

Fees and commission income

 

-

 

100

 

-

 

-

Shinhan-CJ Technology Innovation Fund No. 1

 

Fees and commission income

 

49

 

99

 

-

 

-

Shinhan-Eco Venture Fund 2nd

 

Fees and commission income

 

25

 

50

 

-

 

-

Heungkuk-Shinhan The First Visionary Fund No.1

 

Fees and commission income

 

-

 

200

 

-

 

-

Koreainvestment-Shinhan-LEP K beauty

 

Fees and commission income

 

-

 

94

 

-

 

-

Shinhan HB Wellness 1st Fund

 

Fees and commission income

 

20

 

39

 

-

 

-

Shinhan J&Wave New Technology Business Investment Association

 

Fees and commission income

 

4

 

11

 

-

 

-

Shinhan General Private Real Estate Investment Trust No.3

 

Fees and commission income

 

30

 

44

 

-

 

-

 

 

 

 

139

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

31. Related parties (continued)

 

(b) Transactions with the related parties for the six-month periods ended June 30, 2024 and 2023 are as follows (continued):

 

Related party

 

Account

 

June 30, 2024

 

June 30, 2023

 

 

 

 

Three- month

 

Six-

month

 

Three- month

 

Six-

month

Investments in associates (continued):

 

 

 

 

 

 

 

 

 

 

Shinhan DS Secondary Investment Fund

 

Fees and commission income

W

151

 

151

 

-

 

-

Fortress-Shinhan Air Cargo No. 1 New Technology Investment Association

 

Fees and commission income

 

25

 

50

 

-

 

-

Shinhan Ulmus Small Manager Innovative Enterprise Investment Association No. 7

 

Fees and commission income

 

24

 

47

 

-

 

-

Shinhan SM Office Value Add – Outsource Management Real Estate Investment Co., Ltd.

 

Fees and commission income

 

20

 

41

 

-

 

-

Shinhan-GB FutureFlow Fund L.P.

 

Fees and commission income

 

61

 

116

 

-

 

-

LB Scotland Amazon Fulfillment Center Fund 29

 

Derivative-related income

 

157

 

196

 

-

 

-

 

Other expense

 

-

 

(2)

 

-

 

-

Shinhan AIM FoF Fund 1-A

 

Derivative-related income

 

705

 

1,792

 

-

 

-

 

Derivative-related expense

 

-

 

(232)

 

-

 

-

 

Other income

 

-

 

22

 

-

 

-

Pinestreet Grobal Fund 13-2

 

Derivative-related income

 

19

 

20

 

-

 

-

 

Derivative-related expense

 

5

 

-

 

-

 

-

Shinhan Regent New Technology Business Investment Association No. 1

 

Fees and commission income

 

-

 

23

 

-

 

-

Shinhan-soo secondary Fund

 

Fees and commission income

 

112

 

134

 

-

 

-

E&Shinhan New Growth-Up Fund

 

Fees and commission income

 

37

 

96

 

-

 

-

Cascade Tech Co., Ltd.

 

Reversal of credit loss

 

12

 

6

 

-

 

-

TheZone Techfin Co., Ltd.

 

Fees and commission income

 

1

 

1

 

-

 

-

 

Interest expense

 

(226)

 

(310)

 

-

 

-

Songpa Biz Cluster PFV Co., Ltd.

 

Interest expense

 

-

 

(1)

 

-

 

-

STIC ALT Global II Private Equity Fund

 

Interest expense

 

-

 

(1)

 

-

 

-

Rifa Private Real Estate Investment Trust 31

 

Interest income

 

213

 

425

 

-

 

-

 

Provision for credit loss

 

-

 

(47)

 

-

 

-

Pacific Private Placement Real Estate Fund No.40

 

Interest income

 

174

 

473

 

-

 

-

Shinhan-DS Mezzanine New Technology Investment Association No. 1

 

Fees and commission income

 

39

 

39

 

-

 

-

Shinhan Time BM Sub-Director New Technology Association

 

Fees and commission income

 

110

 

110

 

-

 

-

 

 

 

140

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

31. Related parties (continued)

 

(b) Transactions with the related parties for the six-month periods ended June 30, 2024 and 2023 are as follows (continued):

 

Related party

 

Account

 

June 30, 2024

 

June 30, 2023

 

 

 

 

Three- month

 

Six-

month

 

Three- month

 

Six-

month

Investments in associates (continued):

 

 

 

 

 

 

 

 

 

 

KR Seocho Co., Ltd.

