Company: SHG
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0001193125-25-089950
Chunk: 262

Company: SHINHAN FINANCIAL GROUP CO LTD
Filing Date: 2025-04-23
Form: 20-F
Chunk 262
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 addition, interest income increased by 5.0% from W2,841 billion in 2023 to W2,984 billion in 2024, primarily as a result of an increase in interest income on loans at amortized cost, including credit card loans and installment finance loans, driven by higher interest rates applied to installment credit sales compared to 2023, as well as efforts to expand the credit card business of Shinhan Card, which resulted in an increase in the average balance of loans at amortized cost and related interest income.

The following provides a discussion of the major trends surrounding the general economy and the financial services sector in Korea in 2024 and our current outlook for 2025 as they relate to our core businesses. The following discussion represents the subjective view of our management and may significantly differ from the actual results for 2025.

Trends in the Korean Economy

In 2024, the global economy experienced moderate growth as the downturn in the manufacturing sector somewhat eased, while the service sector continued its solid performance. Additionally, a disinflationary trend persisted across major economies, and the rate-cutting stance of global central banks became increasingly pronounced. In the U.S., the economy demonstrated robust growth driven by consumer spending, significantly outpacing other regions, which contributed to a strong dollar and rising U.S. stock markets. However, as the year progressed, uncertainties regarding policies following the U.S. presidential election increased, leading to heightened volatility in financial markets. In 2025, the global economy may face downward pressure due to deteriorating global trade conditions amidst the reciprocal tariffs policy of the Trump administration, including tariffs and resulting trade conflicts, along with increased uncertainty in global financial markets.

Korea’s GDP increased by 2.0% in 2024, an increase from 1.4% in 2023, driven by a significant rise in exports, despite sluggish private consumption and construction investment. Exports, especially in IT-related sectors such as semiconductors and ships, reached record highs, demonstrating substantial growth. The Bank of Korea has lowered its GDP growth forecast for 2025 to 1.5%, and the Korean economy is expected to experience sluggishness in both exports and domestic demand, primarily due to deteriorating trade conditions stemming from the reciprocal tariffs policy of the Trump administration, including tariffs and resulting trade conflicts and ongoing political uncertainties, both domestically and internationally.

Korea’s consumer prices have shown some signs of stability in 2024, and the Bank of Korea has lowered interest rates two times in