 

Interest income

W

723

 

723

 

-

 

-

Shinhan Market-Frontier Investment Association No. 3

 

Fees and commission income

 

251

 

251

 

-

 

-

K-REITs Infrastructure Real Estate Fund

 

Fees and commission income

 

17

 

17

 

-

 

-

KB Distribution Private Real Estate 3-1

 

Interest income

 

51

 

51

 

-

 

-

 

Provision for credit loss

 

(5)

 

(5)

 

-

 

-

Capstone REITs No.26

 

Interest income

 

85

 

85

 

-

 

-

 

Provision for credit loss

 

(22)

 

(22)

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

Key management personnel and their close family members

 

Interest income

 

32

 

67

 

61

 

134

 

 

 

W

23,746

 

41,210

 

6,067

 

12,166

(*1) Excluded from the associates due to disposal and liquidation for the year ended December 31, 2023.

(*2) Excluded from the associates due to disposal and liquidation for the year ended June 30, 2024.

(*3) Included transaction details with the subsidiary of the related parties.

 

141

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

31. Related parties (continued)

 

(c) Key management personnel compensation

 

Key management personnel compensation for the six-month periods ended June 30, 2024 and 2023 are as follows:

 

 

 

June 30, 2024

 

June 30, 2023

 

 

Three-

month

 

Six-

month

 

Three-month

 

Six-

month

Short-term employee benefits

W

5,251

 

11,527

 

7,111

 

12,991

Severance benefits

 

189

 

426

 

177

 

395

Share-based payment transactions(*)

 

3,606

 

7,492

 

1,649

 

3,689

 

W

9,046

 

19,445

 

8,937

 

17,075

(*) Share-based payments refer to the remuneration expenses during the vesting period.

 

 

(d) The guarantees and purchase agreement provided between the related parties as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

 

 

Amount of guarantees

 

 

Guarantor

 

Guaranteed Parties

 

June 30,

2024

 

December 31,

2023

 

Account

Shinhan Bank

 

BNP Paribas Cardif Life Insurance

W

-

 

10,000

 

Unused loan limit

 

SBC PFV Co., Ltd.

 

100,000

 

-

 

Unused loan limit

 

Rifa Private Real Estate Investment Trust 31

 

44,649

 

-

 

Unused loan limit

 

Key Management Personnel

 

2,752

 

3,241

 

Unused loan limit

Shinhan Card

 

BNP Paribas Cardif Life Insurance

 

882

 

895

 

Unused credit line

The Group

 

Structured entities

 

258,736

 

326,830

 

Purchase agreement

 

 

127,500

 

-

 

Derivative agreement

 

 

 

W

534,519

 

340,966

 

 

 

(e) Details of collaterals provided by the related parties as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

 

 

 

 

Amount of assets pledged

Provided to

 

Provided by

 

Pledged assets

 

June 30, 2024

 

December 31, 2023

Shinhan Bank

 

BNP Paribas Cardif Life

 Insurance

 

Government

bonds

W

-

 

2,400

 

Logisvalley Shinhan REIT Co.,Ltd.

 

Collateral trust

 

39,600

 

39,600

 

Rifa Private Real Estate Investment Trust 31

 

Collateral trust

 

16,800

 

-

 

SBC PFV Co., Ltd.

 

Collateral trust

 

1,320,000

 

-

 

Key Management Personnel

 

Properties

 

6,876

 

4,417

 

 

Deposits and etc.

 

1,366

 

1,127

 

 

Guarantee

 

2,135

 

1,308

 

 

 

 

10,377

 

6,852

 

 

 

 

 

W

1,386,777

 

48,852

 

142

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

31. Related parties (continued)

 

(f) Details of significant loan transactions with related parties for the six-month period ended June 30, 2024 and for the year ended December 31, 2023 are as follows:

 

 

 

 

 

June 30, 2024

Classification

 

Company

 

Beginning

 

Loan

 

Recover

 

Others(*)

 

Ending

Investments in associates

 

Nomura-Rifa Private Real Estate Investment Trust No.19

W

11,529

 

-

 

(300)

 

471

 

11,700

Shinhan Global Active REIT Co.Ltd.

 

-

 

165,400

 

(125,200)

 

-

 

40,200

SBC PFV Co., Ltd.

 

-

 

1,144,000

 

(124,000)

 

-

 

1,020,000

Goduck Gangil10 PFV Co., Ltd.

 

1,100

 

-

 

(1,100)

 

-

 

-

Logisvalley Shinhan REIT Co.,Ltd.

 

33,000

 

34,175

 

(34,175)

 

-

 

33,000

 

Cascade Tech Co.,Ltd.

 

-

 

66

 

(66)

 

-

 

-

 

Rifa Private Real Estate Investment Trust 31

 

-

 

14,000

 

-

 

-

 

14,000

 

Pacific Private Placement Real Estate Fund No.40

 

-

 

14,000

 

-

 

-

 

14,000

 

KR Seocho Co., Ltd.

 

-

 

11,871

 

(7,000)

 

7,000

 

11,871

 

KB Distribution Private Real Estate 3-1

 

-

 

2,000

 

-

 

-

 

2,000

 

Capstone REITs No.26

 

-

 

20,000

 

-

 

-

 

20,000

Key Management Personnel

 

 

5,005

 

993

 

(2,679)

 

-

 

3,319

Total

W

50,634

 

1,406,505

 

(294,520)

 

7,471

 

1,170,090

 

 

 

 

 

December 31, 2023

Classification

 

Company

 

Beginning

 

Loan

 

Recover

 

Others(*)

 

Ending

Investments in associates

 

Nomura-Rifa Private Real Estate Investment Trust No.19

W

11,880

 

-

 

-

 

(351)

 

11,529

Goduck Gangil1 PFV Co., Ltd.

 

6,825

 

-

 

(6,825)

 

-

 

-

Goduck Gangil10 PFV Co., Ltd.

 

3,100

 

-

 

(2,000)

 

-

 

1,100

Logisvalley Shinhan REIT Co.,Ltd.

 

43,000

 

33,000

 

(43,000)

 

 -

 

33,000

Kay Management Personnel

 

 

 

6,563

 

3,154

 

(4,712)

 

 -

 

5,005

Total

W

71,368

 

36,154

 

(56,537)

 

(351)

 

50,634

(*) The effect on changes in allowance for credit loss is included.

 

143

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

32. Interests in unconsolidated structured entities

 

(a)
The nature and extent of interests in unconsolidated structured entities

 

The Group involved in assets-backed securitization, structured financing, beneficiary certificates (primarily investment funds) and other structured entities and characteristics of these structured entities are as follows:

 

 

 

Description

 

 

 

Assets-backed securitization

 

Securitization vehicles are established to buy assets from originators and issue asset-backed securities in order to facilitate the originators’ funding activities and enhance their financial soundness. The Group is involved in the securitization vehicles by purchasing (or committing to purchase) the asset-backed securities issued and/or providing other forms of credit enhancement.

 

The Group does not consolidate a securitization vehicle if (i) the Group is unable to make or approve decisions as to the modification of the terms and conditions of the securities issued by such vehicle or disposal of such vehicles’ assets, (ii) (even if the Group is so able) if the Group does not have the exclusive or primary power to do so, or (iii) if the Group does not have exposure, or right, to a significant amount of variable returns from such entity due to the purchase (or commitment to purchase) of asset-backed securities so issued or subordinated obligations or by providing other forms of credit support.

 

 

 

Structured financing

 

Structured entities for project financing are established to raise funds and invest in a specific project such as M&A (mergers and acquisitions), BTL (build-transfer-lease), shipping finance, etc. The Group is involved in the structured entities by originating loans, investing in equity, or providing credit enhancement.

 

 

 

Investment fund

 

Investment fund means an investment trust, a PEF (private equity fund) or a partnership which invests in a group of assets such as stocks or bonds by issuing a type of beneficiary certificates to raise funds from the general public and distributes its income and capital gains to their investors. The Group manages assets by investing in shares of investment fund or playing a role of an operator or a GP (general partner) of investment fund, on behalf of other investors.

 

The size of unconsolidated structured entities as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

December 31, 2023

Total assets:

 

 

 

 

Asset-backed securitization

W

237,677,774

 

214,750,119

Structured financing

 

568,647,808

 

427,272,034

Investment fund

 

449,921,651

 

364,272,967

 

W

1,256,247,233

 

1,006,295,120

 

144

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

32. Interests in unconsolidated structured entities (continued)

 

(b) Nature of risks

 

i) The carrying amounts of the assets and liabilities relating to its interests in unconsolidated structured entities as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

Assets-backed

securitization

 

Structured

financing

 

Investment

fund

 

Total

Assets under consolidated financial statements:

 

 

 

 

 

 

 

 

Loans at fair value through profit or loss

W

39,902

 

299,981

 

28,105

 

367,988

Loan at amortized cost

 

1,589,453

 

18,044,197

 

370,637

 

20,004,287

Securities at fair value through profit or loss

 

3,900,677

 

205,880

 

14,294,928

 

18,401,485

Derivative assets

 

11,093

 

-

 

-

 

11,093

Securities at fair value through other comprehensive income

 

4,141,446

 

186,446

 

35,115

 

4,363,007

Securities at amortized cost

 

4,975,266

 

-

 

65

 

4,975,331

Other assets

 

7,269

 

93,994

 

8,462

 

109,725

 

W

14,665,106

 

18,830,498

 

14,737,312

 

48,232,916

Liabilities under consolidated financial statements:

 

 

 

 

 

 

 

 

Derivate liabilities

W

6,786

 

405

 

-

 

7,191

Other liabilities

 

450

 

6,118

 

10

 

6,578

 

W

7,236

 

6,523

 

10

 

13,769

 

 

 

 

December 31, 2023

 

 

Assets-backed

securitization

 

Structured

financing

 

Investment

fund

 

Total

Assets under consolidated financial statements:

 

 

 

 

 

 

 

 

Loans at fair value through profit or loss

W

9,598

 

309,635

 

123,282

 

442,515

Loan at amortized cost

 

1,061,060

 

16,604,162

 

227,185

 

17,892,407

Securities at fair value through profit or loss

 

4,366,192

 

129,795

 

13,304,176

 

17,800,163

Derivative assets

 

674

 

-

 

-

 

674

Securities at fair value through other comprehensive income

 

4,041,459

 

183,517

 

3,315

 

4,228,291

Securities at amortized cost

 

4,806,904

 

-

 

65

 

4,806,969

Other assets

 

4,636

 

79,822

 

11,935

 

96,393

 

W

14,290,523

 

17,306,931

 

13,669,958

 

45,267,412

Liabilities under consolidated financial statements:

 

 

 

 

 

 

 

 

Derivate liabilities

W

9,939

 

315

 

-

 

10,254

Other liabilities

 

301

 

1,628

 

-

 

1,929

 

W

10,240

 

1,943

 

-

 

12,183

 

145

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

32. Interests in unconsolidated structured entities (continued)

 

(b) Nature of risks (continued)

 

ii) The maximum risk exposure of the Group relating to its interests in unconsolidated structured entities as of June 30, 2024 and December 31, 2023 are as follows:

 

 

 

June 30, 2024

 

 

Assets-backed

securitization

 

Structured

financing

 

Investment

fund

 

Total

Assets held

W

14,665,106

 

18,830,498

 

14,737,312

 

48,232,916

Purchase agreements

 

999,553

 

56,980

 

2,138,718

 

3,195,251

Loan commitments

 

396,805

 

716,643

 

12,381

 

1,125,829

Guarantees

 

-

 

160,000

 

-

 

160,000

Others

 

-

 

367,747

 

-

 

367,747

 

W

16,061,464

 

20,131,868

 

16,888,411

 

53,081,743

 

 

 

 

December 31, 2023

 

 

Assets-backed

securitization

 

Structured

financing

 

Investment

fund

 

Total

Assets held

W

14,290,523

 

17,306,931

 

13,669,958

 

45,267,412

Purchase agreements

 

1,029,819

 

10,462

 

2,134,239

 

3,174,520

Loan commitments

 

353,790

 

913,252

 

-

 

1,267,042

Others

 

-

 

429,549

 

-

 

429,549

 

W

15,674,132

 

18,660,194

 

15,804,197

 

50,138,523

 

 

146

 


 

SHINHAN FINANCIAL GROUP CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 2024 and 2023(Unaudited), and December 31, 2023

(In millions of won)

 

33. Events after the reporting period

 

(a) Quarterly dividend resolution

 

The Company decided to pay a quarterly dividend of W 540 per share for common stock and convertible preferred stock by a resolution of the board of directors on July 26, 2024. The total amount of dividends is W 273,358 million, and the dividend base date is June 30, 2024.

 

(b) Liquidation of Subsidiary Company

 

Shinhan AI Co., Ltd, a subsidiary of the Group, completed the liquidation process in July 2024. As a result, the Company terminated the pledge for Shinhan Bank's time deposit of W 31,000 million held by Shinhan AI during the current half of the year and received W 32,679 million of the remaining assets.

147